8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 31, 2006

Reynolds American Inc.

(Exact name of registrant as specified in its charter)

North Carolina	1-32258	20-0546644
(State or other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification No.)

401 North Main Street,
Winston-Salem, NC 27101

(Address of Principal Executive Offices) (Zip Code)

(336) 741-2000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, If Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

Purchase Agreement Amendment

     On May 31, 2006, Reynolds American Inc. (“RAI”) entered into an amendment (the “Amendment”) to the Purchase Agreement (the “Purchase Agreement”), dated as of April 24, 2006, by and among (1) Karl J. Breyer, Marshall E. Eisenberg and Thomas J. Pritzker, not individually, but solely as co-trustees of those certain separate and distinct trusts listed on Schedule 1 thereto, (2) GP Investor, L.L.C., a Delaware limited liability company, (3) RAI, and (4) Conwood Holdings, Inc. (f/k/a Pinch Acquisition Corporation), a Delaware corporation and wholly owned subsidiary of RAI (“Conwood Holdings”).

     The Amendment amends the Purchase Agreement to provide, among other things, the opportunity for, and procedures by which, mediation of any disputes arising from tax issues may be resolved, and clarifies certain indemnification obligations in connection with the payment of taxes.

     The Amendment is filed as Exhibit 2.1 to this Current Report and is incorporated herein by reference. This summary of the provisions of the Amendment is qualified in its entirety by reference to the Amendment.

2006 Indenture

     On May 31, 2006, RAI completed the offering (the “Offering”) of $1.65 billion in aggregate principal amount of its senior secured notes, consisting of $625 million aggregate principal amount of 7.250% Senior Secured Notes due 2013 (the “2013 Notes”), $775 million aggregate principal amount of 7.625% Senior Secured Notes due 2016 (the “2016 Notes”) and $250 million aggregate principal amount of 7.750% Senior Secured Notes due 2018 (the “2018 Notes,” and together with the 2013 Notes and 2016 Notes, the “Notes”), in reliance on Rule 144A under the Securities Act of 1933 (the “Securities Act”) and, outside the United States, in reliance on Regulation S under the Securities Act. The net proceeds of the Offering were used to help finance, in part, the acquisition by Conwood Holdings of the second largest manufacturer of smokeless tobacco products in the United States (the “Conwood Acquisition”), described in Item 2.01 below. The Notes are guaranteed by certain subsidiaries of RAI (after giving effect to the Conwood Acquisition) (the “Guarantors”) and secured by certain assets of RAI and the Guarantors. The Notes were sold to Lehman Brothers Inc., J.P. Morgan Securities Inc., Citigroup Global Markets Inc., Mizuho International plc, Scotia Capital (USA) Inc., Wachovia Capital Markets, LLC and BNY Capital Markets, Inc. (collectively, the “Initial Purchasers”).

     The Notes were issued pursuant to an indenture (the “2006 Indenture”) entered into on May 31, 2006, by and among RAI, the Guarantors, and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”). Pursuant to the 2006 Indenture, RAI may issue an unlimited amount of its debt securities in one or more series from time to time. Debt securities issued under the 2006 Indenture will rank equally with each other and will be treated as a single class for certain purposes under the 2006 Indenture, including with respect to any amendments of the 2006 Indenture and any defaults affecting all series of debt securities issued under the 2006 Indenture.

     The 2013 Notes will mature on June 1, 2013. The 2016 Notes will mature on June 1, 2016. The 2018 Notes will mature on June 1, 2018. Interest on the Notes will accrue from May 31, 2006 and will be payable semiannually, in arrears, on June 1 and December 1, beginning December 1,

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2006, to the persons in whose names the Notes are registered at the close of business on the May 15 and November 15 preceding the respective interest payment dates, except that interest payable at maturity of the Notes shall be paid to the same persons to whom principal of the Notes is payable. Interest will be computed on the Notes on the basis of a 360-day year of twelve 30-day months.

     The Notes are redeemable, in whole at any time or in part from time to time, at the option of RAI, at a redemption price equal to the greater of (1) 100% of the principal amount of the Notes, and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate (as defined in the 2006 Indenture), plus 50 basis points, plus accrued and unpaid interest on the principal amount being redeemed to the redemption date.

     The Guarantors will fully and unconditionally guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest on debt securities issued under the 2006 Indenture. The Guarantors consist of RAI’s material domestic subsidiaries (after giving effect to the Conwood Acquisition), other than RAI’s direct, wholly owned subsidiary, R.J. Reynolds Tobacco Holdings, Inc. (“RJR”). Under the terms of the 2006 Indenture, if, in the future, any other direct or indirect subsidiary of RAI guarantees the obligations of RAI under its new credit facilities (described below), such guarantor will also be required to guarantee the debt securities issued under the 2006 Indenture. Under the terms of the 2006 Indenture, if any Guarantor ceases to be a guarantor under RAI’s new credit facilities, that Guarantor will, generally, be automatically released from all of its obligations under the 2006 Indenture, and its guarantee of debt securities issued under the 2006 Indenture will terminate.

     Upon issuance, the Notes and the related guarantees will be secured by certain assets of RAI and the Guarantors as and to the extent described in the 2006 Indenture. These assets also constitute a portion of the security for the obligations of RAI and the Guarantors under RAI’s new credit facilities (which are secured by substantially all the assets of these entities). If these assets are no longer pledged as security for the obligations of RAI and the Guarantors under RAI’s new credit facilities (or any other indebtedness) for any reason, generally, they will automatically be released as security for the Notes and the related guarantees. Under the terms of RAI’s new credit facilities, generally, the security therefor will be automatically released at such time, if any, as the six-year $1.55 billion senior secured term loan described below is paid in full and RAI obtains investment grade corporate ratings (with not worse than stable outlooks) from each of Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s, a division of the McGraw Hill Companies, Inc. (“S&P”).

     The 2006 Indenture contains covenants that (1) restrict the ability of RAI and certain of its subsidiaries to (a) mortgage or pledge certain of their assets to secure indebtedness without pledging the same assets as security for their obligations under debt securities issued under the 2006 Indenture, (b) engage in sale/leaseback transactions, or (c) consolidate, merge or transfer all or substantially all of their property and assets and (2) prohibit RJR from incurring certain indebtedness at any time it does not guarantee the obligations of RAI under debt securities issued under the 2006 Indenture.

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     The 2006 Indenture does not contain any cross-default or cross-acceleration provisions, and does not limit the ability of RAI or any of its subsidiaries (other than RJR, as described above) to incur additional indebtedness.

     The Trustee also serves as trustee under RJR’s indentures dated July 25, 1995, May 15, 1999, and May 20, 2002, is serving as exchange agent in the private exchange offer RAI is currently conducting for certain outstanding RJR notes (the “RAI Exchange Offer”), and is the transfer agent for the common stock of RAI. An affiliate of the Trustee is an Initial Purchaser of the Notes, and another affiliate participates in RAI’s new credit facilities described below.

     The 2006 Indenture is filed as Exhibit 4.1 to this Current Report and is incorporated herein by reference. The forms of 2013 Notes, 2016 Notes and 2018 Notes are filed as Exhibits 4.2, 4.3 and 4.4 to this Current Report, respectively, and are incorporated herein by reference. This summary of the provisions of the 2006 Indenture and the Notes is qualified in its entirety by reference to the 2006 Indenture and the forms of Notes.

New RAI Credit Facilities

     On May 31, 2006, RAI entered into new $2.1 billion senior secured credit facilities, consisting of a six-year $1.55 billion senior secured term loan (the “Term Loan”) and a five-year, $550 million senior secured revolving credit facility (which may be increased to $750 million at the discretion of the lenders upon the request of RAI) (the “RAI Revolving Credit Facility,” and together with the Term Loan, the “RAI Credit Facilities”) with Lehman Brothers Inc., J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and General Electric Capital Corporation, as joint lead arrangers, Lehman Brothers Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as joint bookrunners, JPMorgan Chase Bank, N.A., as administrative agent, Lehman Commercial Paper Inc. and Citicorp USA, Inc., as syndication agents, and General Electric Capital Corporation and Mizuho Corporate Bank, Ltd., as documentation agents. The credit agreement related to the RAI Credit Facilities is an amendment and restatement of the agreement related to RJR’s prior revolving credit facility, which the RAI Revolving Credit Facility is replacing.

     The Term Loan was used, together with the net proceeds of the Offering and available cash, to finance the Conwood Acquisition. The Term Loan is repayable in nominal annual payments until maturity. Amounts repaid on the Term Loan may not be reborrowed.

     RAI is able to use the RAI Revolving Credit Facility for borrowings and issuances of letters of credit, at its option. Issuances of letters of credit reduce availability under the RAI Revolving Credit Facility. There currently are no borrowings under the RAI Revolving Credit Facility other than the issuance of approximately $25 million of letters of credit.

     Under the terms of the RAI Credit Facilities, RAI is not required to maintain compensating balances; however, RAI is required to pay a commitment fee of 1.0% per annum on the unused portion of the RAI Revolving Credit Facility.

     Borrowings under the RAI Credit Facilities bear interest, at the option of RAI, at a rate equal to an applicable margin plus:

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• the reference rate, which is the higher of (1) the federal funds effective rate from time to time plus 0.5% and (2) the prime rate; or

• the eurodollar rate, which is the rate at which eurodollar deposits for one, two, three or six months are offered in the interbank eurodollar market.

     The applicable margin for the RAI Credit Facilities is, initially, .875% with respect to reference rate loans and 1.875% with respect to eurodollar loans. These rates are subject to adjustment based upon RAI’s consolidated leverage ratio and the ratings of the debt under the RAI Credit Facilities. Overdue principal and, to the extent permitted by law, overdue interest, outstanding under the RAI Credit Facilities bear interest at a rate equal to the rate then in effect with respect to such borrowings, plus 2.0% per annum.

     The RAI Credit Facilities have restrictive covenants that limit RAI’s and its subsidiaries’ ability to pay dividends and repurchase stock, make investments, prepay certain indebtedness, incur indebtedness, engage in transactions with affiliates, create liens, acquire, sell or dispose of specific assets and engage in specified mergers or consolidations.

     RAI’s material domestic subsidiaries (including RJR and after giving effect to the Conwood Acquisition) guarantee RAI’s obligations under the RAI Credit Facilities. RAI has pledged substantially all of its assets, including the stock of its direct subsidiaries, to secure such obligations. These guarantors have also pledged substantially all of their assets to secure these obligations (including the stock, indebtedness and other obligations held by or owing to such guarantor of a subsidiary, other than for RJR and its direct and indirect subsidiary guarantors, which pledge is limited to the stock of RJR’s direct, wholly owned subsidiary, R. J. Reynolds Tobacco Company ,securing certain intercompany indebtedness owing by RJR to RAI, which RAI has assigned as collateral for the new credit facilities); however, RAI’s direct, wholly owned subsidiaries, Lane Limited and Santa Fe Natural Tobacco Company, Inc., pledged substantially all of their personal property, but not any real property.

     Under the terms of the RAI Credit Facilities, at such time, if any, as RAI has repaid the Term Loan in full and has obtained a corporate rating of investment grade (with not worse than stable outlooks) from each of Moody’s and S&P, the security for the RAI Credit Facilities will, generally, automatically be released and the obligations thereunder will become unsecured.

     Pursuant to documents relating to the RAI Credit Facilities, in the event of RAI’s exposure under any hedging arrangement with a lender under the RAI Credit Facilities (or any affiliate of such lender), RAI’s obligations with respect to such hedging arrangement will be guaranteed by the same entities and secured by the same assets as under the RAI Credit Facilities.

     Lehman Brothers Inc. served as financial advisor to RAI in connection with the Conwood Acquisition and is serving as dealer manager in connection with the RAI Exchange Offer. Lehman Brothers Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. were also Initial Purchasers in the Offering. Affiliates of these entities are lenders under the RAI Credit Facilities. The various agents under the RAI Credit Facilities, or their affiliates, are also lenders. In addition, affiliates of Mizuho Corporate Bank, Ltd., The Bank of Nova Scotia, Wachovia Bank, National Association and The Bank of New York, all of whom are participants under the RAI Credit

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Facilities, were Initial Purchasers of the Notes. The Trustee is affiliated with The Bank of New York.

     The credit agreement, pledge agreement, security agreement and subsidiary guaranty related to the RAI Credit Facilities are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report and are incorporated herein by reference. Attached hereto as Exhibits 10.5, 10.6 and 10.7, respectively are the form of deed of trust for North Carolina, the mortgage for South Carolina and the deed to secure debt for Georgia, which are instruments filed in such states to perfect the security interest of the lenders under the RAI Credit Facilities and the holders of the Notes and existing notes issued by RJR in the real estate-related collateral pledged by RAI and the guarantors under the RAI Credit Facilities, the 2006 Indenture and the RJR indentures dated May 15, 1999, and May 20, 2002. This summary of the provisions of these exhibits is qualified in its entirety by reference to such exhibits.

Supplemental Indentures to RJR Indentures

     The disclosure set forth under Item 3.03 below is hereby incorporated by reference herein in response to this Item 1.01.

Registration Rights Agreement

     In connection with the completion of the Offering, RAI and the Guarantors entered into a Registration Rights Agreement dated as of May 31, 2006 (the “Registration Rights Agreement”), with the Initial Purchasers. Under the terms of the Registration Rights Agreement, RAI and the Guarantors agreed to use their reasonable best efforts to file with the Securities and Exchange Commission and cause to become effective a registration statement relating to an offer (the “Exchange Offer”) to (1) exchange the Notes for registered notes (the “Exchange Notes”) having substantially the same terms as the Notes, and (2) exchange the guarantees related to the Notes for registered guarantees relating to the Exchange Notes having substantially the same terms as the original guarantees. RAI and the Guarantors have agreed to use their reasonable best efforts to cause the Exchange Offer to be completed within 210 days after the issuance of the Notes. If the Exchange Offer is not so completed, the annual interest rate on the Notes will increase by 0.5% until this requirement is met. In addition, in certain circumstances, RAI and the Guarantors have agreed to file a shelf registration statement that would allow certain holders to offer some or all of the Notes and related guarantees to the public. If this shelf registration statement is not effective in certain circumstances, the annual interest rate on the Notes will increase by 0.5% until the shelf registration statement is effective. Under the Registration Rights Agreement, RAI and the Guarantors have agreed to indemnify the Initial Purchasers and the holders of the Notes against certain liabilities in connection with the Exchange Offer or registration statement, as the case may be, or contribute to payments that the Initial Purchasers may be required to make in respect of those liabilities.

     The Registration Rights Agreement is filed as Exhibit 10.8 to this Current Report and is incorporated herein by reference. This summary of the provisions of the Registration Rights Agreement is qualified in its entirety by reference to the Registration Rights Agreement.

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     As described above under the headings “2006 Indenture” and “New RAI Credit Facilities,” the Initial Purchasers and/or their affiliates have other business relationships with RAI and its subsidiaries.

Item 2.01. Completion of Acquisition or Disposition of Assets

     On May 31, 2006, Reynolds American issued a press release announcing, among other things, the completion of the Conwood Acquisition. RAI funded the $3.5 billion acquisition purchase price with the net proceeds of the Offering and borrowings under the Term Loan, both described above in Item 1.01 of this Current Report, as well as with available cash. A copy of this press release is attached as Exhibit 99.1 and is incorporated herein by reference.

     As described in Item 1.01 of this Current Report, the Initial Purchasers of the Notes, and the lenders and other parties to the RAI Credit Facilities, and/or their respective affiliates, have other business relationships with RAI and its subsidiaries.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off Balance-Sheet Arrangement of a Registrant.

     The disclosure set forth in Item 1.01 above under the heading “New RAI Credit Facilities” and “2006 Indenture” is hereby incorporated by reference in response to this Item 2.03.

Item 3.03. Material Modification to Rights of Security Holders.

     On May 31, 2006, RJR, RAI and certain subsidiaries of RJR, as guarantors, and the Trustee entered into (1) a Fifth Supplemental Indenture to RJR’s indenture dated May 15, 1999 (“RJR 1999 Indenture”), and (2) a Third Supplemental Indenture to RJR’s indenture dated May 20, 2002 (“RJR 2002 Indenture,” and together with the RJR 1999 Indenture, the “RJR Indentures”). The supplemental indentures clarify that the RAI Revolving Credit Facility described in Item 1.01 above is a replacement of RJR’s credit facility within the meaning of the RJR Indentures, and ensure that RAI will remain a guarantor of the debt securities issued under the RJR Indentures following the replacement of RJR’s credit facility with the RAI Revolving Credit Facility.

     The following series of RJR notes are issued under the RJR 2002 Indenture:

• $300 million aggregate principal amount of RJR’s 6.500% Notes due 2007;

• $300 million aggregate principal amount of RJR’s 6.500% Secured Notes due 2010;

• $450 million aggregate principal amount of RJR’s 7.250% Notes due 2012; and

• $200 million aggregate principal amount of RJR’s 7.300% Secured Notes due 2015.

     In addition, $200 million in aggregate principal amount of RJR’s 7.875% Notes due 2009 are issued under the RJR 1999 Indenture.

     The Fifth Supplemental Indenture and Third Supplemental Indenture are filed as Exhibits 4.5 and 4.6, respectively, to this Current Report and are incorporated herein by reference. This

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summary of the provisions of these supplemental indentures is qualified in its entirety by reference to the supplemental indentures.

Item 9.01. Financial Statements and Exhibits

(a) Financial Statements of Businesses Acquired.

     (1) The financial statements required to be provided pursuant to Rule 3-05(b) of Regulation S-X will be filed as an amendment to this Current Report on Form 8-K not later than 71 days after the deadline for filing this report.

     (2) The signed accountant’s report required to be provided pursuant to Rule 2-02 of Regulation S-X will be filed as an amendment to this Current Report on Form 8-K not later than 71 days after the deadline for filing this report.

(b) Pro Forma Financial Information.

     The pro forma financial information required to be filed pursuant to Article 11 of Regulation S-X will be filed as an amendment to this Current Report on Form 8-K not later than 71 days after the deadline for filing this report.

(d) Exhibits.

Exhibit No.	Description
2.1	Amendment No. 1, dated as of May 31, 2006, to the Purchase Agreement, dated as of April 24, 2006, by and among Karl J. Breyer, Marshall E. Eisenberg and Thomas J. Pritzker, as trustees, GP Investor, L.L.C., Reynolds American Inc. and Conwood Holdings, Inc. (f/k/a Pinch Acquisition Corporation).
4.1	Indenture dated May 31, 2006, among Reynolds American Inc. and certain of its subsidiaries as guarantors and The Bank of New York Trust Company, N.A. as trustee.
4.2	Form of Reynolds American Inc. 7.250% Senior Secured Note due 2013.
4.3	Form of Reynolds American Inc. 7.625% Senior Secured Note due 2016.
4.4	Form of Reynolds American Inc. 7.750% Senior Secured Note due 2018.
4.5	Fifth Supplemental Indenture dated May 31, 2006, to Indenture dated May 15, 1999, among R.J. Reynolds Tobacco Holdings, Inc., Reynolds American Inc. and certain subsidiaries of R.J. Reynolds Tobacco Holdings, Inc. as guarantors and the Bank of New York Trust Company, N.A. as trustee.
4.6	Third Supplemental Indenture dated May 31, 2006, to Indenture dated May 20, 2002, among R.J. Reynolds Tobacco Holdings, Inc., Reynolds American Inc. and certain

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Exhibit No.	Description
	subsidiaries of R.J. Reynolds Tobacco Holdings, Inc. as guarantors and the Bank of New York Trust Company, N.A. as trustee.
10.1	Fourth Amended and Restated Credit Agreement, dated as of May 31, 2006, among Reynolds American Inc., the agents and other parties named therein, and the lending institutions listed from time to time on Annex I thereto.
10.2	Second Amended and Restated Pledge Agreement, dated as of May 31, 2006, among Reynolds American Inc., certain of its subsidiaries as pledgors and JPMorgan Chase Bank, N.A. as collateral agent.
10.3	Second Amended and Restated Security Agreement, dated as of May 31, 2006, among Reynolds American Inc., certain of its subsidiaries as assignors and JPMorgan Chase Bank, N.A. as collateral agent.
10.4	Fifth Amended and Restated Subsidiary Guaranty, dated as of May 31, 2006, among certain of the subsidiaries of Reynolds American Inc. as guarantors and JPMorgan Chase Bank, N.A. as administrative agent.
10.5	Form of First Amended and Restated Deed of Trust, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing (North Carolina) made as of May 31, 2006, by R. J. Reynolds Tobacco Company, as the Trustor, to The Fidelity Company, as Trustee.
10.6	Form of First Amended and Restated Deed to Secure Debt, Security Agreement, Assignment of Leases, Rents and Profits (Bibb County, Georgia) made as of May 31, 2006, by R. J. Reynolds Tobacco Company, as the Grantor, to JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent for the Secured Creditors, as the Grantee.
10.7	Form of First Amended and Restated Mortgage, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing (Cherokee County, South Carolina) made as of May 31, 2006, by R. J. Reynolds Tobacco Company, as the Mortgagor, to JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent for the Secured Creditors, as the Mortgagee.
10.8	Registration Rights Agreement, dated May 31, 2006, by and among Reynolds American Inc., the guarantors listed in Schedule 1 thereto, Lehman Brothers Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., and the initial purchasers named in Schedule 2 thereto.
99.1	Press Release, dated May 31, 2006

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: June 6, 2006

REYNOLDS AMERICAN INC.
By:	/s/McDara P. Folan, III
	Name: McDara P. Folan, III
	Title:	Senior Vice President, Deputy General Counsel and Secretary

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Exhibit Index

Exhibit No.	Description
2.1	Amendment No. 1, dated as of May 31, 2006, to the Purchase Agreement, dated as of April 24, 2006, by and among Karl J. Breyer, Marshall E. Eisenberg and Thomas J. Pritzker, as trustees, GP Investor, L.L.C., Reynolds American Inc. and Conwood Holdings, Inc. (f/k/a Pinch Acquisition Corporation).
4.1	Indenture dated May 31, 2006, among Reynolds American Inc. and certain of its subsidiaries as guarantors and The Bank of New York Trust Company, N.A. as trustee.
4.2	Form of Reynolds American Inc. 7.250% Senior Secured Note due 2013.
4.3	Form of Reynolds American Inc. 7.625% Senior Secured Note due 2016.
4.4	Form of Reynolds American Inc. 7.750% Senior Secured Note due 2018.
4.5	Fifth Supplemental Indenture dated May 31, 2006, to Indenture dated May 15, 1999, among R.J. Reynolds Tobacco Holdings, Inc., Reynolds American Inc. and certain subsidiaries of R.J. Reynolds Tobacco Holdings, Inc. as guarantors and the Bank of New York Trust Company, N.A. as trustee.
4.6	Third Supplemental Indenture dated May 31, 2006, to Indenture dated May 20, 2002, among R.J. Reynolds Tobacco Holdings, Inc., Reynolds American Inc. and certain subsidiaries of R.J. Reynolds Tobacco Holdings, Inc. as guarantors and the Bank of New York Trust Company, N.A. as trustee.
10.1	Fourth Amended and Restated Credit Agreement, dated as of May 31, 2006, among Reynolds American Inc., the agents and other parties named therein, and the lending institutions listed from time to time on Annex I thereto.
10.2	Second Amended and Restated Pledge Agreement, dated as of May 31, 2006, among Reynolds American Inc., certain of its subsidiaries as pledgors and JPMorgan Chase Bank, N.A. as collateral agent.
10.3	Second Amended and Restated Security Agreement, dated as of May 31, 2006, among Reynolds American Inc., certain of its subsidiaries as assignors and JPMorgan Chase Bank, N.A. as collateral agent.
10.4	Fifth Amended and Restated Subsidiary Guaranty, dated as of May 31, 2006, among certain of the subsidiaries of Reynolds American Inc. as guarantors and JPMorgan Chase Bank, N.A. as administrative agent.

Exhibit No.	Description
10.5	Form of First Amended and Restated Deed of Trust, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing (North Carolina) made as of May 31, 2006, by R. J. Reynolds Tobacco Company, as the Trustor, to The Fidelity Company, as Trustee.
10.6	Form of First Amended and Restated Deed to Secure Debt, Security Agreement, Assignment of Leases, Rents and Profits (Bibb County, Georgia) made as of May 31, 2006, by R. J. Reynolds Tobacco Company, as the Grantor, to JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent for the Secured Creditors, as the Grantee.
10.7	Form of First Amended and Restated Mortgage, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing (Cherokee County, South Carolina) made as of May 31, 2006, by R. J. Reynolds Tobacco Company, as the Mortgagor, to JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent for the Secured Creditors, as the Mortgagee.
10.8	Registration Rights Agreement, dated May 31, 2006, by and among Reynolds American Inc., the guarantors listed in Schedule 1 thereto, Lehman Brothers Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., and the initial purchasers named in Schedule 2 thereto.
99.1	Press Release, dated May 31, 2006

EX-2.1

EXHIBIT 2.1

AMENDMENT NO. 1 TO

PURCHASE AGREEMENT

BY AND AMONG

KARL J. BREYER, MARSHALL E. EISENBERG AND THOMAS J. PRITZKER
NOT INDIVIDUALLY, BUT SOLELY AS TRUSTEES,

GP INVESTOR, L.L.C.,

REYNOLDS AMERICAN INC.

AND

CONWOOD HOLDINGS, INC.
(f/k/a PINCH ACQUISITION CORPORATION)

DATED AS OF May 31, 2006

     This AMENDMENT NO. 1 TO PURCHASE AGREEMENT (this “Amendment”), dated as of May 31, 2006, is made by and among (i) Karl J. Breyer, Marshall E. Eisenberg and Thomas J. Pritzker, not individually, but solely as co-trustees (the “Trust Sellers”) of those certain separate and distinct trusts listed on Schedule 1 (the “Trusts”), (ii) GP Investor, L.L.C., a Delaware limited liability company (the “LLC Seller” and, together with the Trust Sellers, “Sellers”), (iii) solely for the purposes of Sections 7.1, 7.2, and 7.9 of the Purchase Agreement (as defined below), Reynolds American Inc., a North Carolina corporation (“Parent”), and (iv) Conwood Holdings, Inc. (f/k/a Pinch Acquisition Corporation), a Delaware corporation and wholly-owned subsidiary of Parent (the “Purchaser”).

     WHEREAS, Purchaser and Sellers are parties to that certain Purchase Agreement, dated as of April 24, 2006 (the “Purchase Agreement”); and

     WHEREAS, pursuant to Section 11.8 of the Purchase Agreement, Purchaser and Sellers desire to amend the Purchase Agreement as provided in this Amendment.

     NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

     1. Amendments to the Purchase Agreement.

 1.1 Section 3.1(f)(ii) of the Purchase Agreement is deleted in its entirety and the following word shall be inserted in its place:

     [Reserved.]

 1.2 Section 7.1(e) of the Purchase Agreement is hereby amended to read in its entirety as follows:

Severance. Parent shall maintain, or shall cause one of its Affiliates to maintain, sponsorship of the Conwood Executive Retention Plan and the Conwood Employee

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Severance Plan as those plans shall be adopted by the applicable Acquired Companies, with the approval of Parent, which approval shall not be unreasonably withheld (the “Severance Plans”). Parent shall provide, or shall cause to be provided, severance benefits to Company Employees in accordance with the terms of such Severance Plans as of the Closing Date so long as the Company Employees are employed by Parent or one of its Affiliates (but not beyond the time period required by the Severance Plans as of the Closing Date). Neither Parent nor any of its Affiliates shall amend or terminate either of the Severance Plans except as provided under the terms of such Severance Plans as of the Closing Date. Any severance costs which arise in connection with the transactions contemplated herein shall be the sole responsibility of Parent.

1.3 Section 9.3 of the Purchase Agreement is hereby amended to insert “(a)” after the heading “Tax Cooperation.” and adding the following new paragraph as subsection (b) immediately following the existing text of Section 9.3:

(b) (1) Subject to any specific dispute resolution provisions set forth elsewhere in this Agreement and to Section 9.3(b)(2) below, all disputes between the Parties directly and solely related to Taxes arising from a Pre-Closing Tax Period or a Post-Closing Tax Period, including Tax related disputes under Sections 4.9(k) or 4.17 or Articles IX or X of this Agreement, shall proceed as follows: (A) if any dispute cannot be resolved by the parties after meeting (in person or by telephone) to attempt to resolve any such dispute, any Party may make a written demand to the other Party for mediation and specify therein, in

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reasonable detail, the nature and scope of the dispute; (B) within 15 days, or longer if mutually agreed by the Parties, after such written notification is received, the Parties shall jointly select an independent mediator, who shall have at least 10 years experience in matters relating to Taxes, to mediate such dispute; and (C) within 30 days, or longer if mutually agreed by the Parties, following the selection of the mediator, the Parties shall meet for one (1) day with the jointly selected mediator in an attempt to resolve the dispute; provided, however, that (i) such mediation will not be binding upon any of the Parties and (ii) failure to jointly select a mediator within the above specified period shall terminate the effectiveness of this Section 9.3(b) in respect of the relevant Tax dispute.

(2) Notwithstanding the provisions of Section 9.3(b)(1), each Party shall have the right, without the requirement of first seeking a remedy through mediation, to pursue any of its rights and remedies otherwise available under Applicable Law or as set forth in this Agreement.

1.4 Section 9.4(a) of the Purchase Agreement is hereby amended to read in its entirety as follows:

Subject to the terms and conditions of this Article IX, from and after the Closing, Sellers shall cause Remainco to enter into a joinder agreement at the Closing pursuant to which Remainco shall agree to become a party to this Agreement to indemnify, defend and hold harmless the Purchaser Indemnitees as provided in Section 10.6 from and against all Liability for (i) Taxes of the Company or the Acquired Companies (other than Purchaser Taxes) for all Pre-Closing Tax

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Periods, including, without limitation (x) any Taxes of the Company or the Acquired Companies imposed under Sections 1374 or 1375 of the Code and (y) Taxes arising from or relating to the Preliminary Transactions, (ii) without duplication, any Losses resulting from any breach of any of the representations and warranties contained in Sections 4.9(k) and 4.17 (determined for purposes of this Section 9.4 without reference to any qualification in such representation or warranty of materiality, Material Adverse Effect, substantial compliance or dollar threshold) and (iii) without duplication, all Losses arising from a breach by the Sellers of any covenant contained in this Article IX. Such Taxes shall not include Taxes or the amount of such Taxes paid by the Company and the Acquired Companies at or prior to the Closing or paid by Sellers or any of their Affiliates (other than the Company or the Acquired Companies) at any time. Notwithstanding anything to the contrary in this Agreement, neither Sellers nor Remainco shall be liable for or pay for (i) any Taxes that are imposed on the Company or any Acquired Company as a result of actions taken or elections made by the Purchaser, the Company or any Acquired Company after the Closing Date (collectively, “Purchaser Taxes”), including elections under Section 338(g) of the Code or Treasury Regulation § 301.7701-3 or (ii) any Taxes subject to indemnification by the Purchaser under this Section 9.4. Liability for Taxes includes any Tax payment as a result of a settlement, agreed order, closing agreement, or other similar compromise.

1.5 Section 11.1(a) and (b) of the Purchase Agreement are hereby amended to read in their entirety as follows:

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a. if to Sellers or for purposes of Article X, Remainco:

c/o The Pritzker Organization, LLC
71 S. Wacker Drive, Suite 4700
Chicago, IL 60606
Attn: John E. Stellato
Telecopier No.: (312) 873-4983
email: jstellato@pritzkerorg.com

With a concurrent copies to:

Latham & Watkins LLP
885 Third Avenue, Suite 1000
New York, NY 10022
Attn: Barry A. Bryer, Esq.
Telecopier No.: (212) 751-4864
email: barry.bryer@lw.com

Latham & Watkins LLP
5800 Sears Tower
Chicago, Illinois 60606
Attn: Michael A. Pucker
Telecopier No.: (312) 993-9767
email: Michael.pucker@lw.com

b. If to Parent or the Purchaser:

Reynolds American Inc.
401 North Main Street
Winston-Salem, NC 27101
Attn: General Counsel
Telecopier No.: (336) 741-2998
email: blixtc@rjrt.com

With a concurrent copy to:

Jones Day
222 East 41st Street
New York, NY 10017
Attn: Jere R. Thomson, Esq.
Telecopier No.: (212) 755-7306
email: jrthomson@jonesday.com

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1.6 Schedule 10.6 of the Disclosure Schedules is hereby amended to read in its entirety as set forth on Exhibit A attached hereto.

2. Definitions. Any capitalized terms used but not defined in this Amendment shall have the meaning ascribed to such terms in the Purchase Agreement.

3. Limited Amendment. This Amendment is limited by its terms and does not and shall not serve to amend or waive any provision of the Purchase Agreement except as expressly provided for in this Amendment. The Purchase Agreement, as amended by this Amendment, is hereby ratified and confirmed and shall continue in full force and effect.

4. Counterparts. This Agreement may be executed by the Parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

5. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to its conflict of laws principles.

6. Trustee Exculpation. Each trustee executing this Amendment is executing the same solely in his capacity as a trustee of one or more of the Trusts. All obligations and liabilities of any trustee executing this Amendment shall be satisfied solely out of the assets of the trust or trusts on whose behalf such trustee is executing this Amendment, and such trustee shall not be personally liable for the satisfaction of any of such obligations or liabilities as a result of his execution of this Amendment.

[remainder of this page intentionally left blank]

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     IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the date first above written.

The Trusts Identified on Schedule 1 of the Purchase Agreement
By:	/s/ Thomas J. Pritzker
	Thomas J. Pritzker, not individually, but solely as co-trustee of each of those separate and distinct trusts listed on Schedule 1 of the Purchase Agreement
By:	/s/ Marshall E. Eisenberg
	Marshall E. Eisenberg, not individually, but solely as co-trustee of each of those separate and distinct trusts listed on Schedule 1 of the Purchase Agreement
By:	/s/ Karl J. Breyer
	Karl J. Breyer, not individually, but solely as co-trustee of each of those separate and distinct trusts listed on Schedule 1 of the Purchase Agreement

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GP INVESTOR, L.L.C.
By:	FLP Trust #10, its sole member
By:	/s/ Thomas J. Pritzker
	Thomas J. Pritzker, not individually, but solely as co-trustee of FLP Trust #10
By:	/s/ Marshall E. Eisenberg
	Marshall E. Eisenberg, not individually, but solely as co-trustee of FLP Trust #10
By:	/s/ Karl J. Breyer
	Karl J. Breyer, not individually, but solely as co-trustee of FLP Trust #10

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REYNOLDS AMERICAN INC.
By:	/s/ McDara P. Folan, III
	Name: McDara P. Folan, III
	Title: Senior Vice President, Deputy General Counsel and Assistant Secretary
CONWOOD HOLDINGS, INC.
By:	/s/ McDara P. Folan, III
	Name: McDara P. Folan, III
	Title: Vice President and Secretary

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EXHIBIT A

SCHEDULE 10.6
Remainco Covenants

A. Remainco shall maintain FMV of at least $250 million from the Closing through the earlier of (x) the expiration of the statute of limitations for the audit of Old Asworth’s 2003 Tax year and (y) the completion of the IRS’s Tax audit of Old Asworth’s 2003 Tax year if the total proposed adjustments are less than $10,000,000 (the “Initial Period”). Thereafter, Remainco shall maintain FMV of: (i) at least $250 million until the first anniversary of the end of the Initial Period, (ii) at least $100 million from the date after the first anniversary of the end of the Initial Period until the second anniversary of the end of the Initial Period, (iii) at least $50 million from the date after the second anniversary of the end of the Initial Period until the third anniversary of the end of the Initial Period, and (iv) at least $25 million from the date after the third anniversary of the end of the Initial Period until the fourth anniversary of the end of the Initial Period. From and after the fourth anniversary of the end of the Initial Period, Remainco shall have no obligation to maintain any FMV. To the extent Losses indemnified by Remainco pursuant to Section 9.4 or Section 10.2(b) of the Agreement reduce the FMV of Remainco below the FMV that Remainco is required to maintain during any period specified in clauses (i)-(iv) of Section 10.6, paragraph (A) of the Disclosure Schedules to the Agreement, the FMV that Remainco is required to maintain during such period shall be reduced to the FMV of Remainco resulting from such Losses. However, such indemnification shall not affect the level of the FMV required to be maintained in any subsequent period except to the extent the aggregate amount of such indemnification has caused the remaining FMV to be below such level. Such reduction shall apply for all periods set forth above after any such indemnity payment is made.

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B. As used herein, “FMV” shall mean the fair market value of Remainco on a consolidated basis determined by Duff & Phelps LLC without regard to discounts for illiquidity, lack of marketability or minority interests.

C. Until the fourth anniversary of the end of the Initial Period, Remainco shall deliver to the Purchaser promptly following its preparation, but in no event later than one hundred and eighty (180) days after its fiscal year end, a report on the FMV of Remainco prepared by Duff & Phelps LLC.

D. From and after the Closing until the fourth anniversary of the end of the Initial Period, Remainco (i) shall not distribute any assets to its members unless it has FMV in excess of the FMV that it is required to have on the date of such distribution as set forth in Section 10.6 of the Agreement and Schedule 10.6 of the Disclosure Schedules to the Agreement (and then only to the extent of such excess) and (ii) shall advise the Purchaser of any material adverse events related to Remainco.

E. Sellers shall cause to be satisfied from sources other than Remainco the liabilities of Old Asworth for income Taxes to the extent such liabilities are shown or expected to be shown on any Tax Return originally prepared and filed, by or at the direction of Sellers, for Pre-Closing Tax Periods ending in 2006.

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EX-4.1

EXHIBIT 4.1

REYNOLDS AMERICAN INC.

Issuer,

SANTA FE NATURAL TOBACCO COMPANY, INC.,

LANE LIMITED,

R. J. REYNOLDS TOBACCO COMPANY,

RJR ACQUISITION CORP.,

R.J. REYNOLDS TOBACCO CO.

FHS, INC.,

GMB, INC.,

CONWOOD HOLDINGS, INC.,

CONWOOD COMPANY, L.P.,

CONWOOD SALES CO., L.P.,

and

ROSSWIL LLC,

as Guarantors,

and

THE BANK OF NEW YORK TRUST COMPANY, N.A.

as Trustee

INDENTURE

dated as of

May 31, 2006

Table of Contents

Contents		Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE			1
Section 1.1	Definitions		1
Section 1.2	Incorporation by Reference of TIA		7
Section 1.3	Rules of Construction		8
ARTICLE II SECURITIES			8
Section 2.1	Forms Generally		8
Section 2.2	Form of Trustee’s Certification of Authentication		9
Section 2.3	Amount Unlimited; Issuable in Series		9
Section 2.4	Execution, Authentication and Denominations		10
Section 2.5	Registrar and Paying Agent		11
Section 2.6	Paying Agent to Hold Money in Trust		12
Section 2.7	Transfer and Exchange		12
Section 2.8	Mutilated, Defaced, Destroyed, Lost and Stolen Securities		17
Section 2.9	Definitive Securities		18
Section 2.10	Outstanding Securities		18
Section 2.11	Temporary Securities		19
Section 2.12	Cancellation		19
Section 2.13	Payment of Interest; Defaulted Interest		19
Section 2.14	Computation of Interest		20
Section 2.15	CUSIP Numbers		20
ARTICLE III COVENANTS			21
Section 3.1	Payment of Securities		21
Section 3.2	Maintenance of Office or Agency		21
Section 3.3	SEC Reports and Available Information		21
Section 3.4	Certificate to Trustee		21
Section 3.5	Negative Pledge		22
Section 3.6	Certain Sale and Lease-back Transactions		24
Section 3.7	Corporate Existence		25
Section 3.8	Payment of Taxes and Other Claims		25
Section 3.9	Waiver of Stay, Extension or Usury Laws		25
Section 3.10	Further Instruments and Acts		26
Section 3.11	Notice of Defaults		26
Section 3.12	RJR Indebtedness		26
ARTICLE IV CONSOLIDATION, MERGER, SALE OR CONVEYANCE			26
Section 4.1	Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions		26

Contents		Page
Section 4.2	Successor Corporation Substituted		26
Section 4.3	Opinion of Counsel to Trustee		27
ARTICLE V REDEMPTION OF SECURITIES			27
Section 5.1	Applicability of Article		27
Section 5.2	Selection of Securities to Be Redeemed		27
Section 5.3	Exclusion of Certain Securities from Eligibility for Selection for Redemption		27
Section 5.4	Notice of Redemption		27
Section 5.5	Effect of Notice of Redemption		28
Section 5.6	Deposit of Redemption Price		28
Section 5.7	Securities Payable on Redemption Date		28
Section 5.8	Securities Redeemed in Part		29
Section 5.9	Mandatory and Optional Sinking Funds		29
ARTICLE VI DEFAULTS AND REMEDIES			31
Section 6.1	Event of Default Defined; Acceleration of Maturity; Waiver of Default		31
Section 6.2	Collection of Indebtedness by Trustee; Trustee May Prove Debt		33
Section 6.3	Application of Proceeds		35
Section 6.4	Suits for Enforcement		36
Section 6.5	Restoration of Rights on Abandonment of Proceedings		36
Section 6.6	Limitations on Suits by Securityholders		36
Section 6.7	Unconditional Right of Securityholders to Institute Certain Suits		36
Section 6.8	Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default		37
Section 6.9	Control by Securityholders		37
Section 6.10	Waiver of Past Defaults		37
Section 6.11	Trustee to Give Notice of Default, But May Withhold in Certain Circumstances		38
Section 6.12	Right of Court to Require Filing of Undertaking to Pay Costs		38
ARTICLE VII TRUSTEE			38
Section 7.1	Duties of Trustee		38
Section 7.2	Rights of Trustee		40
Section 7.3	Individual Rights of Trustee		41
Section 7.4	Trustee’s Disclaimer		41
Section 7.5	Notice of Defaults		41
Section 7.6	Reports by Trustee to Holders		41
Section 7.7	Compensation and Indemnity		41
Section 7.8	Replacement of Trustee		42
Section 7.9	Successor Trustee by Merger		43
Section 7.10	Eligibility; Disqualification		43
Section 7.11	Preferential Collection of Claims Against the Company		44

Contents		Page
ARTICLE VIII SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS			44
Section 8.1	Satisfaction and Discharge of Indenture		44
Section 8.2	Defeasance		45
Section 8.3	Application by Trustee of Funds Deposited for Payment of Securities		47
Section 8.4	Repayment of Moneys Held by Paying Agent		47
Section 8.5	Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years		48
ARTICLE IX AMENDMENTS			48
Section 9.1	Without Consent of Securityholders		48
Section 9.2	With Consent of Securityholders		49
Section 9.3	Effect of Supplemental Indenture		50
Section 9.4	Documents to Be Given to Trustee		50
Section 9.5	Notation on Securities in Respect of Supplemental Indentures		51
Section 9.6	Compliance with TIA		51
Section 9.7	Revocation and Effect of Consents and Waivers		51
Section 9.8	Trustee to Sign Amendments		51
ARTICLE X GUARANTEES			51
Section 10.1	Guarantees		51
Section 10.2	Limitation on Liability; Termination, Release and Discharge		53
Section 10.3	Right of Contribution		53
Section 10.4	No Subrogation		53
Section 10.5	Future Guarantors		54
ARTICLE XI SECURITY DOCUMENTS			54
Section 11.1	Security Documents		54
Section 11.2	Recording and Opinions		55
Section 11.3	Release of Collateral		55
Section 11.4	Certificates of the Trustee		55
Section 11.5	Authorization of Actions To Be Taken by the Trustee Under the Security Documents55
Section 11.6	Authorization of Receipt of Funds by the Trustee Under the Security Documents		56
Section 11.7	Termination of Security Interest		56
Section 11.8	Collateral Agent		56
Section 11.9	Suits to Protect the Collateral		56
Section 11.10	Powers Exercisable by Receiver or Trustee		56
ARTICLE XII MISCELLANEOUS			57
Section 12.1	TIA Controls		57
Section 12.2	Notices		57

Contents		Page
Section 12.3	Communication by Holders with Other Holders		58
Section 12.4	Certificate and Opinion as to Conditions Precedent		58
Section 12.5	Statements Required in Certificate or Opinion		58
Section 12.6	When Securities Disregarded		58
Section 12.7	Rules by Trustee, Paying Agent and Registrar		59
Section 12.8	Legal Holidays		59
Section 12.9	GOVERNING LAW		59
Section 12.10	No Recourse Against Others		59
Section 12.11	Successors		59
Section 12.12	Multiple Originals		59
Section 12.13	Variable Provisions		59
Section 12.14	Qualification of Indenture		59
Section 12.15	Incorporators, Stockholders, Officers and Directors of Company Exempt and Individual Liability		59
Section 12.16	Provisions of Indenture for the Sole Benefit of Parties and Securityholders		60
Section 12.17	Waiver of Jury Trial		60
Section 12.18	Force Majeure		60

INDENTURE dated as of May 31, 2006 among REYNOLDS AMERICAN INC., a North Carolina corporation (the "Company”), and SANTA FE NATURAL TOBACCO COMPANY, INC., a New Mexico corporation (“Santa Fe”), LANE LIMITED, a New York corporation (“Lane”), R. J. REYNOLDS TOBACCO COMPANY, a North Carolina corporation (“RJRT”), RJR ACQUISITION CORP., a Delaware Corporation, R.J. REYNOLDS TOBACCO CO., a Delaware corporation, FHS, INC., a Delaware corporation, GMB, INC., a North Carolina corporation, CONWOOD HOLDINGS, INC., a Delaware corporation (“Conwood”), CONWOOD COMPANY L.P., a Delaware limited partnership, CONWOOD SALES CO. L.P., a Delaware limited partnership, and ROSSWIL LLC, a Delaware limited liability company, as Guarantors (as defined herein) and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association (the “Trustee”) as Trustee.

Whereas, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Securities”) up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture and to provide, among other things, for the authentication, delivery and administration thereof;

Whereas, each Guarantor (as defined herein) has duly authorized the execution and delivery of this Indenture to provide for the issuance of its Guarantee (as defined herein); and

Whereas, all things necessary to make this Indenture a valid and legally binding indenture and agreement according to its terms have been done and the Company has done all things necessary to make the Securities, when executed by the Company and authenticated and delivered by the Trustee hereunder and duly issued by the Company, valid and legally binding obligations of the Company as hereinafter provided;

Now, Therefore, in consideration of the premises and the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities as follows.

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1 Definitions

“Affiliate” means, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under direct or indirect common Control with, such Person.

“Agent” means any Registrar, Co-Registrar, Paying Agent, Transfer Agent or authenticating agent.

“Attributable Debt” means, when used in connection with a sale and lease-back transaction, at any date as of which the amount thereof is to be determined, the product of (a) the net proceeds from such sale and lease-back transaction multiplied by (b) a fraction, the numerator of which is the number of full years of the term of the lease relating to the property involved in such sale and lease-back transaction (without regard to any options to renew or extend such term) remaining at the date of the making of such computation and the denominator of which is the number of full years of the term of such lease measured from the first day of such term.

“Authorized Newspaper” means a newspaper (which, in the case of The City of New York, will, if practicable, be The Wall Street Journal (Eastern Edition), and in the case of the United

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Kingdom, will, if practicable, be the Financial Times (London Edition)) published in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in The City of New York and the United Kingdom.

“Bank Credit Agreement” means the Fourth Amended and Restated Credit Agreement, dated as of May 31, 2006, among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent and the various lending institutions named on the signature pages thereof, as such agreement may be amended, modified, renewed, refunded, restated, refinanced or replaced from time to time.

“Bank Credit Agreement Guarantor” means every Subsidiary of the Company that is or becomes a guarantor under the Bank Credit Agreement from time to time; provided that, to the extent that any Subsidiary ceases to be a guarantor under the Bank Credit Agreement, such Subsidiary shall cease to be a Bank Credit Agreement Guarantor.

“Bankruptcy Law” means the Bankruptcy Reform Act of 1978, as amended, and as codified in Title 11 of the United States Code, as amended from time to time hereafter, or any successor federal bankruptcy law.

“Board of Directors” means, with respect to any Person, the Board of Directors of such Person or any committee thereof duly authorized to act on behalf of such Board of Directors.

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means a day which is not, in New York City, a Saturday, Sunday, legal holiday or other day on which banking institutions are authorized or obligated by law to close.

“capital stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, partnership interests and limited liability company membership interests, but excluding any debt securities convertible into such equity.

“Collateral” means the assets of the Company and the Restricted Subsidiaries as required to be pledged pursuant to Section 3.5 of this Indenture.

“Collateral Agent” means the party named as such in the Security Documents until a successor replaces it and, thereafter, means such successor.

“Company Order” means a written request or order signed in the name of the Company or a successor person (i) by its Chairman of the Board, its Chief Executive Officer, its President, an Executive Vice President, a Senior Vice President, a Vice President or its Chief Financial Officer and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee; provided, however, that such written request or order may be signed by any two officers or directors listed in clause (i) above in lieu of being signed by one of such officers or directors listed in such clause (i) and one of the officers listed in clause (ii) above.

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“Consolidated Net Worth” means, at any date of determination, the consolidated stockholders’ equity of the Company, as set forth on the then most recently available consolidated balance sheet of the Company and its consolidated Subsidiaries.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. A Person shall be deemed to Control another Person if such Person (i) is an officer or director of such other Person or (ii) directly or indirectly owns or controls 10% or more of such other Person’s capital stock. “Controlling” and “Controlled” have meanings correlative thereof.

“Conwood” means Conwood Holdings Inc.

“Corporate Trust Office” means the principal office of the Trustee at which any particular time its corporate trust business shall be administered which office at the date of the execution of this Indenture is located at 10161 Centurion Parkway, Jacksonville, Florida 32256, Attention: Corporate Trust Administration, or at any other time at such other address as the Trustee may designate from time to time by notice to the Holders.

“Covenant Defeasance” has the meaning set forth in Section 8.2.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Defaulted Interest” has the meaning set forth in Section 2.13.

“Dollar” means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

“DTC” means The Depository Trust Company, its nominees and their respective successors and assigns.

“Event of Default” has the meaning set forth in Section 6.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exempted Debt” means the sum, without duplication, of the following items outstanding as of the date Exempted Debt is being determined: (i) indebtedness of the Company and the Restricted Subsidiaries incurred after the date hereof and secured by liens created, assumed or otherwise incurred or permitted to exist pursuant to Section 3.5(b); and (ii) Attributable Debt of the Company and the Restricted Subsidiaries in respect of all sale and lease-back transactions with regard to any Principal Property entered into pursuant to Section 3.6(b).

“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any state thereof or the District of Columbia.

“Funded Debt” means all indebtedness for money borrowed, including purchase money indebtedness, having a maturity of more than one year from the date of its creation or having a maturity of less than one year but by its terms being renewable or extendible, at the option of the obligor in respect thereof, beyond one year from its creation.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the date hereof.

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“Global Security” or “Global Securities” means one or more Securities in registered global form, without interest coupons.

“guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term “guarantee” used as a verb has a corresponding meaning.

“Guarantee” means, individually, any guarantee of payment of the Securities by a Guarantor pursuant to the terms of this Indenture, and, collectively, all such Guarantees.

“Guarantor” means each Subsidiary of the Company party to this Indenture as a guarantor, and each Subsidiary of the Company other than RJR that is or becomes a Bank Credit Agreement Guarantor and any other Person that becomes a Bank Credit Agreement Guarantor; provided, that, to the extent that any or all of such Subsidiaries cease to be Bank Credit Agreement Guarantors, such Subsidiaries shall cease to be Guarantors.

“Holder” or “Securityholder” means the Person in whose name a Security is registered on the Registrar’s books.

“Incur” means issue, assume, guarantee, incur or otherwise become liable for.

“Indenture” means this Indenture, as amended or supplemented from time to time.

“Legal Holiday” has the meaning set forth in Section 12.8.

“Lane” means Lane Limited.

“Lien” means, with respect to any asset, any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest.)

“Moody’s” means Moody’s Investors Service, Inc.

“Nonrecourse Obligation” means indebtedness or other obligations substantially related to (i) the acquisition of assets by the Company, any Guarantor or any of their respective Subsidiaries or (ii) the financing of a project involving the development or expansion of properties of the Company, any Guarantor or any of their respective Subsidiaries, as to which the obligee with respect to such indebtedness or obligation has no recourse to the Company, any Guarantor or any of their respective Subsidiaries or any assets of the Company, any Guarantor or any of their respective Subsidiaries other than the assets which were acquired with the proceeds of such transaction or the project financed with the proceeds of such transaction (and the proceeds thereof).

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“Notice of Default” has the meaning set forth in Section 6.1.

“Obligations” has the meaning provided in Section 10.1.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the President, an Executive Vice President, a Senior Vice President, a Vice President, the Treasurer, the Chief Financial Officer or the Secretary of the Company, as applicable.

“Officers’ Certificate” means a certificate signed by any two Officers of the Company.

“Opinion of Counsel” means a written opinion from Kilpatrick Stockton LLP or any other legal counsel to the Company. The counsel may be an employee of or counsel to the Company.

“Paying Agent” has the meaning provided in Section 2.5, except that, for the purposes of Article Eight, the Paying Agent shall not be the Company or a Subsidiary of the Company or an Affiliate of any of them. The term “Paying Agent” includes any additional Paying Agent.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Principal” means the principal of the Security plus the premium, if any, payable on the Security which is due or overdue or is to become due at the relevant time; provided, however, that for purposes of calculating any such premium, the term “principal” shall not include the premium with respect to which such calculation is being made.

“Principal Property” means land, land improvements, buildings and associated factory and laboratory equipment owned or leased pursuant to a capital lease and used by the Company or a Restricted Subsidiary primarily for processing, producing, packaging or storing its products, raw materials, inventories, or other materials and supplies and located within the United States of America and having an acquisition cost plus capitalized improvements in excess of 2% of Consolidated Net Worth, as of the date of such determination, but not including any such property financed through the issuance of tax exempt governmental obligations, or any such property that has been determined by Board Resolution of the Company not to be of material importance to the respective businesses conducted by the Company or such Restricted Subsidiary effective as of the date such resolution is adopted, provided, that “Principal Property” shall not include any property owned by Santa Fe or Lane.

“Private Placement Legend” has the meaning set forth in Section 2.7(h).

“Registrar” has the meaning set forth in Section 2.5.

“Regulation S” means Regulation S under the Securities Act.

“Regulation S Global Securities” has the meaning set forth in Section 2.1.

“Regulation S Securities” has the meaning set forth in Section 2.1.

“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such

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person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Restricted Period” has the meaning set forth in Section 2.7(c).

“Restricted Subsidiary” means (a) any Subsidiary (other than Lane and Santa Fe and their respective Subsidiaries) organized and existing under the laws of the United States of America and the principal business of which is carried on within the United States of America, which owns or is a lessee pursuant to a capital lease of any Principal Property, and in which the investment of the Company and all its Subsidiaries exceeds 5% of Consolidated Net Worth as of the date of such determination other than (i) each Subsidiary the major part of whose business consists of finance, banking, credit, leasing, insurance, financial services or other similar operations, or any combination thereof; and (ii) each Subsidiary formed or acquired after the date hereof for the purpose of acquiring the business or assets of another person and which does not acquire all or any substantial part of the business or assets of the Company or any Restricted Subsidiary and (b) RJR and Conwood. However, the Board of Directors of the Company may declare any such Subsidiary to be a Restricted Subsidiary.

“Rule 144A” means Rule 144A under the Securities Act.

“Rule 144A Global Securities” has the meaning set forth in Section 2.1.

“Rule 144A Securities” has the meaning set forth in Section 2.1.

“RJR” means R.J. Reynolds Tobacco Holdings, Inc.

“RJRA” means RJR Acquisition Corp.

“RJRT” means R. J. Reynolds Tobacco Company.

“Santa Fe” means Santa Fe Natural Tobacco Company.

“S&P” means Standard & Poor’s, a division of the McGraw Hill Companies, Inc.

“SEC” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act or, if at any time after the execution of this instrument such SEC is not existing and performing the duties now assigned to it under the TIA, then the body performing such duties at such time.

“Securities Act” means the Securities Act of 1933, as amended.

“Security” and “Securities” means any of the securities, as defined in the first paragraph of the recitals hereof, that are authenticated and delivered under this Indenture.

“Security Documents” means, collectively,

(1) the Second Amended and Restated Pledge Agreement, dated as of the date hereof, among the Company, various Subsidiaries of the Company and J.P. Morgan Chase Bank, N.A., as Collateral Agent;

(2) the Second Amended and Restated Security Agreement, dated as of the date hereof among the Company, various Subsidiaries of the Company and JPMorgan Chase Bank, N.A., as Collateral Agent; and

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(3) all security agreements, mortgages, deeds of trust, pledges, collateral assignments and other agreements or instruments evidencing or creating any security interest in favor of the Trustee or the Collateral Agent in any or all of the Collateral, in each case as amended from time to time in accordance with their terms.

“Security Register” has the meaning set forth in Section 2.5.

“Special Interest Payment Date” has the meaning set forth in Section 2.13.

“Special Record Date” has the meaning set forth in Section 2.13.

“Subsidiary” means any corporation of which at least a majority of all outstanding stock having by the terms thereof ordinary voting power in the election of directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation has or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned by the Company, or by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries.

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of this Indenture; provided, however, that, in the event the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendments, the TIA as so amended.

“Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means such successor.

“Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time.

“U.S. Government obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the Company’s option.

Section 1.2 Incorporation by Reference of TIA

This Indenture is subject to the mandatory provisions of the TIA which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings:

“indenture securities” means the Securities.

“indenture security holder” means a Holder or Securityholder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Trustee.

“obligor” on the indenture securities means the Company and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

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Section 1.3 Rules of Construction

Unless the context otherwise requires:

(a)	a term has the meaning assigned to it;
(b)	an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(c)	“or” is not exclusive;
(d)	“including” means including without limitation;
(e)	words in the singular include the plural and words in the plural include the singular;
(f)	“herein”, “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;
(g)	all ratios and computations based on GAAP contained in this Indenture shall be computed in accordance with the definition of GAAP set forth in Section 1.1; and
(h)	all references to Sections or Articles refer to Sections or Articles of this Indenture unless otherwise indicated.

ARTICLE II
SECURITIES

Section 2.1 Forms Generally

The Securities of each series shall be substantially in such form (not inconsistent with this Indenture) as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities, as evidenced by their execution of the Securities.

The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

Securities offered and sold in their initial distribution in reliance on Regulation S shall be initially issued as one or more Global Securities, in registered global form without interest coupons, bearing the Private Placement Legend, except as otherwise permitted herein. Such Global Securities shall be referred to collectively herein as the “Regulation S Global Securities.” The aggregate principal amount of the Regulation S Global Securities may from time to time be increased or decreased by adjustments made on the record of the Registrar, as hereinafter provided, in connection with a corresponding decrease or increase in the aggregate principal amount of the Rule 144A Global Securities or in consequence of the issue of definitive Securities or additional Regulation S Securities, as hereinafter provided. A Regulation S Global Security and all other Securities that are issued pursuant to Regulation S shall collectively be referred to herein as the “Regulation S Securities.”

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Securities offered and sold in their initial distribution in reliance on Rule 144A shall be initially issued as one or more Global Securities in registered, global form without interest coupons, bearing the Private Placement Legend, except as otherwise permitted herein. Such Global Securities shall be referred to collectively herein as the “Rule 144A Global Securities.” The aggregate principal amount of Rule 144A Global Securities may from time to time be increased or decreased by adjustments made on the records of the Registrar, as hereinafter provided, in connection with a corresponding decrease or increase in the aggregate principal amount of the Regulation S Global Securities or in consequence of the issue of definitive Securities or additional Rule 144A Securities, as hereinafter provided. A Rule 144A Global Security and all other Securities, if any, evidencing the debt, or any portion of the debt, initially evidenced by such Rule 144A Global Securities, shall collectively be referred to herein as the “Rule 144A Securities.”

Section 2.2 Form of Trustee’s Certification of Authentication

The Trustee’s certificate of authentication on all Securities shall be in substantially the following form:

This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

Dated:

THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee

By:
	Name:
	Title:	Authorized Signatory

Section 2.3 Amount Unlimited; Issuable in Series

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and set forth in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

(a)	the title of the Securities of the series, including CUSIP numbers, (which shall distinguish the Securities of the series from all other Securities);
(b)	any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.7, 2.8, 2.11 or 5.8 );
(c)	the date or dates on which the principal of the Securities of the series is payable;
(d)	the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such rate shall be determined, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and the record dates for the determination of Holders to whom interest is payable;

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(e)	the place or places where the principal of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.2);
(f)	the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise;
(g)	the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
(h)	if other than denominations of $2,000 and integral multiples of $1,000 in excess thereof, the denominations in which Securities of the series shall be issuable;
(i)	if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.1 or provable in bankruptcy pursuant to Section 6.2;
(j)	whether the Securities will be issued in global form or as uncertificated securities;
(k)	any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture); and
(l)	any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series.

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution or in any such indenture supplemental hereto.

Section 2.4 Execution, Authentication and Denominations

The Securities shall be executed by two Officers. The signature of these Officers on the Securities may be by facsimile or manual signature in the name and on behalf of the Company. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee or authenticating agent authenticates the Security, the Security shall be valid nevertheless.

A Security shall not be valid until the Trustee or authenticating agent manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Securities shall be dated as of the date of their authentication.

At any time and from time to time after the execution of this Indenture, the Trustee or an authenticating agent shall upon receipt of a written order signed by an Officer authenticate for original issue Securities in the aggregate principal amount specified in such order; provided, that the Trustee shall be entitled to receive an Officers’ Certificate and an Opinion of Counsel in connection with such authentication of Securities. Such order shall specify the amount of Securities to be authenticated and the date on which the original issue of Securities is to be authenticated. Securities shall be dated the date of their authentication.

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The Trustee may appoint an authenticating agent to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such authenticating agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.

In case the Company or any Guarantor, pursuant to Article 4 or Article 10, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company or any Guarantor shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article 4 or 10, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the successor Person, shall authenticate and deliver Securities as specified in such order for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section 2.4 in exchange or substitution for or upon registration of transfer of any Securities such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities at the time outstanding for Securities authenticated and delivered in such new name.

Section 2.5 Registrar and Paying Agent

The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Securities may be presented for payment (the “Paying Agent”). The Company shall cause each of the Registrar and the Paying Agent to maintain an office or agency in the Borough of Manhattan, The City of New York. The Registrar shall keep a register of the Securities and of their transfer and exchange (the “Security Register”). The Company may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent.

The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.7. The Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent, Registrar, co-registrar or transfer agent.

The Company initially appoints the Trustee as Registrar and Paying Agent for the Securities. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee as of each record date and at such other times as the Trustee may reasonably request the names and addresses of Holders as they appear in the Security Register, including the aggregate principal amount of Securities held by each Holder.

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Section 2.6 Paying Agent to Hold Money in Trust

By at least 10:00 a.m. (New York City time) on the date on which any principal of, premium, if any, and interest on any Securities is due and payable, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal, premium, if any, and interest when due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by such Paying Agent for the payment of principal of, premium, if any, and interest on the Securities and shall notify the Trustee in writing of any default by the Company or any Guarantor in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money delivered to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities.

Section 2.7 Transfer and Exchange

(a)

The Securities are issuable only in registered form. A Holder may transfer a Security only by written application to the Registrar or another transfer agent stating the name of the proposed transferee and otherwise complying with the terms of this Indenture. No such transfer shall be effected until, and such transferee shall succeed to the rights of a Holder only upon, final acceptance and registration of the transfer by the Registrar in the Security Register. Prior to the registration of any transfer by a Holder as provided herein, the Company, the Trustee, and any agent of the Company shall treat the person in whose name the Security is registered as the owner thereof for all purposes whether or not the Security shall be overdue, and neither the Company, the Trustee, nor any such agent shall be affected by notice to the contrary. When Securities are presented to the Registrar or another transfer agent with a request to register the transfer or to exchange them for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements for such transactions are met (including that such Securities are duly endorsed or accompanied by a written instrument of transfer duly executed by the Holder thereof or by an attorney who is authorized in writing to act on behalf of the Holder). To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Registrar’s request. No service charge shall be made for any registration of transfer or exchange or redemption of the Securities, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or other similar governmental charge payable upon exchanges pursuant to Section 2.11, 5.8 or 9.5).

Neither the Registrar nor any other transfer agent shall be required (i) to issue, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities selected for redemption under Section 5.2 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so

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	selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.
(b)	If a holder of a beneficial interest in a Rule 144A Global Security wishes at any time to exchange its interest in such Rule 144A Global Security for an interest in a Regulation S Global Security, or to transfer its interest in such Rule 144A Global Security to a Person who wishes to take delivery thereof in the form of an interest in a Regulation S Global Security, such holder may, subject to the rules and procedures of DTC to the extent applicable, and to the requirements set forth in the following sentence, exchange or cause the exchange or transfer or cause the transfer of such interest for an equivalent beneficial interest in such Regulation S Global Security. Upon receipt by the Registrar at its offices of (1) written instructions given in accordance with the procedures of DTC, to the extent applicable, from or on behalf of a holder of a beneficial interest in a Rule 144A Global Security, to credit or cause to be credited a beneficial interest in a Regulation S Global Security in an amount equal to the beneficial interest in the Rule 144A Global Security to be exchanged or transferred, (2) a written order given in accordance with the procedures of DTC, to the extent applicable, containing information regarding the account to be credited with such increase and the name of such account, and (3) a certificate given by the holder of such beneficial interest stating that the exchange or transfer of such interest has been made pursuant to and in accordance with Rule 904 of Regulation S, the Registrar shall promptly reduce or reflect on its records a reduction of such Rule 144A Global Security by the aggregate principal amount of the beneficial interest in such Rule 144A Global Security to be so exchanged or transferred from the relevant participant, and the Registrar shall promptly, concurrently with such reduction, increase or reflect on its records an increase of the principal amount of such Regulation S Global Security by the aggregate principal amount of the beneficial interest in such Rule 144A Global Security to be so exchanged or transferred, and to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in such Regulation S Global Security in an amount equal to the reduction in the principal amount of such Rule 144A Global Security.
(c)	If a holder of a beneficial interest in a Regulation S Global Security wishes at any time to exchange its interest in such Regulation S Global Security for an interest in a Rule 144A Global Security, or to transfer its interest in such Regulation S Global Security to a Person who wishes to take delivery thereof in the form of an interest in a Rule 144A Global Security, such holder may, subject to the rules and procedures of DTC, to the extent applicable, and to the requirements set forth in the following sentence, exchange or cause the exchange or transfer or cause the transfer of such interest for an equivalent beneficial interest in such Rule 144A Global Security. Upon receipt by the Registrar at its offices of (1) instructions given in accordance with the procedures of DTC, to the extent applicable, from or on behalf of a beneficial owner of an interest in a Regulation S Global Security, to credit or cause to be credited a beneficial interest in a Rule 144A Global Security in an amount equal to the beneficial interest in the Regulation S Global Security to be exchanged or transferred, (2) a written order given in accordance with the procedures of DTC, to the extent applicable, containing information regarding the account to be credited with such increase and the name of such account,

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	and (3) prior to or on the 40th day after the later of the commencement of the offering of the Securities and the relevant issuance date of the Securities (the “Restricted Period”), a certificate given by the holder of such beneficial interest and stating that the Person transferring such interest in such Regulation S Global Security reasonably believes that the Person acquiring such interest in such Rule 144A Global Security is a Qualified Institutional Buyer (as defined in Rule 144A) and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and any applicable securities laws of any state of the United States or any other jurisdiction, the Registrar shall promptly reduce or reflect on its records a reduction of such Regulation S Global Security by the aggregate principal amount of the beneficial interest in such Regulation S Global Security to be exchanged or transferred, and the Registrar shall promptly increase or reflect on its records an increase of the principal amount of such Rule 144A Security by the aggregate principal amount of the beneficial interest in such Regulation S Global Security to be so exchanged or transferred, and to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in such Rule 144A Global Security equal to the reduction in the principal amount of such Regulation S Global Security. After the expiration of the Restricted Period, the certification requirement set forth in clause (3) of the second sentence of this Section 2.7(c) will no longer apply to such transfers.
(d)	Any beneficial interest in one of the Global Securities that is transferred to a Person who takes delivery in the form of an interest in another Global Security will, upon transfer, cease to be an interest in such Global Security and become an interest in the other Global Security and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest.
(e)	In the event that a Global Security is exchanged for definitive Securities in registered form without interest coupons, pursuant to Section 2.9, or a definitive Security in registered form without interest coupons is exchanged for another such definitive Security in registered form without interest coupons, or a definitive Security is exchanged for a beneficial interest in a Global Security, such Securities may be exchanged or transferred for one another only in accordance with such procedures as are substantially consistent with the provisions of Sections 2.7(a), 2.7(b) and 2.7(c) above (including the certification requirements intended to ensure that such exchanges or transfers comply with Rule 144, Rule 144A or Regulation S, as the case may be) and as may be from time to time adopted by the Company and the Trustee.
(f)	Prior to the expiration of the Restricted Period relating to any Regulation S Global Security, beneficial interests in the relevant Regulation S Global Security may only be exchanged or transferred in accordance with the certification requirements hereof.
(g)	Each Rule 144A Security and Regulation S Security issued hereunder shall, upon issuance, bear the legend set forth herein, and such legend shall not be removed from such Security except as provided in the next sentence. The legend required for a Rule 144A Security may be removed from a Rule 144A Security if there is delivered to the Company and the Trustee such satisfactory evidence, which may include an opinion of independent counsel licensed to practice law in the State of New York as may be

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reasonably required by the Company and the Trustee, that neither such legend nor the restrictions on transfer set forth therein are required to ensure that transfers of such Security will not violate the registration requirements of the Securities Act. Upon provision of such satisfactory evidence, the Trustee, at the written direction of the Company, shall authenticate and deliver in exchange for such Security another Security or Securities having an equal aggregate principal amount that does not bear such legend. If such a legend required for a Rule 144A Security has been removed from a Rule 144A Security as provided above, no other Security issued in exchange for all or part of such Security shall bear such legend, unless the Company has reasonable cause to believe that such other Security is a “Restricted Security” within the meaning of Rule 144 and instructs the Trustee to cause a legend to appear thereon.

(h)	Rule 144A Securities and Regulation S Securities shall bear the following legend (the “Private Placement Legend”) on the face thereof:
	THIS SECURITY OF REYNOLDS AMERICAN INC. (THE “COMPANY”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR OTHER LAWS.
	THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WERE THE OWNERS OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL, OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON

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	RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THAT AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, THE TRUSTEE AND THE REGISTRAR IS COMPLETED AND DELIVERED BY THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
(i)	By its acceptance of any Security bearing the Private Placement Legend, each Holder of such Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture.
(j)	Neither the Trustee nor any Paying Agent or Registrar shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(k)	The Trustee and Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.9 or this Section 2.7. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.
(l)	Definitive Securities shall be transferable only upon the surrender of a definitive Security for registration of transfer. When a definitive Security is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements for such transfers are met. When definitive Securities are presented to the Registrar with a request to exchange them for an equal principal amount of definitive Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the

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	Company shall execute and the Trustee shall authenticate definitive Securities at the Registrar’s request.
(m)	Prior to the due presentation for registration of transfer of any definitive Security, the Company, the Trustee, the Paying Agent or the Registrar may deem and treat the Person in whose name a definitive Security is registered as the absolute owner of such definitive Security for the purpose of receiving payment of principal, interest, or other amounts, if any, on such definitive Security and for all other purposes whatsoever, whether or not such definitive Security is overdue, and none of the Company, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
(n)	The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.7.
(o)	All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture will evidence the same debt and will be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

Section 2.8 Mutilated, Defaced, Destroyed, Lost and Stolen Securities

In case any temporary or definitive Security shall become mutilated or defaced or be destroyed, lost or stolen, the Company in its discretion may execute, and upon the written request of any Officer, the Trustee shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced Security, or in lieu of and substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substitute Security shall furnish to the Company and to the Trustee and any agent of the Company or the Trustee such security or indemnity as may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof.

Upon the issuance of any substitute Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Security which has matured or is about to mature or has been called for redemption in full shall become mutilated or defaced or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated or defaced Security), if the applicant for such payment shall furnish to the Company and to the Trustee and any agent of the Company or the Trustee such security or indemnity as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof.

Every substitute Security of any series issued pursuant to the provisions of this section by virtue of the fact that any such Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other Securities of such series duly authenticated and delivered hereunder. All Securities shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing provisions are

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exclusive with respect to the replacement or payment of mutilated, defaced or destroyed, lost or stolen Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

Section 2.9 Definitive Securities

(a)	A Global Security authenticated by the Trustee pursuant to Section 2.2 hereof shall be transferred to the beneficial owners thereof in the form of definitive Securities only if such transfer complies with Section 2.7 hereof and (i) DTC notifies the Company that it is unwilling or unable to continue to act and a successor clearing agency is not appointed by the Company within 90 days of such notice, (ii) DTC so requests following an Event of Default hereunder or (iii) as otherwise permitted after an Event of Default.
(b)	Any Global Security that is transferable to the beneficial owners thereof in the form of definitive Securities pursuant to this Section 2.9 shall be surrendered by DTC to the Registrar, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount at maturity of Securities of authorized denominations. Any portion of a Global Security transferred or exchanged pursuant to this Section shall be executed, authenticated and delivered only in registered form in denominations of at least $2,000 and integral multiples of $1,000, and registered in such names as DTC shall direct. Subject to the foregoing, a Global Security is not exchangeable except for a Global Security of like denomination to be registered in the name of DTC or its nominee. In the event that a Global Security becomes exchangeable for definitive Securities, (i) payment of principal, any repurchase price, any premium, and interest on the definitive Securities will be payable, and the transfer of the definitive Securities will be registrable, at the office or agency of the Company maintained for such purposes and (ii) no service charge will be made for any issuance of the definitive Securities, although the Company may require payment of a sum sufficient to cover any tax or governmental charge imposed in connection therewith.
(c)	In the event of the occurrence of any of the events specified in Section 2.9(a) hereof, the Company will promptly make available to the Trustee a reasonable supply of definitive Securities in definitive, fully registered form without interest coupons.

Section 2.10 Outstanding Securities

Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Security ceases to be outstanding in the event the Company or an Affiliate of the Company holds the Security, provided, however, that for purposes of determining which are outstanding for consent or voting purposes hereunder, in determining whether the Trustee shall be protected in making a determination whether the holders of the requisite principal amount of outstanding Securities are present at a meeting of holders of Securities for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying upon any such quorum, consent or vote, only Securities which a Responsible Officer of the Trustee actually knows to be held by the Company or an Affiliate of the Company shall not be considered outstanding.

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If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal, premium, if any, and interest, payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

Section 2.11 Temporary Securities

Until definitive Securities of any series are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency maintained by the Company for that purpose and such exchange shall be without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute, and the Trustee shall authenticate and make available for delivery in exchange therefor, one or more definitive Securities representing an equal principal amount of Securities. Until so exchanged, the Holder of temporary Securities shall in all respects be entitled to the same benefits under this Indenture as a holder of definitive Securities.

Section 2.12 Cancellation

The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and return to the Company upon its request therefor all Securities surrendered for registration of transfer, exchange, payment or cancellation. The Company may not issue new Securities to replace Securities it has paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

Section 2.13 Payment of Interest; Defaulted Interest

Interest on any Security which is payable, and is punctually paid or duly provided for, on any interest payment date shall be paid to the Person in whose name such Security (or one or more predecessor Securities) is registered at the close of business on the regular record date for such interest at the office or agency of the Company maintained for such purpose pursuant to Section 2.5.

Any interest on any Security which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days shall forthwith cease to be payable to the Holder on the regular record date by virtue of having been such Holder, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

(a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date (not less than 30 days after such notice) of the proposed

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payment (the “Special Interest Payment Date”), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date, and in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for in Section 12.2, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

(b)

The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

Section 2.14 Computation of Interest

Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months. Section 2.15 CUSIP Numbers

The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption or exchange as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption or exchange shall not be affected by any defect in or omission of such CUSIP numbers. The Company will promptly notify the Trustee of any change in the CUSIP numbers.

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ARTICLE III
COVENANTS

Section 3.1 Payment of Securities

The Company shall promptly pay the principal of, interest and premium, if any, on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal, interest and premium, if any, shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal, interest and premium, if any, then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

The Company shall pay interest on overdue principal, interest and premium, if any, at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder.

Section 3.2 Maintenance of Office or Agency

The Company shall maintain the office or agency required under Section 2.5. The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies (in or outside of The City of New York) where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in The City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

Section 3.3 SEC Reports and Available Information

The Company shall comply with all the applicable provisions of TIA § 314(a). Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

Section 3.4 Certificate to Trustee

(a) The Company shall deliver to the Trustee, within 45 days after the end of each fiscal quarter (120 days after the end of the last fiscal quarter of each year), an Officers’ Certificate stating whether or not the signers know of any Default or Event of Default that occurred during such fiscal year. In the case of the Officers’ Certificate delivered within 120 days after the end of the Company’s fiscal year, such certificate shall contain

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a certification from the principal executive officer, principal financial officer or principal accounting officer of the Company that a review has been conducted of the activities of the Company and its Restricted Subsidiaries and the Company’s and its Restricted Subsidiaries’ performance under this Indenture and that the Company has complied with all conditions and covenants under this Indenture. For purposes of this Section 3.4, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. If any of the Officers signing such certificate has knowledge of such a Default or Event of Default, the certificate shall describe any such Default or Event of Default and its status. The first certificate to be delivered pursuant to this Section 3.4(a) shall be for the first fiscal quarter beginning after the execution of this Indenture.

(b)

The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year, beginning with the fiscal year in which this Indenture was executed, a certificate signed by the Company’s independent certified public accountants stating (i) that their audit examination has included a review of the terms of this Indenture and the Securities as they relate to accounting matters, (ii) that they have read the most recent Officers’ Certificate delivered to the Trustee pursuant to paragraph (a) of this Section 3.4 and (iii) whether, in connection with their audit examination, anything came to their attention that caused them to believe that the Company was not in compliance with any of the terms, covenants, provisions or conditions of Article 3 and Article 4 of this Indenture as they pertain to accounting matters and, if any Default or Event of Default has come to their attention, specifying the nature and period of existence thereof; provided that such independent certified public accountants shall not be liable in respect of such statement by reason of any failure to obtain knowledge of any such Default or Event of Default that would not be disclosed in the course of an audit examination conducted in accordance with generally accepted auditing standards in effect at the date of such examination.

Section 3.5 Negative Pledge

(a) The Company will not, and will not permit any Restricted Subsidiary to:

(i)

mortgage or pledge as security for any indebtedness any Principal Property of the Company or a Restricted Subsidiary, whether such Principal Property is owned at the date of this Indenture or hereafter acquired, unless the Company secures or causes such Restricted Subsidiary to secure the outstanding Securities equally and ratably with all indebtedness secured by such mortgage or pledge, so long as such indebtedness shall be so secured;

(ii)

mortgage or pledge as security for any indebtedness any shares of stock, indebtedness or other obligations of RJRT, unless the Company pledges or secures or causes such Restricted Subsidiary to pledge or secure (x) such shares of stock, indebtedness or other obligations of RJRT to the Company equally and ratably with all indebtedness secured by such mortgage or pledge, so long as such indebtedness shall be so secured and assign the Company’s security interest in such assets to the Collateral Agent to secure the outstanding Securities equally and ratably with all indebtedness secured by such mortgage or pledge, so long as such indebtedness shall be so secured, or (y) the

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outstanding Securities equally and ratably with all indebtedness secured with such mortgage or pledge, so long as such indebtedness shall be so secured;

(iii)

mortgage or pledge as security for any public bonds or notes any shares of stock, indebtedness or other obligations of a Subsidiary (other than that of RJRT) held by or owed to any of the Company or such Restricted Subsidiary, whether such shares of stock, indebtedness or other obligations are owned at the date of this Indenture or hereafter acquired, unless the Company secures or causes such Restricted Subsidiary to secure the outstanding Securities equally and ratably with all such public bonds or notes secured by such mortgage or pledge, so long as such public bonds or notes shall be so secured;

provided, however, that this covenant shall not apply in the case of:

(A)	the creation of any mortgage, pledge or other lien on any shares of stock, indebtedness or other obligations of a Subsidiary or any Principal Property hereafter acquired (including acquisitions by way of merger or consolidation) by the Company or a Restricted Subsidiary contemporaneously with such acquisition, or within 120 days thereafter, to secure or provide for the payment or financing of any part of the purchase price thereof, or the assumption of any mortgage, pledge or other lien upon any shares of stock, indebtedness or other obligations of a Subsidiary or any Principal Property acquired hereafter existing at the time of such acquisition, or the acquisition of any shares of stock, indebtedness or other obligations of a Subsidiary or any Principal Property subject to any mortgage, pledge or other lien without the assumption thereof, provided that every such mortgage, pledge or lien referred to in this clause (A) shall attach only to the shares of stock, indebtedness or other obligations of a Subsidiary or any Principal Property so acquired and fixed improvements thereon;
(B)	any mortgage, pledge or other lien on any shares of stock, indebtedness or other obligations of a Subsidiary or any Principal Property existing at the date of this Indenture;
(C)	any mortgage, pledge or other lien on any shares of stock, indebtedness or other obligations of a Subsidiary or any Principal Property in favor of the Company or any Restricted Subsidiary;
(D)	any mortgage, pledge or other lien on Principal Property being constructed or improved securing loans to finance such construction or improvements;
(E)	any mortgage, pledge or other lien on shares of stock, indebtedness or other obligations of a Subsidiary or any Principal Property incurred in connection with the issuance of tax-exempt governmental obligations; or
(F)	any renewal of or substitution for any mortgage, pledge or other lien permitted by any of the preceding clauses (A) through (E), provided, that in the case of a mortgage, pledge or other lien permitted under clause

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(B), (C) or (E), the debt secured is not increased nor the lien extended to any additional assets.

(b) Notwithstanding the provisions of paragraph (a) of this Section, the Company or any Restricted Subsidiary may create or assume liens in addition to those permitted by paragraph (a) of this Section, and renew, extend or replace such liens, provided, that at the time of such creation, assumption, renewal, extension or replacement, and after giving effect thereto, Exempted Debt does not exceed 10% of Consolidated Net Worth.

Section 3.6 Certain Sale and Lease-back Transactions

(a) The Company will not, and will not permit any Restricted Subsidiary to, sell or transfer, directly or indirectly, except to the Company or a Restricted Subsidiary, any Principal Property as an entirety, or any substantial portion thereof, with the intention of taking back a lease of such property, except a lease for a period of three years or less at the end of which it is intended that the use of such property by the lessee will be discontinued; provided, that the Company or any Restricted Subsidiary may sell any such Principal Property and lease it back for a longer period if (i) the Company or such Restricted Subsidiary would be entitled, pursuant to the provisions of Section 3.5(a), to create a mortgage on the property to be leased securing Funded Debt in an amount equal to the Attributable Debt with respect to such sale and lease-back transaction without equally and ratably securing the outstanding Securities or (ii) (A) the Company promptly informs the Trustee of such transaction, (B) the net proceeds of such transaction are at least equal to the fair value (as determined by Board Resolution of the Company) of such property and (C) the Company causes an amount equal to the net proceeds of the sale to be applied to the retirement, within 120 days after receipt of such proceeds, of Funded Debt incurred or assumed by the Company or a Restricted Subsidiary (including the Securities); provided further, that in lieu of applying all of or any part of such net proceeds to such retirement, the Company may, within 75 days after such sale, deliver or cause to be delivered to the applicable trustee for cancellation either debentures or notes evidencing Funded Debt of the Company (which may include the outstanding Securities) or of a Restricted Subsidiary previously authenticated and delivered by the applicable trustee, and not theretofore tendered for sinking fund purposes or called for a sinking fund or otherwise applied as a credit against an obligation to redeem or retire such notes or debentures, and an Officers’ Certificate (which Certificate shall be delivered to the Trustee and each paying agent and which need not contain the statements prescribed by the second paragraph of Section 12.5) stating that the Company elects to deliver or cause to be delivered such debentures or notes in lieu of retiring Funded Debt as hereinabove provided. If the Company shall so deliver debentures or notes to the applicable trustee and the Company shall duly deliver such Officers’ Certificate, the amount of cash which the Company shall be required to apply to the retirement of Funded Debt under this Section 3.6(a) shall be reduced by an amount equal to the aggregate of the then applicable optional redemption prices (not including any optional sinking fund redemption prices) of such debentures or notes, or, if there are no such redemption prices, the principal amount of such debentures or notes; provided, that in the case of debentures or notes which provide for an amount less than the principal amount thereof to be due and payable upon a declaration of the maturity thereof, such amount of cash shall be reduced by the amount of principal of such

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debentures or notes that would be due and payable as of the date of such application upon a declaration of acceleration of the maturity thereof pursuant to the terms of the indenture pursuant to which such debentures or notes were issued.

(b)

Notwithstanding the provisions of paragraph (a) of this Section 3.6, the Company or any Restricted Subsidiary may enter into sale and lease-back transactions in addition to those permitted by paragraph (a) of this Section 3.6 and without any obligation to retire any outstanding Securities or other Funded Debt, provided, that at the time of entering into such sale and lease-back transactions and after giving effect thereto, Exempted Debt does not exceed 10% of Consolidated Net Worth.

Section 3.7 Corporate Existence

Subject to Article 4 and Section 10.2, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and that of each Restricted Subsidiary and the corporate rights (charter and statutory) licenses and franchises of the Company and each Restricted Subsidiary; provided, however, that the Company shall not be required to preserve any such existence (except the Company), right, license or franchise if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not, and will not be, disadvantageous in any material respect to the Holders, and provided, further, the Company or any Guarantor, as the case may be, may merge in accordance with Sections 4.1 and 10.2.

Section 3.8 Payment of Taxes and Other Claims

The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary and (ii) all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a material liability or lien upon the property of the Company or any Restricted Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of management of the Company), are being maintained in accordance with GAAP or where the failure to effect such payment will not be disadvantageous to the Holders.

Section 3.9 Waiver of Stay, Extension or Usury Laws

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of, premium, if any, or interest on the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

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Section 3.10 Further Instruments and Acts

Upon request of the Trustee or as necessary, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

Section 3.11 Notice of Defaults

In the event that any Officer becomes aware of any Default or Event of Default, the Company shall promptly (and in any event within five Business Days) deliver to a Responsible Officer of the Trustee an Officers’ Certificate specifying such Default or Event of Default.

Section 3.12 RJR Indebtedness

The Company will not permit RJR, at any time that RJR is not a Guarantor, to create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to any indebtedness to Persons other than the Company or any of the Guarantors (excluding accounts payable) other than the Securities, outstanding obligations of RJR as of the date of this Indenture and the Bank Credit Agreement.

ARTICLE IV
CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 4.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions

Nothing contained in this Indenture or in any of the Securities or Guarantees shall prevent any consolidation or merger of the Company into any other corporation or corporations (whether or not affiliated with the Company), or successive consolidations or mergers to which the Company or its successor shall be a party, or shall prevent any sale, lease or conveyance of the property of the Company, as an entirety or substantially as an entirety; provided, that upon any such consolidation, merger, sale, lease or conveyance to which the Company is a party and in which the Company is not the surviving corporation, the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Company and the due and punctual payment of the principal of, interest and premium, if any, on all of the Securities, according to their tenor, shall be expressly assumed by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the corporation formed by such consolidation, or into which the Company shall have been merged, or which shall have acquired such property.

Section 4.2 Successor Corporation Substituted

In case of any such consolidation, merger, sale or conveyance, and following such an assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein. Such successor corporation may cause to be signed, and may issue either in its own name or in the name of the Company prior to such succession any or all of the Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor corporation instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the Officers to the Trustee for authentication, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All of the Securities so issued shall in all respects have the same legal rank

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and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof.

In case of any such consolidation, merger, sale, lease or conveyance such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

In the event of any such sale or conveyance (other than a conveyance by way of lease) the Company or any successor corporation which shall theretofore have become such in the manner described in this Article shall be discharged from all obligations and covenants under this Indenture and the Securities and may be liquidated and dissolved.

Section 4.3 Opinion of Counsel to Trustee

The Trustee, subject to the provisions of Sections 7.1 and 7.2, shall be provided with an Opinion of Counsel, prepared in accordance with Section 12.4, as conclusive evidence that any such consolidation, merger, sale, lease or conveyance, and any such assumption, and any such liquidation or dissolution, complies with the applicable provisions of this Indenture.

ARTICLE V
REDEMPTION OF SECURITIES

Section 5.1 Applicability of Article

The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.3 for Securities of such series.

Section 5.2 Selection of Securities to Be Redeemed

If fewer than all the Securities of a series are to be redeemed, the Trustee shall select the Securities (not more than 60 days prior to the redemption date) to be redeemed in such manner that the Trustee considers to be fair and appropriate and in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances. The Trustee shall make the selection from outstanding Securities not previously called for redemption. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company of the Securities or portions of Securities to be redeemed.

Section 5.3 Exclusion of Certain Securities from Eligibility for Selection for Redemption

Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in a written statement signed by an authorized Officer and delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Company or (b) an entity specifically identified in such written statement directly or indirectly controlling or controlled by or under direct or indirect common control with the Company.

Section 5.4 Notice of Redemption

At least 30 days but not more than 60 days before a date for redemption of Securities, notice of redemption shall be mailed by first-class mail to each Holder of Securities to be redeemed.

The notice shall identify the Securities (including the CUSIP numbers) to be redeemed and shall state:

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(a)	the redemption date;
(b)	the redemption price (or the method of calculating such price) and the amount of accrued interest to be paid, if any;
(c)	the name and address of the Paying Agent;
(d)	that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price plus accrued and unpaid interest, if any;
(e)	if fewer than all the outstanding Securities are to be redeemed, the Bond No. (if certificated) and principal amounts of the particular Securities to be redeemed;
(f)	that, unless the Company defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(g)	the CUSIP number, if any, printed on the Securities being redeemed; and
(h)	that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities.

At the Company’s request, the Trustee shall give the notice of redemption in the name of the Company and at the Company’s expense. In such event, the Company shall provide the Trustee with the information required by this Section 5.4.

Section 5.5 Effect of Notice of Redemption

Once notice of redemption is mailed in accordance with Section 5.4, Securities called for redemption shall become due and payable on the redemption date and at the redemption price as stated in the notice. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

Section 5.6 Deposit of Redemption Price

By no later than 10:00 a.m. (New York City time) on the date of redemption, the Company shall deposit with the Paying Agent (or, if the Company or any of its respective Subsidiaries is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued and unpaid interest on all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption which are owned by the Company or a Subsidiary and have been delivered by the Company or such Subsidiary to the Trustee for cancellation.

Section 5.7 Securities Payable on Redemption Date

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified (together with accrued interest, if any, to the redemption date), and from and after such date (unless the Company shall default in the payment of the redemption price and accrued interest) such Securities shall cease to bear such interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the redemption price, together with accrued interest, if any, to the redemption date (subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant interest payment date.)

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If any Security called for redemption shall not be so paid upon surrender thereof for redemption because of the Company’s failure to deposit money sufficient to pay the redemption price of and accrued and unpaid interest on all Securities to be redeemed, the principal (and premium, if any) shall, until paid, bear interest from the redemption date at the rate borne by the Securities.

Section 5.8 Securities Redeemed in Part

Any Securities which are to be redeemed only in part (pursuant to the provision of this Article) shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 3.2 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security at the expense of the Company, a new Security or Securities, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered, provided, that each such new Security will be in a principal amount of $2,000 or integral multiples of $1,000 in excess thereof.

Section 5.9 Mandatory and Optional Sinking Funds

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment.” The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date.”

In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Company may at its option (a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Company or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Company and delivered to the Trustee for cancellation pursuant to Section 2.12, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Company through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption price specified in such Securities.

On or before the sixtieth day next preceding each sinking fund payment date for any series, the Company will deliver to the Trustee a written statement (which need not contain the statements required by Section 12.5) signed by an authorized Officer (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of Securities of such series, (b) stating that none of the Securities of such series has theretofore been so credited, (c) stating that no Defaults in the payment of interest or Events of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Company intends to exercise its right to make an optional sinking fund payment with respect to such series and, if so, specifying the amount of such optional sinking fund payment which the Company intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required to be delivered to the Trustee in order for the Company to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the

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Trustee shall be delivered for cancellation pursuant to Section 2.12 to the Trustee with such written statement (or reasonably promptly thereafter if acceptable to the Trustee). Such written statement shall be irrevocable and upon its receipt by the Trustee the Company shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Company, on or before any such sixtieth day, to deliver such written statement and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Company (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Company will make no optional sinking fund payment with respect to such series as provided in this Section.

If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or a lesser sum if the Company shall so request) with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption.

If such amount shall be $50,000 or less and the Company makes no such request then it shall be carried over until a sum in excess of $50,000 is available. The Trustee shall select, in the manner provided in Section 5.2, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to absorb said cash, as nearly as may be, and shall (if requested in writing by the Company) inform the Company of the serial numbers of the Securities of such series (or portions thereof) so selected. Securities of any series which are (a) owned by the Company or an entity known by the Trustee to be directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, as shown by the Security Register, and not known to the Trustee to have been pledged or hypothecated by the Company or any such entity or (b) identified in an Officers’ Certificate at least 60 days prior to the sinking fund payment date as being beneficially owned by, and not pledged or hypothecated by, the Company or an entity directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be excluded from Securities of such series eligible for selection for redemption. The Trustee, in the name and at the expense of the Company (or the Company, if it shall so request the Trustee in writing) shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 5.2 (and with the effect provided in Section 5.5) for the redemption of Securities of such series in part at the option of the Company. The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series at maturity.

At least one Business Day before each sinking fund payment date, the Company shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date.

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The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund moneys or mail any notice of redemption of Securities for such series by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided, that it shall have received from the Company a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such Default or Event of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such Default or Event of Default, be deemed to have been collected under Article 6 and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 6.10 or the Default cured on or before the sixtieth day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this section to the redemption of such Securities.

ARTICLE VI
DEFAULTS AND REMEDIES

Section 6.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default

“Event of Default” with respect to Securities of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a)	default in the payment of any installment of interest upon any of the Securities of such series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or
(b)	default in the payment of all or any part of the principal on any of the Securities of such series as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise; or
(c)	default in the payment of any sinking fund installment as and when the same shall become due and payable by the terms of the Securities of such series; or
(d)	default in the performance, or breach, of any covenant or agreement of the Company or the Guarantors in respect of the Securities of such series (other than a covenant or agreement in respect of the Securities of such series a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by first class mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the outstanding Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or
(e)	a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or the Guarantors in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar

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	official) of the Company or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or
(f)	the Company or any Restricted Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for any substantial part of its property, or make any general assignment for the benefit of creditors; or
(g)	any Guarantee ceases to be in full force and effect (except as contemplated by the terms hereof), or any Guarantee is declared in a judicial proceeding to be null and void, or any Guarantor denies or disaffirms in writing its obligations under the terms of this Indenture or its Guarantee; or
(h)	At any time as such security is required by the terms hereof, any Security Document shall cease to be in full force and effect or shall cease to give the Collateral Agent the liens or any of the material rights, powers and privileges purported to be created thereby in favor of the Collateral Agent and such default shall continue unremedied for a period of at least 30 days after written notice to the Company by the Collateral Agent; or
(i)	any other Event of Default provided in the supplemental indenture or Board Resolution under which such series of Securities is issued or in the form of Security for such series.

If an Event of Default described in clauses (a), (b), (c), (d) or (i) above (if the Event of Default under clause (d) or (i) is with respect to less than all series of Securities then outstanding) occurs and is continuing, then, and in each and every such case, except for any series of Securities the principal of which shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of each such affected series then outstanding hereunder (voting as a single class) by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all Securities of all such affected series, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default described in clauses (d) or (i) (if the Event of Default under clause (d) or (i), as the case may be, is with respect to all series of Securities then outstanding), (e), (f), (g) or (h) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then outstanding hereunder (treated as one class), by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all the Securities then outstanding and interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.

The foregoing provisions, however, are subject to the condition that if, at any time after the principal of the Securities of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Company or any Guarantor shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the

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Securities of each such series (or of all the Securities, as the case may be) and the principal of any and all Securities of each such series (or of all the Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the same rate as the rate of interest specified in the Securities of each such series to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of gross negligence or willful misconduct, and if any and all Events of Default under the Indenture, other than the non-payment of the principal of Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein, then and in every such case the Holders of a majority in aggregate principal amount of all the Securities of each such series, or of all the Securities, in each case voting as a single class, then outstanding, by written notice to the Company and to the Trustee, may waive all defaults with respect to each such series (or with respect to all the Securities, as the case may be) and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.

Section 6.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt

The Company covenants that (a) in case default shall be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall have continued for a period of 30 days or (b) in case default shall be made in the payment of all or any part of the principal of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities of such series or upon any redemption, repurchase or by declaration or otherwise, then upon demand of the Trustee, the Company or any Guarantor will pay to the Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities of such series for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest at the same rate as the rate of interest specified in the Securities of such series); and in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and any reasonable expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of its negligence or bad faith.

Until such demand is made by the Trustee, the Company or any Guarantor may pay the principal of and interest on the Securities of any series to the Holders, whether or not the principal of and interest on the Securities of such series be overdue.

In case the Company or the Guarantors shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Securities and collect in the manner provided by law out of the property of the Company or other obligor upon the Securities, wherever situated, the moneys adjudged or decreed to be payable.

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In case there shall be pending proceedings relative to the Company or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or its property or such other obligor, or in case of any other comparable judicial proceedings relative to the Company or other obligor upon the Securities, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:

(i)	to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Securities, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of gross negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Company or other obligor upon the Securities or to the creditors or property of the Company or such other obligor,
(ii)	unless prohibited by applicable law and regulations, to vote on behalf of the Holders of the Securities of any series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and
(iii)	to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of gross negligence or bad faith.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person.

All rights of action and of asserting claims under this Indenture, or under any of the Securities of any series, may be enforced by the Trustee without the possession of any of the Securities of such series

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appertaining to such Securities or the production thereof at any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of such Securities in respect of which such action was taken.

In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Securities or in respect of which such action was taken, and it shall not be necessary to make any Holders of such Securities parties to any such proceedings.

Section 6.3 Application of Proceeds

Any moneys collected by the Trustee pursuant to this Article in respect of any series of Securities shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation of the several Securities in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid:

FIRST: To the payment of costs and expenses applicable to such series in respect of which monies have been collected, including reasonable compensation to the Trustee and each predecessor Trustee and their respective agents and attorneys and of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee and their respective agents and attorneys except as a result of negligence or bad faith;

SECOND: In case the principal of the Securities of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate of interest specified in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference;

THIRD: In case the principal of the Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the same rate as the rate of interest specified in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest; and

FOURTH: To the payment of the remainder, if any, to the Company.

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Section 6.4 Suits for Enforcement

In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem necessary to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

Section 6.5 Restoration of Rights on Abandonment of Proceedings

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Company, the Guarantors, and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company, the Guarantors, the Trustee and the Securityholders shall continue as though no such proceedings had been taken.

Section 6.6 Limitations on Suits by Securityholders

No Holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless such Holder previously shall have given to a Responsible Officer of the Trustee written notice of default and of the continuance thereof, as herein provided, and unless also the Holders of not less than 25% in aggregate principal amount of the Securities of each affected series then outstanding (treated as a single class) shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and shall have offered to the Trustee such reasonable security or indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 6.9; it being understood and intended, and being expressly covenanted by the taker and Holder of every Security with every other taker and Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

Section 6.7 Unconditional Right of Securityholders to Institute Certain Suits

Notwithstanding any other provision in this Indenture and any provision of any Security, the right of any Holder of any Security to receive payment of the principal of, premium, if any, and interest on such Security on or after the respective due dates expressed in such Security, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

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Section 6.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default

Except as provided in Section 6.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

No delay or omission of the Trustee or of any Holder of Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and, subject to Section 6.6, every power and remedy given by this Indenture or by law to the Trustee or to the Holders of Securities may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities.

Section 6.9 Control by Securityholders

The Holders of a majority in aggregate principal amount of the Securities of each series affected (with each such series voting as a separate class) at the time outstanding shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Securities of such series by this Indenture; provided, that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided, further, that (subject to the provisions of Section 7.1) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith, or a trust committee or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions or forebearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the giving of said direction, it being understood that (subject to Section 7.1) the Trustee shall have no duty to ascertain whether or not such actions or forebearances are unduly prejudicial to such Holders.

Nothing in this Indenture shall impair the right of the Trustee to take any action deemed proper by the Trustee and which is not inconsistent with such direction or directions by Securityholders.

Section 6.10 Waiver of Past Defaults

Prior to the acceleration of the maturity of the Securities as provided in Section 6.1, the Holders of a majority in aggregate principal amount of the Securities of all series at the time outstanding with respect to which an Event of Default shall have occurred and be continuing (voting as a single class) may on behalf of the Holders of all such Securities waive any past Default or Event of Default described in Section 6.1 and its consequences, except a Default in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Security affected. In the case of any such waiver, the Company, the Guarantors, the Trustee and the Holders of all such Securities of each series affected shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

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Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

Section 6.11 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances

The Trustee shall, within 90 days after the occurrence of a Default with respect to the Securities of any series, give notice of all Defaults with respect to that series actually known to a Responsible Officer of the Trustee and to all Holders of Securities of such series in the manner and to the extent provided in Section 313(c) of the TIA, unless in each case such Defaults shall have been cured before the mailing or publication of such notice; provided, that, except in the case of Default in the payment of the principal of or interest on any of the Securities of such series, or in the payment of any sinking fund installment on such series, the Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series.

Section 6.12 Right of Court to Require Filing of Undertaking to Pay Costs

All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to:

(a)	any suit instituted by the Trustee,
(b)	any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series, or, in the case of any suit relating to or arising under clauses (d) or (i) of Section 6.1 (if the suit relates to Securities of more than one but less than all series), 10% in aggregate principal amount of Securities outstanding affected thereby, or in the case of any suit relating to or arising under clauses (d) or (i) (if the suit under (d) or (i) relates to all the Securities then outstanding), (c), (e), (f), (g) or (h) of Section 6.1, 10% in aggregate principal amount of all Securities outstanding, or
(c)	any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest on any Security on or after the due date expressed in such Security or any date fixed for redemption.

ARTICLE VII
TRUSTEE

Section 7.1 Duties of Trustee

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and

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skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs; provided, that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security satisfactory to the Trustee against loss, liability or expense.

(b)

Except during the continuance of an Event of Default:

(i)

the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii)

in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon Officers’ Certificates and Opinions of Counsel furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such Officers’ Certificates and Opinions of Counsel which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officers’ Certificates and Opinions of Counsel to determine whether or not they substantially conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i)	this paragraph does not limit the effect of paragraph (b) of this Section 7.1;
(ii)	the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii)	the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.9.

(d)	Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.1.
(e)	The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.
(f)	Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g)	No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

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(h)	Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.1 and to the provisions of the TIA.
(i)	Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer.
(j)	The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to the Trustee against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction.

Section 7.2 Rights of Trustee

(a)	The Trustee may conclusively rely on any document (whether in its original, electronic or facsimile form) believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.
(b)	Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.
(c)	The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.
(d)	The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee’s conduct does not constitute willful misconduct or negligence.
(e)	The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f)	The Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Securities unless either (i) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (ii) written notice of such Default or Event of Default shall have been given to a Responsible Officer of the Trustee by the Company or any other obligor on the Securities or by any Holder of the Securities.
(g)	The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(h)	The Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any

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	person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.
(i)	In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

Section 7.3 Individual Rights of Trustee

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.

Section 7.4 Trustee’s Disclaimer

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities or any offering document, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

Section 7.5 Notice of Defaults

If a Default or an Event of Default occurs with respect to the Securities and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder notice of the Default within 90 days after it is known to a Trust Officer or written notice of it is received by a Trust Officer of the Trustee. Except in the case of a Default in payment of Principal of, premium, if any or interest on any Security (including payments pursuant to the optional redemption or required repurchase provisions of such Security, if any), the Trustee may withhold the notice if and so long as the Board of Directors, the executive committee, or a trust committee of directors or trustees and/or Responsible Officers of the Trustee in good faith determines that withholding the notice is not opposed to the interests of Securityholders.

Section 7.6 Reports by Trustee to Holders

As promptly as practicable after each May 15 beginning with the May 15 following the date of this Indenture, and in any event prior to July 15 in each year, the Trustee shall mail to each Securityholder a brief report dated as of such May 15 that complies with TIA § 313(a). The Trustee also shall comply with TIA § 313(b). The Trustee shall promptly deliver to the Company a copy of any report it delivers to Holders pursuant to this Section 7.6.

A copy of each report at the time of its mailing to Securityholders shall be filed by the Trustee with the SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof.

Section 7.7 Compensation and Indemnity

The Company and the Guarantors jointly and severally covenant and agree to pay to the Trustee from time to time such compensation for its services as the Company and the Trustee shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of

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a trustee of an express trust. The Company and the Guarantors shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it in accordance with the provisions of this Indenture, including costs of collection, costs of preparing and reviewing reports, certificates and other documents, costs of preparation and mailing of notices to Securityholders and reasonable fees and expenses of counsel retained by the Trustee in connection with the delivery of an Opinion of Counsel or otherwise, in addition to such compensation for its services, except any such expense, disbursement or advance as shall have been caused by its own negligence, willful misconduct or bad faith. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Trustee shall provide the Company reasonable notice of any expenditure not in the ordinary course of business; provided, that prior approval by the Company of any such expenditure shall not be a requirement for the making of such expenditure nor for reimbursement by the Company thereof. The Company and the Guarantors, jointly and severally, shall indemnify each of the Trustee, its officers, directors, employees and any predecessor Trustees against any and all loss, damage, claim, liability or expense (including reasonable attorneys’ fees and expenses) (other than taxes applicable to the Trustee’s compensation hereunder) incurred by it without negligence or bad faith on its part in connection with the acceptance or administration of this trust and the performance of its duties hereunder including the costs and expenses of enforcing this Indenture (including this Section 7.7) and of defending itself against any claims (whether asserted by any Securityholder, the Company or otherwise). The Trustee shall notify the Company promptly of any claim of which a Responsible Officer has received written notice for which it may seek indemnity. Failure by the Trustee so to notify the Company shall not relieve the Company and the Guarantors of each of its obligations hereunder, except to the extent that the Company and the Guarantors have been prejudiced by such failure. The Company and the Guarantors shall defend the claim and the Trustee may have separate counsel and the Company and the Guarantors shall pay the fees and expenses of such counsel. The Company and the Guarantors need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The Company and the Guarantors need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld or delayed.

To secure the payment obligations of the Company and the Guarantors in this Section 7.7, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay Principal of and interest on particular Securities.

The payment obligations of the Company and the Guarantors pursuant to this Section 7.7 shall survive the resignation or removal of the Trustee and any discharge of this Indenture including any discharge under any Bankruptcy Law. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.1(e) or (f), the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

Section 7.8 Replacement of Trustee

The Trustee may resign at any time with 30 days notice to the Company. The Holders of a majority in principal amount of the Securities then outstanding, may remove the Trustee with 30 days notice to the Trustee and may appoint a successor Trustee, which successor Trustee shall be reasonably acceptable to the Company. The Company shall remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10;

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(b)	the Trustee is adjudged bankrupt or insolvent;
(c)	a receiver or other public officer takes charge of the Trustee or its property; or
(d)	the Trustee otherwise becomes incapable of acting.

If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee. Such retiring trustee must receive all funds owed to it prior to the completion of such resignation.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company and the Company or the Guarantors shall pay all amounts due and owing to the Trustee under Section 7.7. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders affected by such resignation or removal. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.7.

If a successor Trustee does not take office with respect to the Securities within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in aggregate principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee at the expense of the Company.

If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section 7.8, each of the Company’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee.

Section 7.9 Successor Trustee by Merger

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee, provided, that such corporation shall be eligible under this Article 7 and TIA Section 3.10(a).

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.

Section 7.10 Eligibility; Disqualification

The Trustee shall at all times satisfy the requirements of TIA § 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA § 310(b); provided, however, that there shall be

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excluded from the operation of TIA § 310(b)(1) and any indenture or indentures under which other securities or certificates of interest or participation in other securities of either Company are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

Section 7.11 Preferential Collection of Claims Against the Company

The Trustee shall comply with § TIA 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

ARTICLE VIII
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS

Section 8.1 Satisfaction and Discharge of Indenture

If at any time

(a)	the Company or any Guarantor shall have paid or caused to be paid the principal of, premium, if any, and interest on all the Securities of any series outstanding hereunder (other than Securities of such series which have been mutilated, defaced, destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.8) as and when the same shall have become due and payable; or
(b)	the Company shall have delivered to the Trustee for cancellation all Securities of any series theretofore authenticated (other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.8); or
(c)	in the case of any series of Securities where the exact amount (including the currency of payment) of principal of, premium, if any, and interest due on which can be determined at the time of making the deposit referred to in clause (B) below, (A) all the Securities of such series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (B) the Company or any Guarantor shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any Paying Agent to the Company in accordance with Section 8.5) or, in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations, maturing as to principal and interest at such times and in such amounts as will insure the availability of cash, or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (X) the principal, premium, if any, and interest on all Securities of such series on each date that such principal, premium, if any, or interest is due and payable and (Y) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series; and if, in any such case, the Company or any Guarantor shall also pay or cause to be paid all other sums payable hereunder by the Company;

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then this Indenture shall cease to be of further effect (except as to (1) rights of registration of transfer and exchange of Securities of such series and the Company’s right of optional redemption, if any, (2) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (3) rights of Holders of Securities to receive payments of principal thereof, premium, if any, and interest thereon, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive mandatory sinking fund payments, if any, (4) the rights, obligations, duties and immunities of the Trustee hereunder, (5) the rights of the Holders of Securities of such as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, and (6) the obligations of the Company under Section 2.5) and the Trustee, on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel which comply with Section 12.4 and at the cost and expense of the Company, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture; provided, that the rights of Holders of the Securities to receive amounts in respect of principal of, premium, if any, and interest on the Securities held by them shall not be delayed longer than required by then-applicable mandatory rules or policies of any securities exchange upon which the Securities are listed.

The Company and the Guarantors agree to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company and the Guarantors to the Trustee under Section 7.7 and the obligations of the Trustee under Section 8.1 shall survive such satisfaction and discharge.

Section 8.2 Defeasance

(a) In addition to discharge of the Indenture pursuant to Section 8.1, in the case of any series of Securities the exact amounts (including the currency of payment) of principal of and interest due on which can be determined at the time of making the deposit referred to in clause (i) below, the Company and the Guarantors shall be deemed to have paid and discharged the entire indebtedness on all the Securities and the Guarantees of such a series on the 91st day after the date of the deposit referred to in subparagraph (i) below, and the provisions of this Indenture with respect to the Securities of such series and the Guarantees shall no longer be in effect (except as to (1) rights of registration of transfer and exchange of Securities of such series and the Company’s right of optional redemption, if any, (2) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (3) rights of Holders of Securities to receive payments of principal thereof, premium, if any, and interest thereon, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive mandatory sinking fund payments, if any, (4) the rights, obligations, duties and immunities of the Trustee hereunder, (5) the rights of the Holders of Securities of such series as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them and (6) the obligations of the Company under Section 2.5) and the Trustee, at the expense of the Company and the Guarantors, shall at the Company’s request, execute proper instruments acknowledging the same, if

(i) with reference to this provision the Company or any Guarantor has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit

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	of the Holders of the Securities of such series (1) cash in an amount, or (2) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations, maturing as to principal and interest at such times and in such amounts as will insure the availability of cash or (3) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (x) the principal, premium, if any, and interest on all Securities of such series on each date that such principal, premium, if any, or interest is due and payable and (y) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series;
(ii)	such deposit will not result in a breach or violation of, or constitute a default under, any agreement or instrument to which the Company or any Guarantor is a party or by which it is bound;
(iii)	the Company has delivered to the Trustee an Opinion of Counsel based on the fact that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date hereof, there has been a change in the applicable Federal income tax law, in either case to the effect that, and such opinion shall confirm that, the Holders of the Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; and
(iv)	the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this provision have been complied with.

(b) The Company and the Guarantors shall be released from each of their obligations with respect to the Securities of any series outstanding (except for: (i) the obligations set forth as exceptions above in Section 8.2(a); (ii) the obligations to (w) compensate and indemnify the Trustee, (x) appoint a successor Trustee, (y) repay certain moneys held by the Paying Agent and (z) return certain unclaimed moneys held by the Trustee; and (iii) such obligations of the Company and the Guarantors as are required by the TIA) on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect to the outstanding Securities of any series, the Company and the Guarantors are required only to comply with the above obligations and shall have no liability in respect of any term, condition or limitation set forth in any other Section, whether directly or indirectly by reason of any reference to such Section by any other remaining provision or in any other document and such compliance only to the above obligations shall not constitute an Event of Default under Section 6.1. The following shall be the conditions to application of this Section 8.2(b):

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(i)	The Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the Securities of such series, (A) cash in an amount, or (B) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations maturing as to principal and interest at such times and in such amounts as will insure the availability of cash or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (X) the principal, premium, if any, and interest on all Securities of such series and (Y) any mandatory sinking fund payments on the day on which such payments are due and payable in accordance with the terms of this Indenture and the Securities of such series.
(ii)	Such Covenant Defeasance shall not cause the Trustee to have a conflicting interest as set forth in Article 7 and for purposes of the TIA with respect to any securities of the Company.
(iii)	Such Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company or any Guarantor is a party or by which it is bound.
(iv)	The Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such Covenant Defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred.
(v)	The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the Covenant Defeasance contemplated by this provision have been complied with.

Section 8.3 Application by Trustee of Funds Deposited for Payment of Securities

Subject to Section 8.5, all moneys deposited with the Trustee pursuant to Section 8.1 or Section 8.2 shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to the Holders of the particular Securities of such series for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money need not be segregated from other funds except to the extent required by law.

Section 8.4 Repayment of Moneys Held by Paying Agent

In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys then held by any Paying Agent under the provisions of this Indenture with respect to such series of Securities shall, upon demand of the Company, be repaid to it or paid to the Trustee and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

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Section 8.5 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years

Any moneys or Government Obligations deposited with or paid to the Trustee or any Paying Agent for the payment of the principal of, premium, if any, or interest on any Security of any series and not applied but remaining unclaimed for two years after the date upon which such principal, premium, if any, or interest shall have become due and payable, shall, upon the written request of the Company and unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Company by the Trustee for such series or such Paying Agent, and the Holder of the Security of such series shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Company or the Guarantors for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any Paying Agent with respect to such moneys shall thereupon cease.

ARTICLE IX
AMENDMENTS

Section 9.1 Without Consent of Securityholders

The Company and the Guarantors, when authorized by a Board Resolution (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to a Company Order), and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:

(a)	to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of one or more series any property or assets;
(b)	to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company pursuant to Article 4;
(c)	to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection or benefit of the Holders of all or any series of Securities, (and if such covenants, restrictions, conditions or provisions are for the protection or benefit of less than all series of Securities, stating that they are expressly being included solely for the benefit or protection of such series), and to make the occurrence, or the occurrence and continuance, of a Default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after Default (which period may be shorter or longer than that allowed in the case of other Defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such an Event of Default;
(d)	to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other

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	provision contained herein or in any supplemental indenture; or to make such other provisions in regard to matters or questions arising under this Indenture or under any supplemental indenture as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Securities in any material respect;
(e)	to establish the form or forms or terms of Securities of any series as permitted by Sections 2.1 and 2.3;
(f)	to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article 7;
(g)	to provide for uncertificated Securities and to make all appropriate changes for such purpose;
(h)	to comply with the requirements of the TIA; and
(i)	to add additional Guarantors with respect to the Securities.

The Trustee is hereby authorized to join with the Company and the Guarantors in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Any supplemental indenture authorized by the provisions of this Section may be executed without the consent of the Holders of any of the Securities at the time outstanding, notwithstanding any of the provisions of Section 9.2.

Section 9.2 With Consent of Securityholders

With the consent of the Holders of not less than a majority in aggregate principal amount of the Securities at the time outstanding of all series affected by such supplemental indenture (voting as one class), the Company and the Guarantors, each when authorized by a Board Resolution (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to a Company Order), and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities of each such series; provided, that no such supplemental indenture shall (a) extend the final maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or make the principal thereof, premium, if any, or interest thereon, payable in any coin or currency other than that provided in the Securities or in accordance with the terms thereof, reduce the premium, if any, that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 6.1 or the amount thereof provable in bankruptcy pursuant to Section 6.2, or impair or affect the right of any Securityholder to institute suit for the payment thereof or, if the Securities provide

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therefor, any right of repayment at the option of the Securityholder in each case without the consent of the Holder of each Security so affected, or (b) reduce the aforesaid percentage in principal amount of Securities of any series, the consent of the Holders of which is required for any such supplemental indenture, without the consent of the Holders of each Security so affected.

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of Holders of Securities with respect to such covenant or provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

Upon the request of the Company and the Guarantors, accompanied by a copy of a Board Resolution (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to a Company Order) certified by the secretary or an assistant secretary of the Company and the Guarantors authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders as aforesaid and other documents, if any, required by Sections 7.1 and 9.4, the Trustee shall join with the Company and the Guarantors in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

It shall not be necessary for the consent of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

Promptly after the execution by the Company, the Guarantors and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall give notice thereof to the Holders of then outstanding Securities of each series affected thereby, by mailing a notice thereof by first class mail to such Holders at their addresses as they shall appear on the Security Register and in each case such notice shall set forth in general terms the substance of such supplemental indenture. Any failure of the Company to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

Section 9.3 Effect of Supplemental Indenture

Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company, the Guarantors and the Holders of Securities of each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.4 Documents to Be Given to Trustee

The Trustee, subject to the provisions of Sections 7.1 and 7.2, shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 9 complies with the applicable provisions of this Indenture.

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Section 9.5 Notation on Securities in Respect of Supplemental Indentures

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental indenture. If the Company so determines, new Securities of any series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of such series then outstanding.

Section 9.6 Compliance with TIA

Every amendment to this Indenture or the Securities shall comply with the TIA as then in effect.

Section 9.7 Revocation and Effect of Consents and Waivers

A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, is shall bind every Security holder. An amendment or waiver shall become effective upon receipt by the Trustee of the requisite number of written consents under Section 9.1 or 9.2 as applicable.

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Noteholders entitled to give this consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall become valid or effective more than 120 days after such record date.

Section 9.8 Trustee to Sign Amendments

The Trustee shall sign any amendment authorized pursuant to this Article Nine if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall receive indemnity reasonably satisfactory to it and to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture and that such supplemental indenture constitutes the legal, valid and binding obligation of the Company and the Guarantors in accordance with its terms subject to customary exceptions.

ARTICLE X
GUARANTEES

Section 10.1 Guarantees

Each Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally with each other Guarantor, to each Holder of the Securities and

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the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption, by repurchase, or otherwise, of the principal of, premium, if any, and interest on the Securities and all other obligations of the Company under this Indenture (all the foregoing being hereinafter collectively called the “Obligations”). Each Guarantor further agrees (to the extent permitted by law) that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it will remain bound under this Article 10 notwithstanding any extension or renewal of any Obligation.

Each Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Securities or the Obligations. The obligations of each Guarantor hereunder shall not be affected by (a) the failure of any Holder to assert any claim or demand or to enforce any right or remedy against the Company or any other person under this Indenture, the Securities or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Obligations or any of them; (e) the failure of any Holder to exercise any right or remedy against any other Guarantor; or (f) any change in the ownership of the Company.

Each Guarantor further agrees that its Guarantee herein constitutes a Guarantee of payment when due (and not a Guarantee of collection) and waives any right to require that any resort be had by any Holder to any security held for payment of the Obligations.

The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder to assert any claim or demand or to enforce any remedy under this Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of such Guarantor as a matter of law or equity.

Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any of the Obligations is rescinded or must otherwise be restored by any Holder upon the bankruptcy or reorganization of the Company or otherwise.

In furtherance of the foregoing and not in limitation of any other right which any Holder has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Company to pay any of the Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption, by repurchase or otherwise, each Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid amount of such Obligations then due and owing and (ii) accrued and unpaid interest on such Obligations then due and owing (but only to the extent not prohibited by law).

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Each Guarantor further agrees that, as between such Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in this Indenture for the purposes of its Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby and (y) in the event of any such declaration of acceleration of such Obligations, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purposes of this Guarantee.

Each Guarantor also agrees to pay any and all reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or the Holders in enforcing any rights under this Section.

Section 10.2 Limitation on Liability; Termination, Release and Discharge

The obligations of each Guarantor hereunder will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor (including, without limitation, any guarantees under the Bank Credit Agreement) and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law.

Each Guarantor may consolidate with or merge into or sell its assets to the Company or another Guarantor without limitation. Each Guarantor may consolidate with or merge into or sell its assets to a Person other than the Company or another Guarantor (whether or not an Affiliate of the Guarantor), provided, that upon any such consolidation, merger or sale to which such Guarantor is a party, other than transactions in which such Guarantor is not the surviving corporation, the Obligations shall be expressly assumed by supplemental indenture executed and delivered to the Trustee, by the corporation formed by such consolidation, or into which such Guarantor shall have been merged, or which shall have acquired such property, provided, that such corporation is also a Bank Credit Agreement Guarantor, and such Guarantor will be deemed released from all its obligations under the Indenture and its Guarantee and such Guarantee will terminate. If a Guarantor ceases to be a Bank Credit Agreement Guarantor for any reason, such Guarantor will be deemed released from all of its obligations under the Indenture and its Guarantee of the Securities and such Guarantee will terminate.

Section 10.3 Right of Contribution

Each Guarantor hereby agrees that to the extent that any Guarantor shall have paid more than its proportionate share of any payment made on the obligations under the Guarantees, such Guarantor shall be entitled to seek and receive contribution from and against the Company or any other Guarantor who has not paid its proportionate share of such payment. The provisions of this Section 10.3 shall in no respect limit the obligations and liabilities of each Guarantor to the Trustee and the Holders and each Guarantor shall remain liable to the Trustee and the Holders for the full amount guaranteed by such Guarantor hereunder.

Section 10.4 No Subrogation

Notwithstanding any payment or payments made by each Guarantor hereunder, no Guarantor shall be entitled to be subrogated to any of the rights of the Trustee or any Holder against the Company or any other Guarantor or any collateral security or guarantee or right of offset held by the Trustee or any Holder for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Guarantor in respect of payments made

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by such Guarantor hereunder, until all amounts owing to the Trustee and the Holders by the Company on account of the Obligations are paid in full. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Trustee and the Holders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Trustee in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Trustee, if required), to be applied against the Obligations.

Section 10.5 Future Guarantors

After the date on which a Subsidiary other than RJR (whether previously existing or created or acquired by the Company) becomes a Bank Credit Agreement Guarantor, the Company will execute and deliver and cause such Subsidiary to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary will unconditionally guarantee, on a joint and several basis with the other Guarantors, the full and prompt payment of the principal of, premium, if any, and interest on the Securities on an unsecured and unsubordinated basis and become a party to this Indenture as a Guarantor for all purposes of the Indenture.

ARTICLE XI
SECURITY DOCUMENTS

Section 11.1 Security Documents

The due and punctual payment of the principal, of premium, if any, and interest on the Securities and the Guarantees when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest on the Securities and the Guarantees and performance of all other obligations of the Company and the Guarantors to the holders of Securities or the Trustee under this Indenture and the Securities, according to the terms hereunder or thereunder, are secured as provided in the Security Documents which the Company and certain of the Restricted Subsidiaries have entered into simultaneously with the execution of this Indenture. Each Holder of Securities, by its acceptance thereof, consents and agrees to the terms of the Security Documents (including, without limitation, the provisions providing for any foreclosure and release of Collateral) as the same may be in effect or may be amended from time to time in accordance with its terms and authorizes and directs the Collateral Agent to enter into the Security Documents and to perform its obligations and exercise its rights thereunder in accordance therewith. The Company shall deliver to the Trustee (if it is not itself then the Collateral Agent) copies of all documents delivered to the Collateral Agent pursuant to the Security Documents, and will do or cause to be done all such acts and things as may be required by the next sentence of this Section 11.1 to ensure and confirm to the Trustee and the Collateral Agent, the security interest in the Collateral contemplated hereby, by the Security Documents or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Securities and the Guarantees secured hereby, according to the intent and purposes herein expressed. The Company shall take any and all actions reasonably required to cause the Security Documents to create and maintain, as security for the obligations of the Company hereunder, a valid and enforceable perfected Lien in and on all of the Collateral, in favor of the applicable Collateral Agent for the benefit of the Holders of Securities, with such priority as provided for in the applicable Security Documents.

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Section 11.2 Recording and Opinions

(a) The Company shall furnish to the Trustee:

(1)	promptly after issuance of the Securities, an Opinion of Counsel that complies with TIA § 314(b)(1); and
(2)	at least annually thereafter, an Opinion of Counsel that complies with TIA § 314(b)(2).

(b) The Company will otherwise comply with any successor provisions to TIA § 314(b).

Section 11.3 Release of Collateral

(a)

Subject to subsection (b) in this Section 11.3 and to Section 3.5, any or all Liens granted under the Security Documents for the benefit of the Holders will automatically be released, without the necessity of any consent of the Trustee or any Holders, upon a release of such Lien or Liens pursuant to the terms of the Security Documents.

(b)

The release of any Collateral from the terms of this Indenture and the Security Documents shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral is released pursuant to the terms of the Security Documents and this Indenture. To the extent applicable, the Company will cause TIA § 313(b), relating to reports, and TIA § 314(d), relating to the release of property or securities from the Lien and security interest of the Security Documents and relating to the substitution therefor of any property or securities to be subjected to the Lien and security interest of the Security Documents, to be complied with. Any certificate or opinion required by TIA § 314(d) may be made by an Officer, as applicable, except in cases where TIA § 314(d) requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected by the Company.

Section 11.4 Certificates of the Trustee

In the event that the Collateral is released in accordance with the Security Documents at a time when the Trustee is not itself also the Collateral Agent and has delivered the certificates and documents required by the Security Documents and Section 11.3 hereof, the Trustee will acknowledge receipt of all such documentation.

Section 11.5 Authorization of Actions To Be Taken by the Trustee Under the Security Documents

Subject to the provisions of Section 7.1 and 7.2 hereof, the Trustee may, in its sole discretion and without the consent of the Holders of Securities, direct, on behalf of the Holders of Securities, the Collateral Agent to take all actions it deems necessary or appropriate in order to:

(1)	enforce any of the terms of the Security Documents; and
(2)	collect and receive any and all amounts payable in respect of the obligations of the Company and the Guarantors hereunder.

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Section 11.6 Authorization of Receipt of Funds by the Trustee Under the Security Documents

The Trustee is authorized to receive any funds for the benefit of the Holders of Securities distributed under the Security Documents, and to make further distributions of such funds to the Holders of Securities according to the provisions of this Indenture.

Section 11.7 Termination of Security Interest

The Trustee will, at the request of the Company, deliver a certificate to the Collateral Agent stating that all Obligations due in respect of the Securities have been paid in full, and instruct the Collateral Agent to release the Liens pursuant to this Indenture and the Security Documents upon (1) payment in full of the principal of, accrued and unpaid interest and premium, if any, on the Securities and all other Obligations under this Indenture, (2) a satisfaction and discharge of this Indenture as described in Section 8.1 hereof and (3) a defeasance as described in Section 8.2. Upon receipt of such instruction, the Collateral Agent shall execute, deliver or acknowledge any necessary or proper instruments of termination, satisfaction or release to evidence the release of all such Liens.

Section 11.8 Collateral Agent

(a)

None of the Collateral Agent or any of its officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent’s interests in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Collateral Agent nor any of its officers, directors, employees or agents shall be responsible for any act or failure to act hereunder, except for its own negligence or willful misconduct.

(b)

The Trustee, and the Collateral Agent, are each authorized and directed to (i) enter into the Security Documents, (ii) bind the Holders on the terms as set forth therein and (iii) perform and observe its obligations under the Security Documents.

Section 11.9 Suits to Protect the Collateral

Subject to the provisions of the Security Documents, the Trustee shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Security Documents or this Indenture, and such suits and proceedings as the Trustee may deem expedient to preserve or protect its interest and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interests or be prejudicial to the interests of the Holders or the Trustee).

Section 11.10 Powers Exercisable by Receiver or Trustee

In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article XI upon the Company and Guarantors, as applicable, with respect to

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the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Company or of any officer of officers thereof required by the provisions of this Article XI.

ARTICLE XII
MISCELLANEOUS

Section 12.1 TIA Controls

If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control. Each Guarantor in addition to performing its obligations under its Guarantee shall perform such other obligations as may be imposed upon it with respect to this Indenture under the TIA.

Section 12.2 Notices

Any notice or communication shall be in writing and delivered in person, sent by facsimile, electronic delivery or standard overnight delivery, or mailed by first-class mail addressed as follows:

if to the Company:

Reynolds American Inc.
401 North Main Street
Winston-Salem, North Carolina 27102
Attention: General Counsel

With a copy to:

Kilpatrick Stockton LLP
214 North Tryon Street
Suite 2500
Charlotte, NC 28202-2381
Attention: Elizabeth Wren

if to the Trustee:

The Bank of New York Trust Company, N.A.
101 Barclay Street, Floor 21 West,
New York, New York 10286
Attention: Corporate Trust Administration

The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

Any notice or communication mailed to a registered Securityholder shall be mailed to the Securityholder at the Securityholder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

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Section 12.3 Communication by Holders with Other Holders

Securityholders may communicate pursuant to TIA § 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

Section 12.4 Certificate and Opinion as to Conditions Precedent

Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:

(a)	an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b)	an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

Notwithstanding the foregoing, the Trustee shall not be required to obtain an Officers’ Certificate from the Guarantors with respect to the initial issuance of the Guarantees.

Section 12.5 Statements Required in Certificate or Opinion

Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:

(a)	a statement that the individual making such certificate or opinion has read such covenant or condition;
(b)	a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c)	a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d)	a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on certificates of public officials.

Section 12.6 When Securities Disregarded

In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or by any Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

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Section 12.7 Rules by Trustee, Paying Agent and Registrar

The Trustee may make reasonable rules for action by, or a meeting of, Securityholders. The Registrar and the Paying Agent may make reasonable rules for their functions.

Section 12.8 Legal Holidays

A “Legal Holiday” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York City. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

Section 12.9 GOVERNING LAW

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

Section 12.10 No Recourse Against Others

An incorporator, director, officer, employee, stockholder or controlling person, as such, of each of the Company or any Guarantor shall not have any liability for any obligations of the Company under the Securities, this Indenture or the Guarantees or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities.

Section 12.11 Successors

All agreements of the Company and the Guarantors in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind their successors.

Section 12.12 Multiple Originals

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.

Section 12.13 Variable Provisions

The Company initially appoints the Trustee as Paying Agent and Registrar.

Section 12.14 Qualification of Indenture

The Company shall qualify this Indenture under the TIA and the Company and the Guarantors shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Company, the Guarantors, the Trustee and the Holders) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Securities and printing this Indenture and the Securities. The Trustee shall be entitled to receive from the Company any such Officers’ Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the TIA.

Section 12.15 Incorporators, Stockholders, Officers and Directors of Company Exempt and Individual Liability

No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any

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incorporator, as such or against any past, present or future stockholder, officer or director, as such, of the Company or the Guarantors or of any successor, either directly or through the Company or the Guarantors or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the Holders thereof and as part of the consideration for the issue of the Securities.

Section 12.16 Provisions of Indenture for the Sole Benefit of Parties and Securityholders

Nothing in this Indenture or in the Securities expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors and the Holders of the Securities any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and of the Holders of the Securities.

Section 12.17 Waiver of Jury Trial

EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

Section 12.18 Force Majeure

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

[The remainder of this page has been left intentionally blank.]

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In Witness Whereof, the parties have caused this Indenture to be duly executed as of the date first written above.

REYNOLDS AMERICAN INC.
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer
SANTA FE NATURAL TOBACCO COMPANY, INC., as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Assistant Treasurer
LANE LIMITED, as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Assistant Treasurer
R.J. REYNOLDS TOBACCO COMPANY, as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer
RJR ACQUISITION CORP., as Guarantor
By:	/s/ McDara P. Folan, III
	Name:	McDara P. Folan, III
	Title:	Vice President & Assistant Secretary
R. J. REYNOLDS TOBACCO CO., as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

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FHS, INC., as Guarantor
By:	/s/ Kathyrn A. Premo
	Name:	Kathryn A. Premo
	Title:	Treasurer
GMB, INC., as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Treasurer

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CONWOOD HOLDINGS, INC., as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer
CONWOOD COMPANY L.P., as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer
CONWOOD SALES CO. L.P., as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer
ROSSWIL LLC, as Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer
THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
By:	/s/ Sean Julien
	Name:	Sean Julien
	Title:	Assistant Treasurer

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EX-4.2

EXHIBIT 4.2

THIS SECURITY OF REYNOLDS AMERICAN INC. (THE “COMPANY”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR OTHER LAWS.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WERE THE OWNERS OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL, OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THAT AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, THE TRUSTEE AND THE REGISTRAR IS COMPLETED AND DELIVERED

BY THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENTS IS MADE TO CEDE & CO. OR TO SUCH ANY OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC). ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

BY ITS ACQUISITION OF THIS SECURITY THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (A) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES ASSETS OF AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, OF ANY PLAN, ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF ANY ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (B) THE PURCHASE AND HOLDING OF THIS SECURITY BY SUCH HOLDER WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

REYNOLDS AMERICAN INC.

7.250 % Senior Secured Notes due 2013

Certificate No. ______	$____________
	CUSIP No. ____________

     Reynolds American Inc., a North Carolina corporation (the “Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum of ____________ ($____________) on June 1, 2013.

     Interest Payment Dates: June 1 and December 1, commencing December 1, 2006.

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     Record Dates: May 15 and November 15.

     Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall have the same effect for all purposes as if set forth at this place.

     Unless the certificate of authentication hereof has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:     May 31, 2006
	REYNOLDS AMERICAN INC., as Issuer
	By:
		Name: Title:
	By:
		Name: Title:

     Each of the undersigned hereby acknowledges its obligation as a Guarantor under the Indenture.

SANTA FE NATURAL TOBACCO COMPANY, INC. , as Guarantor
By:
	Name: Title:
LANE LIMITED, as Guarantor
By:
	Name: Title:

R.J. REYNOLDS TOBACCO COMPANY, as Guarantor
By:
	Name: Title:
RJR ACQUISITION CORP., as Guarantor
By:
	Name: Title:
R. J. REYNOLDS TOBACCO CO., as Guarantor
By:
	Name: Title:
FHS, INC., as Guarantor
By:
	Name: Title:
GMB, INC., as Guarantor
By:
	Name: Title:

CONWOOD HOLDINGS, INC., as Guarantor
By:
	Name: Title:
CONWOOD COMPANY, L.P., as Guarantor
By:
	Name: Title:
CONWOOD SALES CO., L.P., as Guarantor
By:
	Name: Title:
ROSSWIL LLC, as Guarantor
By:
	Name: Title:

(Trustee’s Certificate of Authentication)

     This is one of the Notes of the series designated herein referred to in the within-mentioned Indenture.

Dated: May 31, 2006

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
By:
	Name: Title:

[REVERSE OF INITIAL NOTE]
7.250% Senior Secured Notes due 2013

     References herein to the “Notes” mean the Company’s 7.250% Senior Secured Notes due 2013. Other capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

     1. Interest. Reynolds American Inc., a North Carolina corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7.250% per annum from the date provided below until maturity and shall pay the additional interest, if any, payable pursuant to Section 2(d) of the Registration Rights Agreement referred to below (“Additional Interest”). The Company shall pay interest and Additional Interest, if any, semi-annually on June 1 and December 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be December 1, 2006. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

     2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest) and Additional Interest, if any, to the Persons who are registered Holders of Notes at the close of business on the May 15 or November 15 immediately preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium and Additional Interest, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium and Additional Interest on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

     3. Paying Agent and Registrar. Initially, The Bank of New York Trust Company, N.A., the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

     4. Indenture. The Company issued the Notes under an Indenture dated as of May 31, 2006, among the Company, as issuer, certain direct and indirect subsidiaries of the Company, as guarantors, and The Bank of New York Trust Company, N.A., as trustee (the “Indenture”). The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To

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the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

     5. Optional Redemption. The Company may redeem all or a part of the Notes from time to time in accordance with Article 5 of the Indenture at a redemption price equal to the greater of (a) 100% of the principal amount of the Notes and (b) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 50 basis points plus with respect to each of the Notes, accrued and unpaid interest, including Additional Interest, if any, on the principal amount being redeemed to the date of redemption.

     “Treasury Rate” means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediate preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption

     “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Price for such redemption date. The Treasury Rate will be calculated on the third business day preceding the redemption date.

     “Comparable Treasury Issue” means the U.S. Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“Remaining Life”) of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.

     “Independent Investment Banker” means any of Lehman Brothers Securities Inc., J.P. Morgan Securities Inc. or Citigroup Global Markets Inc. or, if all such firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the trustee after consultation with RAI.

     “Comparable Treasury Price” means (1) the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

     “Reference Treasury Dealer” means (1) Lehman Brothers Securities Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. and their respective successors; provided,

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however, that if either of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), RAI will substitute for such initial purchaser another Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by the Independent Investment Banker after consultation with RAI.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

     6. No Sinking Fund. The Company shall not be required to make sinking fund payments with respect to the Notes.

     7. Notice of Redemption. Notice of redemption shall be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations equal to or larger than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption.

     8. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

     9. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes.

     10. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding of all series affected by such amendment or supplement, voting as a single class, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time outstanding of all series affected by such Default, voting as a single class. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Notes any property or assets; to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the

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Company; to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection or benefit of the Holders of the Notes, and to make the occurrence, or the occurrence and continuance, of a Default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in the Indenture as therein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such amendment or supplement may provide for a particular period of grace after Default (which period may be shorter or longer than that allowed in the case of other Defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Notes to waive such an Event of Default; to cure any ambiguity or to correct or supplement any provision contained in the Indenture or in any indenture supplemental thereto which may be defective or inconsistent with any other provision contained in the Indenture or in any indenture supplemental thereto; or to make such other provisions in regard to matters or questions arising under the Indenture or under any indenture supplemental thereto as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Notes in any material respect; to evidence and provide for the acceptance of appointment under the Indenture by a successor trustee with respect to the Notes and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one trustee; to comply with the requirements of the TIA; and to add additional Guarantors with respect to the Notes.

     11. Defaults and Remedies. Any of the following events constitutes an “Event of Default” under the Indenture: (a) default in the payment of any installment of interest upon Securities of any series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or (b) default in the payment of all or any part of the principal on Securities of any series as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise; or (c) default in the payment of any sinking fund installment as and when the same shall become due and payable by the terms of Securities of any series; or (d) default in the performance, or breach, of any covenant or agreement of the Company or the Guarantors in respect of Securities of any series (other than a covenant or agreement in respect of such Securities a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the outstanding Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or (e) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or the Guarantors in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (f) the Company or any Restricted Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar

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official) of the Company or for any substantial part of its property, or make any general assignment for the benefit of creditors; or (g) any Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture), or any Guarantee is declared in a judicial proceeding to be null and void, or any Guarantor denies or disaffirms in writing its obligations under the terms of the Indenture or its Guarantee; or (h) at any time as such security is required by the terms of the Indenture, any Security Document shall cease to be in full force and effect or shall cease to give the Collateral Agent the liens or any of the material rights, powers and privileges purported to be created thereby in favor of the Collateral Agent and such default shall continue unremedied for a period of at least 30 days after written notice to the Company by the Collateral Agent; or (i) any other Event of Default provided in the supplemental indenture or Board Resolution under which Securities of any series are issued or in this Note.

     If an Event of Default described in clauses (a), (b), (c), (d) or (i) above (if the Event of Default under clause (d) or (i) is with respect to less than all series of Securities then outstanding) occurs and is continuing, then, and in each and every such case, except for any series of Securities the principal of which shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of each such affected series then outstanding under the Indenture (voting as a single class) by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all Securities of all such affected series, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default described in clause (d) or (i) (if the Event of Default under clauses (d) or (i), as the case may be, is with respect to all series of Securities then outstanding), (e), (f) or (g) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then outstanding hereunder (treated as one class), by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all the Securities then outstanding and interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.

     12. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

     13. No Recourse Against Others. No director, officer, employee, incorporator or shareholder of the Company or the Trustee, as such, shall have any liability for any obligations of the Company or the Trustee, respectively, under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

     14. Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

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     15. Guarantees. This Note will be entitled to the benefits of certain Guarantees made for the benefit of the Holders. Subject to the terms of the Indenture, each Guarantor of the Indenture fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally, to each Holder of the Notes and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption, by repurchase, or otherwise, of the principal of, premium, if any, and interest on the Notes and all other obligations of the Company under the Indenture, as provided in the Indenture. Reference is made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.

     16. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (=Uniform Gifts to Minors Act).

     17. Additional Rights of Holders of Notes. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Notes shall have all the rights set forth in the Registration Rights Agreement, dated as of May 31, 2006, between the Company and each of the parties named on the signature pages thereof (the “Registration Rights Agreement”).

     18. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP or ISIN numbers or both numbers to be printed on the Notes and the Trustee may use CUSIP or ISIN numbers or both numbers in notices to the Holders of the Notes as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice to the Holders of the Notes and reliance may be placed only on the other identification numbers placed thereon.

     19. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York.

     The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:

Reynolds American Inc.
401 North Main Street
Winston-Salem, North Carolina 27101-3818
Facsimile: 336-741-5000
Attention: Treasurer

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[FORM OF TRANSFER NOTICE]

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

Please print the name and address including zip code of assignee

the within Note and all rights thereunder, hereby irrevocably constituting and appointing ________________________ attorney to transfer said Note on the books of the Company with full power of substitution in the premises.

     In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date a registration statement in relation thereto is declared effective by the SEC or (ii) the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising that:

[Check One]

[  ](a) this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933 provided by Rule l44A thereunder.

or

[  ](b) this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Article II of the Indenture shall have been satisfied.

Date:
	NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

Signature Guarantee: ________________________

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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

     The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933 and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Date:
	NOTICE: To be executed by an executive officer

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FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S

Reynolds American Inc.
401 North Main Street
Winston-Salem, North Carolina 27101-3818
Facsimile: 336-741-5000

Attention: _______________________

The Bank of New York Trust Company, N.A.
_______________________________
_______________________________
Facsimile: _______________________

Attention: _______________________

     Re: ___% Senior Secured Notes due [2013] [2016] [2018].

     Reference is hereby made to the Indenture, dated as of May 31, 2006 (the “Indenture”), between Reynolds American Inc., as issuer (the “Company”) and The Bank of New York Trust Company, N.A., as trustee.

     In connection with our proposed sale of $____________ aggregate principal amount of ___% Senior Secured Notes due 20___(the “Notes”) of the Company, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

     (a) the offer of the Notes was not made to a person in the United States;

     (b) either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;

     (c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and

     (d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

     In addition, if the sale is made during a restricted period, we represent that the sale is not being made to a United States person or for the account or benefit of a United States person.

     The Company and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or

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legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings forth in Regulation S.

	[Insert Name of Transferor]
	By:
Name: Title:
Authorized Signature

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EX-4.3

EXHIBIT 4.3

THIS SECURITY OF REYNOLDS AMERICAN INC. (THE “COMPANY”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR OTHER LAWS.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WERE THE OWNERS OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL, OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THAT AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, THE TRUSTEE AND THE REGISTRAR IS COMPLETED AND DELIVERED

BY THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENTS IS MADE TO CEDE & CO. OR TO SUCH ANY OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC). ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

BY ITS ACQUISITION OF THIS SECURITY THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (A) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES ASSETS OF AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, OF ANY PLAN, ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF ANY ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (B) THE PURCHASE AND HOLDING OF THIS SECURITY BY SUCH HOLDER WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

REYNOLDS AMERICAN INC.

7.625 % Senior Secured Notes due 2016

Certificate No. ______	$____________
	CUSIP No. ____________

     Reynolds American Inc., a North Carolina corporation (the “Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum of ____________ ($____________) on June 1, 2016.

     Interest Payment Dates: June 1 and December 1, commencing December 1, 2006.

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     Record Dates: May 15 and November 15.

     Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall have the same effect for all purposes as if set forth at this place.

     Unless the certificate of authentication hereof has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:     May 31, 2006
	REYNOLDS AMERICAN INC., as Issuer
	By:
		Name: Title:
	By:
		Name: Title:

     Each of the undersigned hereby acknowledges its obligation as a Guarantor under the Indenture.

SANTA FE NATURAL TOBACCO COMPANY, INC. , as Guarantor
By:
	Name: Title:
LANE LIMITED, as Guarantor
By:
	Name: Title:

R.J. REYNOLDS TOBACCO COMPANY, as Guarantor
By:
	Name: Title:
RJR ACQUISITION CORP., as Guarantor
By:
	Name: Title:
R. J. REYNOLDS TOBACCO CO., as Guarantor
By:
	Name: Title:
FHS, INC., as Guarantor
By:
	Name: Title:
GMB, INC., as Guarantor
By:
	Name: Title:

CONWOOD HOLDINGS, INC., as Guarantor
By:
	Name: Title:
CONWOOD COMPANY, L.P., as Guarantor
By:
	Name: Title:
CONWOOD SALES CO., L.P., as Guarantor
By:
	Name: Title:
ROSSWIL LLC, as Guarantor
By:
	Name: Title:

(Trustee’s Certificate of Authentication)

     This is one of the Notes of the series designated herein referred to in the within-mentioned Indenture.

Dated: May 31, 2006

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
By:
	Name: Title:

[REVERSE OF INITIAL NOTE]
7.625% Senior Secured Notes due 2016

     References herein to the “Notes” mean the Company’s 7.625% Senior Secured Notes due 2016. Other capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

     1. Interest. Reynolds American Inc., a North Carolina corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7.625% per annum from the date provided below until maturity and shall pay the additional interest, if any, payable pursuant to Section 2(d) of the Registration Rights Agreement referred to below (“Additional Interest”). The Company shall pay interest and Additional Interest, if any, semi-annually on June 1 and December 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be December 1, 2006. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

     2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest) and Additional Interest, if any, to the Persons who are registered Holders of Notes at the close of business on the May 15 or November 15 immediately preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium and Additional Interest, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium and Additional Interest on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

     3. Paying Agent and Registrar. Initially, The Bank of New York Trust Company, N.A., the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

     4. Indenture. The Company issued the Notes under an Indenture dated as of May 31, 2006, among the Company, as issuer, certain direct and indirect subsidiaries of the Company, as guarantors, and The Bank of New York Trust Company, N.A., as trustee (the “Indenture”). The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To

1

the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

     5. Optional Redemption. The Company may redeem all or a part of the Notes from time to time in accordance with Article 5 of the Indenture at a redemption price equal to the greater of (a) 100% of the principal amount of the Notes and (b) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 50 basis points plus with respect to each of the Notes, accrued and unpaid interest, including Additional Interest, if any, on the principal amount being redeemed to the date of redemption.

     “Treasury Rate” means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediate preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption

     “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Price for such redemption date. The Treasury Rate will be calculated on the third business day preceding the redemption date.

     “Comparable Treasury Issue” means the U.S. Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“Remaining Life”) of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.

     “Independent Investment Banker” means any of Lehman Brothers Securities Inc., J.P. Morgan Securities Inc. or Citigroup Global Markets Inc. or, if all such firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the trustee after consultation with RAI.

     “Comparable Treasury Price” means (1) the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

     “Reference Treasury Dealer” means (1) Lehman Brothers Securities Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. and their respective successors; provided,

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however, that if either of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), RAI will substitute for such initial purchaser another Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by the Independent Investment Banker after consultation with RAI.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

     6. No Sinking Fund. The Company shall not be required to make sinking fund payments with respect to the Notes.

     7. Notice of Redemption. Notice of redemption shall be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations equal to or larger than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption.

     8. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

     9. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes.

     10. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding of all series affected by such amendment or supplement, voting as a single class, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time outstanding of all series affected by such Default, voting as a single class. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Notes any property or assets; to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the

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Company; to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection or benefit of the Holders of the Notes, and to make the occurrence, or the occurrence and continuance, of a Default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in the Indenture as therein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such amendment or supplement may provide for a particular period of grace after Default (which period may be shorter or longer than that allowed in the case of other Defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Notes to waive such an Event of Default; to cure any ambiguity or to correct or supplement any provision contained in the Indenture or in any indenture supplemental thereto which may be defective or inconsistent with any other provision contained in the Indenture or in any indenture supplemental thereto; or to make such other provisions in regard to matters or questions arising under the Indenture or under any indenture supplemental thereto as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Notes in any material respect; to evidence and provide for the acceptance of appointment under the Indenture by a successor trustee with respect to the Notes and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one trustee; to comply with the requirements of the TIA; and to add additional Guarantors with respect to the Notes.

     11. Defaults and Remedies. Any of the following events constitutes an “Event of Default” under the Indenture: (a) default in the payment of any installment of interest upon Securities of any series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or (b) default in the payment of all or any part of the principal on Securities of any series as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise; or (c) default in the payment of any sinking fund installment as and when the same shall become due and payable by the terms of Securities of any series; or (d) default in the performance, or breach, of any covenant or agreement of the Company or the Guarantors in respect of Securities of any series (other than a covenant or agreement in respect of such Securities a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the outstanding Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or (e) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or the Guarantors in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (f) the Company or any Restricted Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar

4

official) of the Company or for any substantial part of its property, or make any general assignment for the benefit of creditors; or (g) any Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture), or any Guarantee is declared in a judicial proceeding to be null and void, or any Guarantor denies or disaffirms in writing its obligations under the terms of the Indenture or its Guarantee; or (h) at any time as such security is required by the terms of the Indenture, any Security Document shall cease to be in full force and effect or shall cease to give the Collateral Agent the liens or any of the material rights, powers and privileges purported to be created thereby in favor of the Collateral Agent and such default shall continue unremedied for a period of at least 30 days after written notice to the Company by the Collateral Agent; or (i) any other Event of Default provided in the supplemental indenture or Board Resolution under which Securities of any series are issued or in this Note.

     If an Event of Default described in clauses (a), (b), (c), (d) or (i) above (if the Event of Default under clause (d) or (i) is with respect to less than all series of Securities then outstanding) occurs and is continuing, then, and in each and every such case, except for any series of Securities the principal of which shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of each such affected series then outstanding under the Indenture (voting as a single class) by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all Securities of all such affected series, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default described in clause (d) or (i) (if the Event of Default under clauses (d) or (i), as the case may be, is with respect to all series of Securities then outstanding), (e), (f) or (g) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then outstanding hereunder (treated as one class), by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all the Securities then outstanding and interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.

     12. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

     13. No Recourse Against Others. No director, officer, employee, incorporator or shareholder of the Company or the Trustee, as such, shall have any liability for any obligations of the Company or the Trustee, respectively, under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

     14. Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

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     15. Guarantees. This Note will be entitled to the benefits of certain Guarantees made for the benefit of the Holders. Subject to the terms of the Indenture, each Guarantor of the Indenture fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally, to each Holder of the Notes and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption, by repurchase, or otherwise, of the principal of, premium, if any, and interest on the Notes and all other obligations of the Company under the Indenture, as provided in the Indenture. Reference is made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.

     16. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (=Uniform Gifts to Minors Act).

     17. Additional Rights of Holders of Notes. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Notes shall have all the rights set forth in the Registration Rights Agreement, dated as of May 31, 2006, between the Company and each of the parties named on the signature pages thereof (the “Registration Rights Agreement”).

     18. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP or ISIN numbers or both numbers to be printed on the Notes and the Trustee may use CUSIP or ISIN numbers or both numbers in notices to the Holders of the Notes as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice to the Holders of the Notes and reliance may be placed only on the other identification numbers placed thereon.

     19. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York.

     The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:

Reynolds American Inc.
401 North Main Street
Winston-Salem, North Carolina 27101-3818
Facsimile: 336-741-5000
Attention: Treasurer

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[FORM OF TRANSFER NOTICE]

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

Please print the name and address including zip code of assignee

the within Note and all rights thereunder, hereby irrevocably constituting and appointing __________________ attorney to transfer said Note on the books of the Company with full power of substitution in the premises.

     In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date a registration statement in relation thereto is declared effective by the SEC or (ii) the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising that:

[Check One]

[  ](a) this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933 provided by Rule l44A thereunder.

or

[  ](b) this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Article II of the Indenture shall have been satisfied.

Date:
	NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

Signature Guarantee: ____________________________

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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

     The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933 and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Date:
	NOTICE: To be executed by an executive officer

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FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S

Reynolds American Inc.
401 North Main Street
Winston-Salem, North Carolina 27101-3818
Facsimile: 336-741-5000

Attention: ___________________________

The Bank of New York Trust Company, N.A.
______________________________________
______________________________________
Facsimile: _____________________________

Attention: ___________________________

     Re: ___% Senior Secured Notes due [2013] [2016] [2018].

     Reference is hereby made to the Indenture, dated as of May 31, 2006 (the “Indenture”), between Reynolds American Inc., as issuer (the “Company”) and The Bank of New York Trust Company, N.A., as trustee.

     In connection with our proposed sale of $____________ aggregate principal amount of ___% Senior Secured Notes due 20___(the “Notes”) of the Company, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

     (a) the offer of the Notes was not made to a person in the United States;

     (b) either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;

     (c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and

     (d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

     In addition, if the sale is made during a restricted period, we represent that the sale is not being made to a United States person or for the account or benefit of a United States person.

     The Company and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or

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legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings forth in Regulation S.

	[Insert Name of Transferor]
	By:
Name: Title:
Authorized Signature

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EX-4.4

EXHIBIT 4.4

THIS SECURITY OF REYNOLDS AMERICAN INC. (THE “COMPANY”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR OTHER LAWS.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN “OFFSHORE TRANSACTION” PURSUANT TO RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WERE THE OWNERS OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL, OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THAT AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, THE TRUSTEE AND THE REGISTRAR IS COMPLETED AND DELIVERED

BY THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENTS IS MADE TO CEDE & CO. OR TO SUCH ANY OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC). ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

BY ITS ACQUISITION OF THIS SECURITY THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (A) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES ASSETS OF AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, OF ANY PLAN, ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF ANY ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (B) THE PURCHASE AND HOLDING OF THIS SECURITY BY SUCH HOLDER WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

REYNOLDS AMERICAN INC.

7.750 % Senior Secured Notes due 2018

Certificate No. ______	$____________
	CUSIP No. ____________

     Reynolds American Inc., a North Carolina corporation (the “Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum of ____________ ($____________) on June 1, 2018.

     Interest Payment Dates: June 1 and December 1, commencing December 1, 2006.

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     Record Dates: May 15 and November 15.

     Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall have the same effect for all purposes as if set forth at this place.

     Unless the certificate of authentication hereof has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:     May 31, 2006
	REYNOLDS AMERICAN INC., as Issuer
	By:
		Name: Title:
	By:
		Name: Title:

     Each of the undersigned hereby acknowledges its obligation as a Guarantor under the Indenture.

SANTA FE NATURAL TOBACCO COMPANY, INC. , as Guarantor
By:
	Name: Title:
LANE LIMITED, as Guarantor
By:
	Name: Title:

R.J. REYNOLDS TOBACCO COMPANY, as Guarantor
By:
	Name: Title:
RJR ACQUISITION CORP., as Guarantor
By:
	Name: Title:
R. J. REYNOLDS TOBACCO CO., as Guarantor
By:
	Name: Title:
FHS, INC., as Guarantor
By:
	Name: Title:
GMB, INC., as Guarantor
By:
	Name: Title:

CONWOOD HOLDINGS, INC., as Guarantor
By:
	Name: Title:
CONWOOD COMPANY, L.P., as Guarantor
By:
	Name: Title:
CONWOOD SALES CO., L.P., as Guarantor
By:
	Name: Title:
ROSSWIL LLC, as Guarantor
By:
	Name: Title:

(Trustee’s Certificate of Authentication)

     This is one of the Notes of the series designated herein referred to in the within-mentioned Indenture.

Dated: May 31, 2006

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
By:
	Name: Title:

[REVERSE OF INITIAL NOTE]
7.750% Senior Secured Notes due 2018

     References herein to the “Notes” mean the Company’s 7.750% Senior Secured Notes due 2018. Other capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

     1. Interest. Reynolds American Inc., a North Carolina corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7.750% per annum from the date provided below until maturity and shall pay the additional interest, if any, payable pursuant to Section 2(d) of the Registration Rights Agreement referred to below (“Additional Interest”). The Company shall pay interest and Additional Interest, if any, semi-annually on June 1 and December 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be December 1, 2006. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

     2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest) and Additional Interest, if any, to the Persons who are registered Holders of Notes at the close of business on the May 15 or November 15 immediately preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium and Additional Interest, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium and Additional Interest on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

     3. Paying Agent and Registrar. Initially, The Bank of New York Trust Company, N.A., the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

     4. Indenture. The Company issued the Notes under an Indenture dated as of May 31, 2006, among the Company, as issuer, certain direct and indirect subsidiaries of the Company, as guarantors, and The Bank of New York Trust Company, N.A., as trustee (the “Indenture”). The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To

1

the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

     5. Optional Redemption. The Company may redeem all or a part of the Notes from time to time in accordance with Article 5 of the Indenture at a redemption price equal to the greater of (a) 100% of the principal amount of the Notes and (b) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable Treasury Rate plus 50 basis points plus with respect to each of the Notes, accrued and unpaid interest, including Additional Interest, if any, on the principal amount being redeemed to the date of redemption.

     “Treasury Rate” means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediate preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption

     “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Price for such redemption date. The Treasury Rate will be calculated on the third business day preceding the redemption date.

     “Comparable Treasury Issue” means the U.S. Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“Remaining Life”) of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.

     “Independent Investment Banker” means any of Lehman Brothers Securities Inc., J.P. Morgan Securities Inc. or Citigroup Global Markets Inc. or, if all such firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the trustee after consultation with RAI.

     “Comparable Treasury Price” means (1) the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

     “Reference Treasury Dealer” means (1) Lehman Brothers Securities Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. and their respective successors; provided,

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however, that if either of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), RAI will substitute for such initial purchaser another Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by the Independent Investment Banker after consultation with RAI.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

     6. No Sinking Fund. The Company shall not be required to make sinking fund payments with respect to the Notes.

     7. Notice of Redemption. Notice of redemption shall be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations equal to or larger than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption.

     8. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

     9. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes.

     10. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding of all series affected by such amendment or supplement, voting as a single class, and any existing Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time outstanding of all series affected by such Default, voting as a single class. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Notes any property or assets; to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the

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Company; to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection or benefit of the Holders of the Notes, and to make the occurrence, or the occurrence and continuance, of a Default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in the Indenture as therein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such amendment or supplement may provide for a particular period of grace after Default (which period may be shorter or longer than that allowed in the case of other Defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Notes to waive such an Event of Default; to cure any ambiguity or to correct or supplement any provision contained in the Indenture or in any indenture supplemental thereto which may be defective or inconsistent with any other provision contained in the Indenture or in any indenture supplemental thereto; or to make such other provisions in regard to matters or questions arising under the Indenture or under any indenture supplemental thereto as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Notes in any material respect; to evidence and provide for the acceptance of appointment under the Indenture by a successor trustee with respect to the Notes and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one trustee; to comply with the requirements of the TIA; and to add additional Guarantors with respect to the Notes.

     11. Defaults and Remedies. Any of the following events constitutes an “Event of Default” under the Indenture: (a) default in the payment of any installment of interest upon Securities of any series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or (b) default in the payment of all or any part of the principal on Securities of any series as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise; or (c) default in the payment of any sinking fund installment as and when the same shall become due and payable by the terms of Securities of any series; or (d) default in the performance, or breach, of any covenant or agreement of the Company or the Guarantors in respect of Securities of any series (other than a covenant or agreement in respect of such Securities a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the outstanding Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or (e) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or the Guarantors in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (f) the Company or any Restricted Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar

4

official) of the Company or for any substantial part of its property, or make any general assignment for the benefit of creditors; or (g) any Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture), or any Guarantee is declared in a judicial proceeding to be null and void, or any Guarantor denies or disaffirms in writing its obligations under the terms of the Indenture or its Guarantee; or (h) at any time as such security is required by the terms of the Indenture, any Security Document shall cease to be in full force and effect or shall cease to give the Collateral Agent the liens or any of the material rights, powers and privileges purported to be created thereby in favor of the Collateral Agent and such default shall continue unremedied for a period of at least 30 days after written notice to the Company by the Collateral Agent; or (i) any other Event of Default provided in the supplemental indenture or Board Resolution under which Securities of any series are issued or in this Note.

     If an Event of Default described in clauses (a), (b), (c), (d) or (i) above (if the Event of Default under clause (d) or (i) is with respect to less than all series of Securities then outstanding) occurs and is continuing, then, and in each and every such case, except for any series of Securities the principal of which shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of each such affected series then outstanding under the Indenture (voting as a single class) by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all Securities of all such affected series, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default described in clause (d) or (i) (if the Event of Default under clauses (d) or (i), as the case may be, is with respect to all series of Securities then outstanding), (e), (f) or (g) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then outstanding hereunder (treated as one class), by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of all the Securities then outstanding and interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.

     12. Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

     13. No Recourse Against Others. No director, officer, employee, incorporator or shareholder of the Company or the Trustee, as such, shall have any liability for any obligations of the Company or the Trustee, respectively, under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

     14. Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

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     15. Guarantees. This Note will be entitled to the benefits of certain Guarantees made for the benefit of the Holders. Subject to the terms of the Indenture, each Guarantor of the Indenture fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally, to each Holder of the Notes and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption, by repurchase, or otherwise, of the principal of, premium, if any, and interest on the Notes and all other obligations of the Company under the Indenture, as provided in the Indenture. Reference is made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.

     16. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (=Uniform Gifts to Minors Act).

     17. Additional Rights of Holders of Notes. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Notes shall have all the rights set forth in the Registration Rights Agreement, dated as of May 31, 2006, between the Company and each of the parties named on the signature pages thereof (the “Registration Rights Agreement”).

     18. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP or ISIN numbers or both numbers to be printed on the Notes and the Trustee may use CUSIP or ISIN numbers or both numbers in notices to the Holders of the Notes as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice to the Holders of the Notes and reliance may be placed only on the other identification numbers placed thereon.

     19. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York.

     The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:

Reynolds American Inc.
401 North Main Street
Winston-Salem, North Carolina 27101-3818
Facsimile: 336-741-5000
Attention: Treasurer

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[FORM OF TRANSFER NOTICE]

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

Please print the name and address including zip code of assignee

the within Note and all rights thereunder, hereby irrevocably constituting and appointing __________________ attorney to transfer said Note on the books of the Company with full power of substitution in the premises.

     In connection with any transfer of this Note occurring prior to the date which is the earlier of (i) the date a registration statement in relation thereto is declared effective by the SEC or (ii) the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising that:

[Check One]

[  ](a) this Note is being transferred in compliance with the exemption from registration under the Securities Act of 1933 provided by Rule l44A thereunder.

or

[  ](b) this Note is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

If none of the foregoing boxes is checked, the Trustee or other Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Article II of the Indenture shall have been satisfied.

Date:
	NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

Signature Guarantee: __________________________________

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Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

     The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933 and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Date:
	NOTICE: To be executed by an executive officer

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FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S

Reynolds American Inc.
401 North Main Street
Winston-Salem, North Carolina 27101-3818
Facsimile: 336-741-5000

Attention: _____________________________

The Bank of New York Trust Company, N.A.
_______________________________________
_______________________________________
Facsimile: ____________________________

Attention: ____________________________

     Re: ___% Senior Secured Notes due [2013] [2016] [2018].

     Reference is hereby made to the Indenture, dated as of May 31, 2006 (the “Indenture”), between Reynolds American Inc., as issuer (the “Company”) and The Bank of New York Trust Company, N.A., as trustee.

     In connection with our proposed sale of $____________ aggregate principal amount of ___% Senior Secured Notes due 20___(the “Notes”) of the Company, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

     (a) the offer of the Notes was not made to a person in the United States;

     (b) either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;

     (c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; and

     (d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

     In addition, if the sale is made during a restricted period, we represent that the sale is not being made to a United States person or for the account or benefit of a United States person.

     The Company and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or

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legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings forth in Regulation S.

	[Insert Name of Transferor]
	By:
Name: Title:
Authorized Signature

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EX-4.5

EXHIBIT 4.5

FIFTH SUPPLEMENTAL INDENTURE

     This Fifth Supplemental Indenture, dated as of May 31, 2006 (this “Fifth Supplemental Indenture”), among R.J. Reynolds Tobacco Holdings, Inc., a Delaware corporation (the “Company”) and Reynolds American Inc., a North Carolina corporation, R. J. Reynolds Tobacco Company, a North Carolina corporation, RJR Acquisition Corp., a Delaware corporation, GMB, Inc., a North Carolina corporation, FHS, Inc., a Delaware corporation, and R. J. Reynolds Tobacco Co., a Delaware corporation, (collectively, the “Guarantors”), and The Bank of New York Trust Company, N.A., as Trustee under the Indenture referred to below.

WITNESSETH:

     WHEREAS, the Company, the Guarantors, and the Trustee are parties to an Indenture, dated as of May 15, 1999 (as amended, supplemented, waived or otherwise modified, the “Indenture”), pursuant to which an aggregate principal amount of $200,000,000 of the Company’s 7 7/8% Notes due 2009 (the “Notes”) remain outstanding; and

     WHEREAS, the Third Amended and Restated Credit Agreement, dated as of July 30, 2004, among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, and the various lending institutions named on the signature pages thereof (the “Third Amended and Restated Credit Agreement”), has been replaced by that certain Fourth Amended and Restated Credit Agreement, dated as of May 31, 2006, among Reynolds American, Inc. (“RAI”), JPMorgan Chase Bank, N.A., as Administrative Agent, and the various lending institutions named on the signature pages thereof (the “Fourth Amended and Restated Credit Agreement”); and

     WHEREAS, the Company and the Guarantors have determined that it is desirable to confirm and agree that (i) for purposes of the Indenture, the Fourth Amended and Restated Credit Agreement constitutes a refinancing and replacement of the Third Amended and Restated Credit Agreement and thus should be encompassed by the definition of Bank Credit Agreement in the Indenture, and (ii) RAI, which is the borrower under the Fourth Amended and Restated Credit Agreement rather than a guarantor, shall not as a result of its new status be released as a Guarantor under the Indenture; and

     WHEREAS, pursuant to Section IX.1 of the Indenture, the Company, the Guarantors, and the Trustee are authorized or permitted to execute and deliver this Fifth Supplemental Indenture to amend the Indenture, without the consent of any Noteholder;

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:

ARTICLE I

Definitions

     SECTION 1.1 Defined Terms. As used in this Fifth Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “Holders” in this Fifth Supplemental Indenture shall refer to the term “Holders” as defined in the Indenture and the Trustee acting on behalf or for the benefit of such holders. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Fifth Supplemental Indenture refer to this Fifth Supplemental Indenture as a whole and not to any particular section hereof.

ARTICLE II

Amendments to Indenture

     SECTION 2.1 Definition of Bank Credit Agreement. The Indenture is hereby amended so that the term “Bank Credit Agreement” as used in the Indenture shall mean the Fourth Amended and Restated Credit Agreement, dated as of May 31, 2006, among Reynolds American, Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, and the various lending institutions named on the signature pages thereof, as such agreement may be amended, modified, renewed, refunded, restated, refinanced or replaced from time to time.

     SECTION 2.2 RAI as Guarantor. RAI shall remain as a Guarantor under Article X of the Indenture so long as it is either a borrower under, or party to, the Bank Credit Agreement, as defined above, or a Bank Credit Agreement Guarantor.

     SECTION 2.3 Packaging No Longer Guarantor. The parties hereby acknowledge that RJR Packaging, LLC is not a guarantor of the Fourth Amended and Restated Credit Agreement and accordingly is no longer a Guarantor under the Indenture.

ARTICLE III

Miscellaneous

     SECTION 3.1 Notices. All notices and other communications to a Guarantor shall be given as provided in the Indenture to the Guarantor at its address set forth below, with a copy to the Company as provided in the Indenture for notices to the Company.

     SECTION 3.2 Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Fifth Supplemental Indenture or the Indenture or any provision herein or therein contained.

     SECTION 3.3 Governing Law. This Fifth Supplemental Indenture shall be governed by the laws of the State of New York.

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     SECTION 3.4 Severability Clause. In any case any provision in this Fifth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

     SECTION 3.5 Ratification of Indenture; Fifth Supplemental Indenture Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Fifth Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee makes no representation or warranty as to the validity of this Fifth Supplemental Indenture.

     SECTION 3.6 Counterparts. The parties hereto may sign one or more copies of this Fifth Supplemental Indenture in counterparts, all of which together shall constitute one and the same agreement.

     SECTION 3.7 Headings. The headings of the Articles and the sections in this Fifth Supplemental Indenture are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

     SECTION 3.8 Trustee. The Trustee makes no representations as to the validity or sufficiency of this Fifth Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and the Guarantors and not of the Trustee.

[Signatures on following page]

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     IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed as of the date first above written.

Address: 401 North Main Street Winston-Salem, NC 27102	R.J. REYNOLDS TOBACCO HOLDINGS, INC.
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Senior Vice President & Treasurer
Address: 401 North Main Street Winston-Salem, NC 27102	REYNOLDS AMERICAN INC., as a guarantor
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Senior Vice President & Treasurer
Address: 1007 N. Orange Street Suite 1402 Wilmington, DE 19801	RJR ACQUISITION CORP., as a Guarantor
	By:	/s/ McDara P. Folan, III
		Name:	McDara P. Folan, III
		Title:	Vice President & Assistant Secretary
Address: 401 North Main Street Winston-Salem, NC 27102	R. J. REYNOLDS TOBACCO COMPANY, as a Guarantor
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Senior Vice President & Treasurer
Address: 401 North Main Street Winston-Salem, NC 27102	R. J. REYNOLDS TOBACCO CO., as a Guarantor
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Vice President & Treasurer

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Address: Suite 1402 Wilmington, DE 19801 1007 N. Orange Street	FHS, INC., as a Guarantor
	By:	/s/ Kathryn A. Premo
		Name:	Kathryn A. Premo
		Title:	Treasurer
Address: 401 North Main Street Winston-Salem, NC 27102	GMB, INC., as a Guarantor
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Treasurer

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
By:	/s/ Sean Julien
	Name:	Sean Julien
	Title:	Assistant Treasurer

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EX-4.6

EXHIBIT 4.6

THIRD SUPPLEMENTAL INDENTURE

     This Third Supplemental Indenture, dated as of May 31, 2006 (this “Third Supplemental Indenture”), among R.J. Reynolds Tobacco Holdings, Inc., a Delaware corporation (the “Company”) and Reynolds American Inc., a North Carolina corporation, R. J. Reynolds Tobacco Company, a North Carolina corporation, RJR Acquisition Corp., a Delaware corporation, GMB, Inc., a North Carolina corporation, FHS, Inc., a Delaware corporation, and R. J. Reynolds Tobacco Co., a Delaware corporation, (collectively, the “Guarantors”), and The Bank of New York Trust Company, N.A., as Trustee under the Indenture referred to below.

WITNESSETH:

     WHEREAS, the Company, the Guarantors, and the Trustee are parties to an Indenture, dated as of May 20, 2002 (as amended, supplemented, waived or otherwise modified, the “Indenture”), pursuant to which an aggregate principal amount of $300,000,000 of the Company’s 6.50 % Notes due 2007, an aggregate principal amount of $450,000,000 of the Company’s 7.25% Notes due 2012, an aggregate principal amount of $300,000,000 of the Company’s 6.500% Secured Notes due 2010, and an aggregate principal amount of the Company’s 7.300% Secured Notes due 2015 (the “Notes”) remain outstanding; and

     WHEREAS, the Third Amended and Restated Credit Agreement, dated as of July 30, 2004, among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, and the various lending institutions named on the signature pages thereof (the “Third Amended and Restated Credit Agreement”) has been replaced by that certain Fourth Amended and Restated Credit Agreement, dated as of May 31, 2006, among Reynolds American, Inc. (“RAI”), JPMorgan Chase Bank, N.A., as Administrative Agent, and the various lending institutions named on the signature pages thereof (the “Fourth Amended and Restated Credit Agreement”); and

     WHEREAS, the Company and the Guarantors have determined that it is desirable to confirm and agree that (i) for purposes of the Indenture, the Fourth Amended and Restated Credit Agreement constitutes a refinancing and replacement of the Third Amended and Restated Credit Agreement and thus should be encompassed by the definition of Bank Credit Agreement in the Indenture, and (ii) RAI, which is the borrower under the Fourth Amended and Restated Credit Agreement rather than a guarantor, shall not as a result of its new status be released as a Guarantor under the Indenture; and

     WHEREAS, pursuant to Section 9.01 of the Indenture, the Company, the Guarantors, and the Trustee are authorized or permitted to execute and deliver this Third Supplemental Indenture to amend the Indenture, without the consent of any Noteholder;

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:

ARTICLE I

Definitions

     SECTION 1.1 Defined Terms. As used in this Third Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “Holders” in this Third Supplemental Indenture shall refer to the term “Holders” as defined in the Indenture and the Trustee acting on behalf or for the benefit of such holders. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Third Supplemental Indenture refer to this Third Supplemental Indenture as a whole and not to any particular section hereof.

ARTICLE II

Amendments to Indenture

     SECTION 2.1 Definition of Bank Credit Agreement. Section 1.01 of the Indenture is hereby amended so that the term “Bank Credit Agreement” as used in the Indenture shall mean the Fourth Amended and Restated Credit Agreement, dated as of May 31, 2006, among Reynolds American, Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, and the various lending institutions named on the signature pages thereof, as such agreement may be amended, modified, renewed, refunded, restated, refinanced or replaced from time to time.

     SECTION 2.2 RAI as Guarantor. RAI shall remain as a Guarantor under the Indenture so long as it is either a borrower under, or party to, the Bank Credit Agreement, as defined above, or a Bank Credit Agreement Guarantor.

     SECTION 2.3 Packaging No Longer Guarantor. The parties hereby acknowledge that RJR Packaging, LLC is not a guarantor of the Fourth Amended and Restated Credit Agreement and accordingly is no longer a Guarantor under the Indenture.

ARTICLE III

Miscellaneous

     SECTION 3.1 Notices. All notices and other communications to a Guarantor shall be given as provided in the Indenture to the Guarantor at its address set forth below, with a copy to the Company as provided in the Indenture for notices to the Company.

     SECTION 3.2 Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Third Supplemental Indenture or the Indenture or any provision herein or therein contained.

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     SECTION 3.3 Governing Law. This Third Supplemental Indenture shall be governed by the laws of the State of New York.

     SECTION 3.4 Severability Clause. In any case any provision in this Third Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

     SECTION 3.5 Ratification of Indenture; Third Supplemental Indenture Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Third Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee makes no representation or warranty as to the validity of this Third Supplemental Indenture.

     SECTION 3.6 Counterparts. The parties hereto may sign one or more copies of this Third Supplemental Indenture in counterparts, all of which together shall constitute one and the same agreement.

     SECTION 3.7 Headings. The headings of the Articles and the sections in this Third Supplemental Indenture are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

     SECTION 3.8 Trustee. The Trustee makes no representations as to the validity or sufficiency of this Third Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and the Guarantors and not of the Trustee.

[Signatures on following page]

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     IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the date first above written.

Address: 401 North Main Street Winston-Salem, NC 27102	R.J. REYNOLDS TOBACCO HOLDINGS, INC.
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Senior Vice President & Treasurer
Address: 401 North Main Street Winston-Salem, NC 27102	REYNOLDS AMERICAN INC., as a guarantor
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Senior Vice President & Treasurer
Address: 1007 N. Orange Street Suite 1402 Wilmington, DE 19801	RJR ACQUISITION CORP., as a Guarantor
	By:	/s/ McDara P. Folan, III
		Name:	McDara P. Folan, III
		Title:	Vice President & Assistant Secretary
Address: 401 North Main Street Winston-Salem, NC 27102	R. J. REYNOLDS TOBACCO COMPANY, as a Guarantor
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Senior Vice President & Treasurer
Address: 401 North Main Street Winston-Salem, NC 27102	R. J. REYNOLDS TOBACCO CO., as a Guarantor
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Vice President & Treasurer

4

Address: 1007 N. Orange Street Suite 1402 Wilmington, DE 19801	FHS, INC., as a Guarantor
	By:	/s/ Kathryn A. Premo
		Name:	Kathryn A. Premo
		Title:	Treasurer
Address: 401 North Main Street Winston-Salem, NC 27102	GMB, INC., as a Guarantor
	By:	/s/ Daniel A. Fawley
		Name:	Daniel A. Fawley
		Title:	Treasurer

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
By:	/s/ Sean Julien
	Name:	Sean Julien
	Title:	Assistant Treasurer

5

EX-10.1

EXHIBIT 10.1

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

AMONG

REYNOLDS AMERICAN INC.,

JPMORGAN CHASE BANK, N.A.
as ADMINISTRATIVE AGENT,

LEHMAN COMMERCIAL PAPER INC.
and
CITICORP USA, INC.,
as SYNDICATION AGENTS,

GENERAL ELECTRIC CAPITAL CORPORATION
and
MIZUHO CORPORATE BANK, LTD.,
as DOCUMENTATION AGENTS,

LEHMAN BROTHERS INC.,
J.P. MORGAN SECURITIES INC.,
CITIGROUP GLOBAL MARKETS INC.
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as JOINT LEAD ARRANGERS

LEHMAN BROTHERS INC.,
J.P. MORGAN SECURITIES INC.
and
CITIGROUP GLOBAL MARKETS INC.,
as JOINT BOOKRUNNERS

and

VARIOUS LENDING INSTITUTIONS

Dated as of May 31, 2006

$2,100,000,000

** This Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) contains representations and warranties Reynolds American Inc. made to its lenders. These representations and warranties were made as of specific dates and are subject to qualifications and limitations agreed to by Reynolds American Inc. and the other parties to the Credit Agreement in connection with negotiating the terms of the Credit Agreement. Moreover, these representations and warranties are subject to contractual standards of materiality that may be different from those generally applicable to disclosures to securityholders and in some cases may have been made solely for the purpose of providing contractual rights and remedies to the parties rather than to establish matters as facts. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of affairs.**

TABLE OF CONTENTS

SECTION 1. Amount and Terms of Credit	1
1.01 Commitments	1
1.02 Minimum Amount of Each Borrowing; Maximum Number of Borrowings	3
1.03 Notice of Borrowing of Committed Loans	3
1.04 Disbursement of Funds	4
1.05 Notes; Register	5
1.06 Conversions	7
1.07 Pro Rata Borrowings	7
1.08 Interest	7
1.09 Interest Periods	8
1.10 Increased Costs, Illegality, etc	9
1.11 Compensation	11
1.12 Change of Lending Office	11
1.13 [RESERVED]	11
1.14 Replacement of Lenders	11
1.15 Notice of Certain Costs	12
1.16 Incremental RL Commitments	12
SECTION 2. Letters of Credit	14
2.01 Letters of Credit	14
2.02 Letter of Credit Requests	15
2.03 Letter of Credit Participations	15
2.04 Agreement to Repay Letter of Credit Drawings	17
2.05 Increased Costs	18
2.06 Indemnification; Nature of Letter of Credit Issuers’ Duties	18
SECTION 3. Fees; Commitments	20
3.01 Fees	20
3.02 Voluntary Reduction of Commitments	21
3.03 Termination of Commitments	21
SECTION 4. Payments	21
4.01 Voluntary Prepayments	21
4.02 Mandatory Prepayments	22
4.03 Method and Place of Payment	25
4.04 Net Payments	26
SECTION 5. Conditions Precedent	28
5.01 Conditions Precedent to the Fourth Restatement Effective Date	28
5.02 Conditions Precedent to All Credit Events	34

(i)

TABLE OF CONTENTS

(continued)

SECTION 6. Representations, Warranties and Agreements	34
6.01 Status	35
6.02 Power and Authority	35
6.03 No Violation	35
6.04 Litigation	35
6.05 Use of Proceeds; Margin Regulations	36
6.06 Governmental Approvals	36
6.07 Investment Company Act	36
6.08 True and Complete Disclosure	37
6.09 Financial Condition; Financial Statements; Solvency	37
6.10 Tax Returns and Payments	38
6.11 Compliance with ERISA	38
6.12 Subsidiaries	38
6.13 Patents, etc.	39
6.14 Pollution and Other Regulations	39
6.15 Properties	39
SECTION 7. Affirmative Covenants	39
7.01 Information Covenants	39
7.02 Books, Records and Inspections	41
7.03 Insurance	41
7.04 Payment of Taxes	41
7.05 Consolidated Corporate Franchises	42
7.06 Compliance with Statutes, etc.	42
7.07 ERISA	42
7.08 Good Repair	43
7.09 End of Fiscal Years; Fiscal Quarters	43
7.10 Subsidiary Guaranty; Collateral	43
7.11 Margin Stock	45
7.12 Ownership Structure	46
7.13 Tax Sharing Agreement	46
7.14 Post Closing Liquidation	46
SECTION 8. Negative Covenants	46
8.01 Changes in Business	46
8.02 Consolidation, Merger, Sale of Assets, etc.	46
8.03 Liens	49
8.04 Indebtedness	51
8.05 Limitation on Dividends	54
8.06 Transactions with Affiliates	55
8.07 Consolidated Total Leverage Ratio	56
8.08 Consolidated Fixed Charge Coverage Ratio	56
8.09 Investments	56

(ii)

TABLE OF CONTENTS

(continued)

8.10 No Negative Pledge	60
8.11 Modifications of Acquisition Documents and Certain Other Agreements; Limitations on Voluntary Payments, etc.	60
8.12 Maintenance of Company Separateness	61
8.13 Capital Expenditures	61
SECTION 9. Events of Default	62
9.01 Payments	62
9.02 Representations, etc.	62
9.03 Covenants.	62
9.04 Default Under Other Agreements	62
9.05 Bankruptcy, etc.	63
9.06 ERISA	63
9.07 Guaranties	64
9.08 Judgments	64
9.09 Security Documents	64
9.10 Change of Control	64
SECTION 10. Definitions	65
SECTION 11. The Lead Agents	102
11.01 Appointment	102
11.02 Delegation of Duties	103
11.03 Exculpatory Provisions	103
11.04 Reliance by Lead Agents	104
11.05 Notice of Default	104
11.06 Non-Reliance on Lead Agents and Other Lenders	104
11.07 Indemnification	105
11.08 Lead Agents in Their Individual Capacities	105
11.09 Successor Lead Agents, etc.	105
SECTION 12. Miscellaneous	106
12.01 Payment of Expenses, etc	106
12.02 Right of Setoff	108
12.03 Notices	108
12.04 Benefit of Agreement	108
12.05 No Waiver; Remedies Cumulative	112
12.06 Payments Pro Rata	113
12.07 Calculations; Computations	113
12.08 Governing Law; Submission to Jurisdiction; Venue	114
12.09 Counterparts; Severability	115
12.10 Execution	115
12.11 Headings Descriptive	115
12.12 Amendment or Waiver	116

(iii)

TABLE OF CONTENTS

(continued)

12.13 Survival	116
12.14 Domicile of Loans	117
12.15 Confidentiality	117
12.16 Waiver of Jury Trial	118
12.17 USA Patriot Act	118
12.18 Interest Rate Limitation	118
12.19 Post-Closing Actions	119
12.20 Special Provisions Relating to Amendment and Restatement	119
SECTION 13. Borrower Guaranty	121
13.01 The Guaranty	121
13.02 Bankruptcy	121
13.03 Nature of Liability	122
13.04 Independent Obligation	122
13.05 Authorization	122
13.06 Reliance	123
13.07 Subordination	123
13.08 Waiver	124
13.09 Payments	125

ANNEX I	List of Lenders and Commitments
ANNEX II	Lender Addresses
ANNEX III	Existing Letters of Credit
ANNEX IV	Certain Litigation
ANNEX V	List of Subsidiaries
ANNEX VI	Existing Liens
ANNEX VII	Existing Debt
ANNEX VIII	Real Property
ANNEX IX	Existing Investments
ANNEX X	Post-Closing Matters
ANNEX XI	Designated Properties
EXHIBIT A-1	Form of Term Note
EXHIBIT A-2	Form of Revolving Note
EXHIBIT A-3	Form of Swingline Note
EXHIBIT B	Form of Letter of Credit Request
EXHIBIT C-1	Form of Opinion of Executive Vice President, General Counsel and Assistant Secretary
EXHIBIT C-2	Form of Opinion of Womble Carlyle Sandridge & Rice, PLLC
EXHIBIT C-3	Form of Opinion of Kilpatrick Stockton LLP
EXHIBIT D	Form of Subsidiary Guaranty
EXHIBIT E	Form of Assignment Agreement
EXHIBIT F	Form of Solvency Certificate

(iv)

TABLE OF CONTENTS

(continued)

EXHIBIT G	Form of Intercompany Subordination Agreement
EXHIBIT H	Form of Pledge Agreement
EXHIBIT I	Form of Security Agreement
EXHIBIT J	Form of Section 4.04(b)(ii) Certificate
EXHIBIT K	Form of Incremental RL Commitment Agreement
EXHIBIT L	Form of RAI Assumption Agreement
EXHIBIT M	Form of RJRTH Intercompany Note
EXHIBIT N	Form of RAI Existing Senior Notes Assumption and Indemnification Agreement

(v)

          FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 31, 2006, among REYNOLDS AMERICAN INC., a North Carolina corporation (the “Borrower”), and the lending institutions listed from time to time on Annex I hereto (each, a “Lender” and, collectively, the “Lenders”). Unless otherwise defined herein, all capitalized terms used herein and defined in Section 10 are used herein as so defined.

WITNESSETH:

          WHEREAS, the Borrower, R.J. Reynolds Tobacco Holdings, Inc., a Delaware corporation (“RJRTH”), and certain financial institutions are party to a Credit Agreement, dated as of May 7, 1999, amended and restated as of November 17, 2000, amended and restated as of May 10, 2002 and further amended and restated as of July 30, 2004 (as so amended and restated and as the same has been further amended, modified, supplemented to, but not including, the Fourth Restatement Effective Date, the “Third Amended and Restated Credit Agreement”); and

          WHEREAS, the parties hereto wish to amend and restate the Third Amended and Restated Credit Agreement in its entirety as herein provided;

          NOW, THEREFORE, the parties hereto agree that the Third Amended and Restated Credit Agreement shall be and is hereby amended and restated in its entirety as follows:

          NOW, THEREFORE, IT IS AGREED:

          SECTION 1. Amount and Terms of Credit.

          1.01 Commitments. (a) Subject to and upon the terms and conditions herein set forth, each Lender with a Revolving Loan Commitment severally agrees to make a loan or loans (each, a “Revolving Loan” and, collectively, the “Revolving Loans”) to the Borrower, which Revolving Loans:

     (i) shall be made at any time and from time to time on and after the Original Effective Date and prior to the Revolving Loan Maturity Date;

     (ii) may, at the option of the Borrower, be incurred and maintained as, and/or converted into, Reference Rate Loans or Eurodollar Loans, provided that all Revolving Loans comprising the same Borrowing shall, unless otherwise specifically provided herein, consist entirely of Revolving Loans of the same Type;

     (iii) may be repaid and reborrowed in accordance with the provisions hereof; and

     (iv) shall not exceed for any Lender at any time outstanding that aggregate principal amount which, when added to the product of (x) such Lender’s RL Percentage and (y) the sum of (I) the aggregate Letter of Credit Outstandings plus (II) the aggregate outstanding principal amount of all Swingline Loans then outstanding, equals the Revolving Loan Commitment of such Lender at such time.

          (b) Subject to and upon the terms and conditions herein set forth, the Swingline Lender agrees, at any time and from time to time on and after the Original Effective Date and prior to the Swingline Maturity Date, to make a loan or loans (each, a “Swingline Loan” and, collectively, the “Swingline Loans”) to the Borrower, which Swingline Loans:

     (i) shall be Reference Rate Loans;

     (ii) shall have the benefit of the provisions of Section 1.01(c);

     (iii) shall not exceed in the aggregate at any one time outstanding the Swingline Commitment of the Swingline Lender at such time;

     (iv) shall not exceed at any time outstanding that aggregate principal amount which, when combined with the aggregate principal amount of all Revolving Loans then outstanding and all Letter of Credit Outstandings at such time, equals the Total Revolving Loan Commitment then in effect; and

     (v) may be repaid and reborrowed in accordance with the provisions hereof.

          On (x) the Swingline Maturity Date, all Swingline Loans shall be repaid in full and (y) the last Business Day of each calendar quarter, all Swingline Loans shall be repaid in full and may not be reborrowed until the next succeeding Business Day, provided that repayment of the Swingline Loans pursuant to this clause (y) shall not be required to the extent that the aggregate outstanding principal amount of Swingline Loans to be repaid is less than $10,000,000. The Swingline Lender will not make a Swingline Loan after it has received written notice from the Required Lenders that one or more of the applicable conditions to Credit Events specified in Section 5 are not then satisfied.

          (c) On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the RL Lenders that all then outstanding Swingline Loans shall be funded with a Borrowing of Revolving Loans (provided that such notice shall be deemed to have been automatically given by the Swingline Lender upon the occurrence of an Event of Default under Section 9.05), in which case a Borrowing of Revolving Loans constituting Reference Rate Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made on the immediately succeeding Business Day by all RL Lenders pro rata based on each RL Lender’s RL Percentage, and the proceeds thereof shall be applied directly to repay the Swingline Lender for its outstanding Swingline Loans. Each RL Lender hereby irrevocably agrees to make Reference Rate Loans upon one Business Day’s notice (or deemed notice) pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Swingline Lender, notwithstanding (i) that the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified in Section 5 are then satisfied, (iii) whether a Default or an Event of Default has occurred and is continuing, (iv) the date of such Mandatory Borrowing and (v) any reduction in the Total Revolving Loan Commitment after any such Swingline Loans were made. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code in respect of the Borrower), each

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RL Lender (other than the Swingline Lender) hereby agrees that it shall forthwith purchase from the Swingline Lender (without recourse or warranty) such assignment of its outstanding Swingline Loans as shall be necessary to cause the RL Lenders to share in such Swingline Loans ratably based upon their respective RL Percentages; provided that all interest payable on such Swingline Loans shall be for the account of the Swingline Lender until the date the respective assignment is purchased and, to the extent attributable to the purchased assignment, shall be payable to the RL Lender purchasing same from and after such date of purchase.

          (d) Subject to and upon the terms and conditions set forth herein, each Lender with a Term Loan Commitment severally agrees to make a term loan or term loans (each, a “Term Loan” and, collectively, the “Term Loans”) to the Borrower, which Term Loans:

     (i) shall be incurred pursuant to a single drawing on the Fourth Restatement Effective Date;

     (ii) may, at the option of the Borrower, be incurred and maintained as, and/or converted into, Reference Rate Loans or Eurodollar Loans, provided that all Term Loans comprising the same Borrowing shall, unless otherwise specifically provided herein, consist entirely of Term Loans of the same Type; and

     (iii) shall be made by each such Lender in that aggregate principal amount which equals the Term Loan Commitment of such Lender on the Fourth Restatement Effective Date (before giving effect to the termination thereof on such date pursuant to Section 3.03(c)).

Once repaid, Term Loans incurred hereunder may not be reborrowed.

          1.02 Minimum Amount of Each Borrowing; Maximum Number of Borrowings. The aggregate principal amount of each Borrowing of Loans under a respective Tranche shall not be less than the applicable Minimum Borrowing Amount with respect thereto (except that Mandatory Borrowings shall be made in the amounts required by Section 1.01(c)). More than one Borrowing may be incurred on any date; provided that at no time shall there be outstanding more than twenty Borrowings of Eurodollar Loans in the aggregate for all Tranches of Loans under this Agreement.

          1.03 Notice of Borrowing of Committed Loans. (a) Whenever the Borrower desires to incur (x) Eurodollar Loans hereunder, the Borrower shall give the Administrative Agent at the Administrative Agent’s Office at least three Business Days’ prior notice of each Eurodollar Loan to be incurred hereunder and (y) Reference Rate Loans hereunder (excluding Swingline Loans and Revolving Loans made pursuant to a Mandatory Borrowing), the Borrower shall give the Administrative Agent at the Administrative Agent’s Office at least one Business Day’s prior notice of each Reference Rate Loan to be incurred hereunder, provided that (in each case) any such notice shall be deemed to have been given on a certain day only if given before 11:00 A.M. (New York City time) on such day. Each such notice (each, together with each notice of a Borrowing of Swingline Loans pursuant to Section 1.03(b), a “Notice of Borrowing”), shall be irrevocable and shall be in writing, or by telephone promptly confirmed in writing, appropriately completed to specify: (i) the aggregate principal amount of the Loans to be

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incurred pursuant to such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day), (iii) whether the Loans being incurred pursuant to such Borrowing shall constitute Term Loans or Revolving Loans, and (iv) whether the Loans being incurred pursuant to such Borrowing are to be initially maintained as Reference Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be applicable thereto. The Administrative Agent shall promptly give each Lender which is required to make Loans of the Tranche specified in the respective Notice of Borrowing, notice of such proposed Borrowing, of such Lender’s proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Notice of Borrowing.

          (b) Whenever the Borrower desires to incur Swingline Loans hereunder, it shall give the Swingline Lender at the Administrative Agent’s Office written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Swingline Loans prior to 11:00 A.M. (New York time) on the date of such Borrowing. Each such notice shall be irrevocable and shall specify (i) the aggregate principal amount of the Swingline Loans to be made pursuant to such Borrowing and (ii) the date of Borrowing (which shall be a Business Day).

          (c) Mandatory Borrowings shall be made upon the notice specified in Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set forth in such Section.

          (d) Without in any way limiting the obligation of the Borrower to confirm in writing any notice it may give hereunder by telephone, the Administrative Agent may act prior to receipt of written confirmation without liability upon the basis of such telephonic notice, believed by the Administrative Agent in good faith to be from an Authorized Officer of the Borrower. In each such case, the Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of any such telephonic notice.

          1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York time) on the date of each Borrowing (including Mandatory Borrowings), each Lender with a Commitment under the respective Tranche will make available its pro rata portion, if any, of each Borrowing requested to be made on such date in the manner provided in Section 1.04(b) below.

          (b) Each Lender with a Commitment under the respective Tranche shall make available all amounts it is to fund under any Borrowing in U.S. Dollars and immediately available funds to the Administrative Agent at the Administrative Agent’s Office and the Administrative Agent will (except in the case of Mandatory Borrowings) make available to the Borrower by depositing to its account at the Administrative Agent’s Office the aggregate of the amounts so made available in U.S. Dollars and the type of funds received. Unless the Administrative Agent shall have been notified by any Lender prior to the date of any such Borrowing that such Lender does not intend to make available to the Administrative Agent its portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the

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Administrative Agent by such Lender and the Administrative Agent has made available same to the Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds Rate or (y) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Section 1.08, for the respective Loans.

          (c) Nothing in this Section 1.04 shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder.

          1.05 Notes; Register. (a) The Borrower’s obligation to pay the principal of, and interest on, the Loans made by each Lender shall be set forth in the Register maintained by the Administrative Agent pursuant to Section 12.04(f) and, subject to the provisions of Section 1.05(f), shall be evidenced (i) if Term Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit A-1, with blanks appropriately completed in conformity herewith (each, a “Term Note” and, collectively, the “Term Notes”), (ii) if Revolving Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit A-2 with blanks appropriately completed in conformity herewith (each, a “Revolving Note” and, collectively, the “Revolving Notes”) and (iii) if Swingline Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit A-3 with blanks appropriately completed in conformity herewith (the “Swingline Note” and, together with the Term Notes and the Revolving Notes, each, a “Note” and, collectively, the “Notes”).

          (b) The Term Note issued to each Lender with a Term Loan Commitment or outstanding Term Loans shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Fourth Restatement Effective Date (or, in the case of any Term Note issued after the Fourth Restatement Effective Date, the date of issuance thereof), (iii) be in a stated principal amount equal to the Term Loan Commitment of such Lender on the date of issuance thereof (or, if issued after the termination of such Term Loan Commitment, in a stated principal amount equal to the outstanding principal amount of the Term Loans of such Lender on the date of the issuance thereof) and be payable in the principal amount of the Term Loans evidenced thereby from time to time, (iv) mature on the Term Loan Maturity Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in respect of the Reference Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary repayment as provided in Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement and the other Credit Documents.

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          (c) The Revolving Note issued to each Lender with a Revolving Loan Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Fourth Restatement Effective Date (or, in the case of any Revolving Note issued after the Fourth Restatement Effective Date, the date of issuance thereof), (iii) be in a stated principal amount equal to the Revolving Loan Commitment of such Lender on the date of issuance thereof (or, if issued after the termination of such Revolving Loan Commitment, in a stated principal amount equal to the outstanding principal amount of the Revolving Loans of such Lender on the date of the issuance thereof) and be payable in the principal amount of the Revolving Loans evidenced thereby from time to time, (iv) mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in respect of the Reference Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary repayment as provided in Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement and the other Credit Documents.

          (d) The Swingline Note issued to the Swingline Lender shall (i) be executed by the Borrower, (ii) be payable to the Swingline Lender or its registered assigns and be dated the Fourth Restatement Effective Date (or, in the case of any Swingline Note issued after the Fourth Restatement Effective Date, the date of issuance thereof), (iii) be in a stated principal amount equal to the Swingline Commitment of the Swingline Lender on the date of issuance thereof (or, if issued after the termination of such Swingline Commitment, in a stated principal amount equal to the outstanding principal amount of the Swingline Loans of the Swingline Lender on the date of the issuance thereof) and be payable in the principal amount of the Swingline Loans evidenced thereby from time to time, (iv) mature on the Swingline Maturity Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in respect of the Reference Rate Loans evidenced thereby, (vi) be subject to voluntary repayment as provided in Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement and the other Credit Documents.

          (e) Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and will prior to any transfer of its Note endorse on the reverse side thereof the outstanding principal amount of Loans evidenced thereby. Failure to make any such notation or any error in any such notation shall not affect the Borrower’s obligations in respect of such Loans.

          (f) Notwithstanding anything to the contrary contained above or elsewhere in this Agreement, Notes shall only be delivered to Lenders that at any time specifically request the delivery of such Notes. No failure of any Lender to request or obtain a Note evidencing its Loans to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay the Loans (and all related Obligations) which would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the various Credit Documents. Any Lender that does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations otherwise described in preceding clause (e). At any time when any Lender requests the delivery of a Note to evidence any of its Loans, the Borrower shall promptly execute and deliver to the respective Lender the requested Note or Notes in the appropriate amount or amounts to evidence such Loans.

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          1.06 Conversions. The Borrower shall have the option to convert on any Business Day all or a portion equal to at least the applicable Minimum Borrowing Amount of the outstanding principal amount of Loans under a given Tranche of one Type into a Borrowing or Borrowings of Loans under such Tranche of another Type; provided that (i) no partial conversion of Eurodollar Loans shall reduce the outstanding principal amount of Eurodollar Loans made pursuant to a single Borrowing to less than the applicable Minimum Borrowing Amount, (ii) Reference Rate Loans may only be converted into Eurodollar Loans if no Event of Default is in existence on the date of the conversion and (iii) Borrowings resulting from conversions pursuant to this Section 1.06 shall be limited in number as provided in Section 1.02. Each such conversion shall be effected by the Borrower by giving the Administrative Agent at the Administrative Agent’s Office prior to 11:00 A.M. (New York time) at least three Business Days’ (or one Business Day’s in the case of a conversion into Reference Rate Loans) prior written notice (or telephonic notice promptly confirmed in writing) (each, a “Notice of Conversion”) specifying the Loans of a given Tranche to be so converted, the Type of Loans to be converted into and, if to be converted into Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall give each Lender notice as promptly as practicable of any such proposed conversion affecting any of its Loans.

          1.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving Loans under this Agreement shall be loaned by the Lenders pro rata on the basis of their respective Term Loan Commitments or Revolving Loan Commitments, as the case may be. It is understood that no Lender shall be responsible for any default by any other Lender in its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder.

          1.08 Interest. (a) The unpaid principal amount of each Reference Rate Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum which shall at all times be the Applicable Margin plus the Reference Rate, in each case as in effect from time to time.

          (b) The unpaid principal amount of each Eurodollar Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum which shall at all times be the Applicable Margin plus the relevant Eurodollar Rate.

          (c) Overdue principal and, to the extent permitted by law, overdue interest in respect of each Loan under a given Tranche shall, in each case, bear interest at a rate per annum equal to the Reference Rate in effect from time to time plus the sum of (i) 2% and (ii) the Applicable Margin for Loans of the respective Tranche maintained as Reference Rate Loans; provided that each Eurodollar Loan shall bear interest after maturity (whether by acceleration or otherwise) until the end of the Interest Period then applicable thereto at a rate per annum equal to 2% in excess of the rate of interest applicable thereto at maturity. All other overdue amounts payable hereunder and under any other Credit Document shall bear interest at a rate per annum equal to the rate which is 2% in excess of the rate applicable to Revolving Loans that are maintained as Reference Rate Loans from time to time. Interest that accrues under this Section 1.08(c) shall be payable on demand.

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          (d) Interest on each Loan shall accrue from and including the date of any Borrowing to but excluding the date of any repayment thereof and shall be payable (i) in respect of each Reference Rate Loan, quarterly in arrears on each Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three-month intervals after the first day of such Interest Period, and on any prepayment (on the amount prepaid) and (iii) in respect of each Loan, at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

          (e) All computations of interest hereunder shall be made in accordance with Section 12.07(b).

          (f) The Administrative Agent, upon determining the interest rate for any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify the Borrower and the Lenders thereof.

          1.09 Interest Periods. At the time the Borrower gives a Notice of Borrowing or Notice of Conversion in respect of the making of, or conversion into, a Borrowing of Eurodollar Loans (in the case of the initial Interest Period applicable thereto) or prior to 11:00 A.M. (New York time) on the third Business Day prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans, it shall have the right to elect by giving the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of the Borrower, be a one, two, three or six month period. Notwithstanding anything to the contrary contained above:

     (i) the initial Interest Period for any Borrowing of Eurodollar Loans shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of Reference Rate Loans) and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires;

     (ii) if any Interest Period relating to a Borrowing of Eurodollar Loans begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month;

     (iii) if any Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, provided that if any Interest Period in respect of a Eurodollar Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;

     (iv) no Interest Period in respect of any Borrowing of any Tranche of Loans shall be selected which extends beyond the Maturity Date for such Tranche of Loans; and

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     (v) no Interest Period in respect of any Borrowing of Term Loans shall be selected which extends beyond any date upon which a mandatory repayment of such Term Loans will be required to be made under Section 4.02(b), if the aggregate principal amount of such Term Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal amount of such Term Loans then outstanding less the aggregate amount of such required repayment.

          Notwithstanding the foregoing, if an Event of Default is in existence at the time any Interest Period in respect of any Eurodollar Loans is to expire, such Eurodollar Loans may not be continued as Eurodollar Loans but instead shall be automatically converted on the last day of such Interest Period into Reference Rate Loans. If upon the expiration of any Interest Period in respect of Eurodollar Loans, the Borrower has failed to elect a new Interest Period to be applicable thereto as provided above, the Borrower shall be deemed to have elected to convert such Borrowing into a Borrowing of Reference Rate Loans effective as of the expiration date of such current Interest Period.

          1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in the case of clause (i) below, the Administrative Agent or (y) in the case of clauses (ii) and (iii) below, any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto):

     (i) on any date for determining the Eurodollar Rate for any Interest Period that, by reason of any changes arising on or after the Fourth Restatement Effective Date affecting the interbank Eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar Rate; or

     (ii) at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Eurodollar Loans because of (x) any change since the Fourth Restatement Effective Date in any applicable law, governmental rule, regulation, guideline or order (or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline or order) such as, for example, but not limited to, (A) a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurodollar Rate or (B) a change in the basis of taxation of payments to a Lender of the principal of or interest on the Loans or any other amount payable hereunder (except for changes in the rate of tax on, or determined by reference to, the net income or net profits of such Lender imposed by the jurisdiction in which its principal office or applicable lending office is located) and/or (y) other circumstances affecting the interbank Eurodollar market; or

     (iii) at any time, that the making or continuance of any Loan (other than Reference Rate Loans) has become unlawful by compliance by such Lender in good faith with any law, governmental rule, regulation, guideline or order (or would conflict with any such governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or, in the case of a Eurodollar Loan, has become impracticable as a result of a contingency occurring after

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the Fourth Restatement Effective Date which materially and adversely affects the interbank Eurodollar market;

then, and in any such event, such Lender (or the Administrative Agent, in the case of clause (i) above) shall on such date give notice (if by telephone confirmed in writing) to the Borrower and to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower with respect to Eurodollar Loans which have not yet been incurred shall be deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to such Lender, upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (a written notice as to the additional amounts owed to such Lender, showing in reasonable detail the basis for the calculation thereof, submitted to the Borrower by such Lender shall, absent manifest error, be final and conclusive and binding upon all parties hereto) and (z) in the case of clause (iii) above, the Borrower shall take one of the actions specified in Section 1.10(b) as promptly as possible and, in any event, within the time period required by law.

          (b) At any time that any Eurodollar Loan is affected by the circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) shall) either (i) if the affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof as promptly as practicable after the Borrower was notified by a Lender pursuant to Section 1.10(a)(ii) or (iii), or (ii) if the affected Eurodollar Loan is then outstanding, upon at least three Business Days’ notice to the Administrative Agent, require the affected Lender to convert each such Eurodollar Loan into a Reference Rate Loan; provided that if more than one Lender is affected in a similar manner at any time, then all such similarly affected Lenders must be treated the same pursuant to this Section 1.10(b).

          (c) If after the Fourth Restatement Effective Date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by a Lender or its parent with any request or directive made or adopted after the Fourth Restatement Effective Date regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender’s or its parent’s capital or assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that which such Lender or its parent could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender’s or its parent’s policies with respect to capital adequacy), then from time to time, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or

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amounts as will compensate such Lender or its parent for such reduction. Each Lender, upon determining in good faith that any additional amounts will be payable pursuant to this Section 1.10(c), will give prompt written notice thereof to the Borrower, which notice shall set forth in reasonable detail the basis of the calculation of such additional amounts, although the failure to give any such notice shall not, subject to Section 1.15, release or diminish any of the Borrower’s obligations to pay additional amounts pursuant to this Section 1.10(c) upon receipt of such notice.

          1.11 Compensation. The Borrower shall compensate each Lender, upon its written request (which request shall set forth in reasonable detail the basis for requesting such compensation), for all reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Eurodollar Loans but excluding any loss of anticipated profit with respect to such Loans) which such Lender may sustain: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10); (ii) if any repayment or conversion of any of its Eurodollar Loans occurs on a date which is not the last day of an Interest Period applicable thereto; (iii) if any prepayment of any of its Eurodollar Loans is not made on any date specified in a notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any other default by the Borrower to repay its Eurodollar Loans when required by the terms of this Agreement or (y) an election made pursuant to Section 1.10(b). Calculation of all amounts payable to a Lender under this Section 1.11 in respect of Eurodollar Loans shall be made as though that Lender had actually funded its relevant Eurodollar Loan through the purchase of a Eurodollar deposit bearing interest at the Eurodollar Rate in an amount equal to the amount of that Loan, having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of that Lender to a domestic office of that Lender in the United States of America; provided, however, that each Lender may fund each of its Eurodollar Loans in any manner it sees fit and the foregoing assumption shall be utilized only for the calculation of amounts payable under this Section 1.11.

          1.12 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or (iii), 2.05 or 4.04 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event; provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of any such Section. Nothing in this Section 1.12 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Section 1.10, 2.05 or 4.04.

          1.13 [RESERVED]

          1.14 Replacement of Lenders. If (x) any Lender becomes a Defaulting Lender or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings, (y) any Lender refuses to give timely consent to proposed changes, waivers, discharges or terminations with

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respect to this Agreement which have been approved by the Required Lenders as, and to the extent, provided in Section 12.12(b), or (z) any Lender is owed increased costs under Section 1.10(a) or (c), Section 2.05 or Section 4.04 which in the judgment of the Borrower are material in amount and which are not otherwise requested generally by the other Lenders, the Borrower shall have the right, if no Event of Default then exists and, in the case of a Lender described in clause (z) above, such Lender has not withdrawn its request for such compensation or changed its applicable lending office with the effect of eliminating or substantially decreasing (to a level which in the judgment of the Borrower is not material) such increased cost, to replace such Lender (the “Replaced Lender”) with one or more other Eligible Transferee or Transferees (collectively, the “Replacement Lender”) reasonably acceptable to the Administrative Agent and, in the case of the replacement of a Replaced Lender with a Revolving Loan Commitment (and/or related Obligations), each Significant Letter of Credit Issuer, provided that (i) at the time of any replacement pursuant to this Section 1.14, the Replacement Lender shall enter into one or more Assignment Agreements pursuant to which the Replacement Lender shall acquire all of the Commitment and outstanding Loans of, and participations in Letters of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x) the Replaced Lender in respect thereof an amount equal to the sum of (a) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Replaced Lender, (b) an amount equal to such Replaced Lender’s participations in Unpaid Drawings that have been funded by such Replaced Lender, together with all then accrued but unpaid interest with respect thereto at such time, and (c) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to Section 3.01 hereof and (y) the appropriate Letter of Credit Issuer an amount equal to such Replaced Lender’s RL Percentage of any Unpaid Drawing not funded by such Replaced Lender and (ii) all Obligations of the Borrower owing to the Replaced Lender (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement. Upon the execution of the respective assignment documentation, the payment of amounts referred to in clauses (i) and (ii) above and, if so requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note executed by the Borrower (if any), the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions under this Agreement, which shall survive as to such Replaced Lender.

          1.15 Notice of Certain Costs. Notwithstanding anything in this Agreement to the contrary, to the extent any notice required by Section 1.10 or 2.05 is given by any Lender more than 180 days after the occurrence of the event giving rise to the additional cost, reduction in amounts or other additional amounts of the type described in such Section, such Lender shall not be entitled to compensation under Section 1.10 or Section 2.05, as the case may be, for any such amounts incurred or accruing prior to the giving of such notice to the Borrower.

          1.16 Incremental RL Commitments. (a) The Borrower shall have the right, without requiring the consent of any of the Lenders, to request at any time and from time to time after the Fourth Restatement Effective Date so long as no Default or Event Default has occurred and is continuing, that one or more Lenders (and/or one or more other Persons which are Eligible Transferees and which will become Lenders as provided below) satisfactory to the Administrative Agent (with such consent not to be unreasonably withheld) provide Incremental RL Commitments and, subject to the applicable terms and conditions contained in this

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Agreement, make Revolving Loans pursuant thereto; it being understood and agreed, however, that (i) until such time, if any, as such Lender has agreed in its sole discretion to provide an Incremental RL Commitment and executed and delivered to the Administrative Agent an Incremental RL Commitment Agreement in respect thereof as provided in clause (b) of this Section 1.16, such Lender shall not be obligated to fund any Revolving Loans in excess of its Revolving Loan Commitment as in effect prior to giving effect to such Incremental RL Commitment provided pursuant to this Section 1.16, (ii) any Lender (including any Eligible Transferee who will become a Lender) may so provide an Incremental RL Commitment without the consent of any other Lender, (iii) each provision of Incremental RL Commitments on a given date pursuant to this Section 1.16 shall be in a minimum aggregate amount (for all Lenders (including any Eligible Transferee who will become a Lender)) of at least $20,000,000, (iv) the aggregate amount of all Incremental RL Commitments provided pursuant to this Section 1.16 shall not exceed $250,000,000, (v) all Revolving Loans made pursuant to an Incremental RL Commitment (and all interest, fees and other amounts payable thereon) shall be Obligations under this Agreement and the other applicable Credit Documents and shall be secured by the Security Documents, and guaranteed under the Subsidiaries Guaranty, on a pari passu basis with all other Obligations secured by the Security Documents and guaranteed under the Subsidiaries Guaranty and (vi) all actions taken by the Borrowers pursuant to this Section 1.16 shall be done in coordination with the Administrative Agent.

          (b) At the time of the provision of Incremental RL Commitments pursuant to this Section 1.16, the Borrower, the Administrative Agent and each such Lender or other Eligible Transferee which agrees to provide an Incremental RL Commitment (each, an “Incremental RL Lender”) shall execute and deliver to the Administrative Agent an Incremental RL Commitment Agreement, with the effectiveness of such Incremental RL Lender’s Incremental RL Commitment to occur on the date set forth in such Incremental RL Commitment Agreement, which date in any event shall be no earlier than the date on which (w) all fees required to be paid in connection therewith at the time of such effectiveness shall have been paid (including, without limitation, any agreed upon up-front or arrangement fees), (x) all Incremental Commitment Requirements are satisfied, (y) all other conditions set forth in this Section 1.16 shall have been satisfied, and (z) all other conditions precedent that may be set forth in such Incremental RL Commitment Agreement shall have been satisfied. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Incremental RL Commitment Agreement, and at such time, (i) the Total Revolving Loan Commitment under, and for all purposes of, this Agreement shall be increased by the aggregate amount of such Incremental RL Commitments, (ii) Annex I shall be deemed modified to reflect the revised Revolving Loan Commitments of the affected Lenders and (iii) to the extent requested by any Incremental RL Lender, Revolving Notes will be issued, at the Borrower’s expense, to such Incremental RL Lender in conformity with the requirements of Section 1.05.

          (c) At the time of any provision of Incremental RL Commitments pursuant to this Section 1.16, the Borrower shall, in coordination with the Administrative Agent, repay outstanding Revolving Loans of certain of the RL Lenders, and incur additional Revolving Loans from certain other RL Lenders (including the Incremental RL Lenders), in each case to the extent necessary so that all of the RL Lenders participate in each outstanding Borrowing of Revolving Loans pro rata on the basis of their respective Revolving Loan Commitments (after giving effect to any increase in the Total Revolving Loan Commitment pursuant to this Section 1.16) and with

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the Borrower being obligated to pay to the respective RL Lenders any costs of the type referred to in Section 1.11 in connection with any such repayment and/or Borrowing.

          SECTION 2. Letters of Credit.

          2.01 Letters of Credit. (a) Subject to and upon the terms and conditions set forth herein, the Borrower may request that a Letter of Credit Issuer issue, at any time and from time to time on or after the Original Effective Date and prior to the L/C Termination Date, for the account of the Borrower and in support of any Permitted Obligations, to replace Existing Letters of Credit, to effect Permitted Litigation Bonding or in support of such other obligations of the Borrower and/or any of its Subsidiaries as are acceptable to the Administrative Agent, an irrevocable standby letter of credit or letters of credit in such form as may be approved by such Letter of Credit Issuer and the Administrative Agent, acting reasonably, and, subject to and upon the terms and conditions set forth in this Agreement, the Letter of Credit Issuer will issue the Letters of Credit so requested to be issued.

          (b) Notwithstanding the foregoing (i) no Letter of Credit shall be issued (x) the Stated Amount of which, when added to the Letter of Credit Outstandings at such time would exceed, when added to the sum of the aggregate principal amount of all Revolving Loans and all Swingline Loans then outstanding, the Total Revolving Loan Commitment at such time or (y) with an expiration date beyond the L/C Termination Date, provided that, at the request of the Borrower, a Letter of Credit Issuer may in its sole discretion permit any Letter of Credit to have an expiration date after the L/C Termination Date by giving written notice of such permission to the Borrower, so long as (x) upon the earlier to occur of (I) the date of any request of the respective Letter of Credit Issuer and (II) the 91st day preceding the L/C Termination Date, the Borrower shall pay to the respective Letter of Credit Issuer an amount of cash and/or Marketable Investments acceptable to such Letter of Credit Issuer equal to 105% of the Letter of Credit Outstandings with respect to such Letter of Credit, such cash and Marketable Investments to be held as security for the obligations of the Borrower in respect of such Letter of Credit in a cash collateral account, and pursuant to cash collateral arrangements, satisfactory to such Letter of Credit Issuer and (y) the aggregate Stated Amount of all Letters of Credit at any time having an expiration date after the L/C Termination Date shall not exceed $15,000,000; (ii) each Letter of Credit shall be denominated in U.S. Dollars or an Approved Alternate Currency; and (iii) no Letter of Credit shall be issued by a Letter of Credit Issuer after it has received a notice in writing from the Required Lenders that one or more of the applicable conditions specified in Section 5 are not then satisfied.

          (c) Annex III hereto contains a description of all letters of credit issued by any Lender for the account of RJRTH pursuant to the Third Amended and Restated Credit Agreement and outstanding on the Fourth Restatement Effective Date (and setting forth, with respect to each such letter of credit, (i) the name of the issuing lender, (ii) the letter of credit number, (iii) the name(s) of the account party or account parties, (iv) the stated amount (which shall be in U.S. Dollars or an Approved Alternate Currency), (v) the name of the beneficiary and (vi) the expiry date). Each such letter of credit, including any extension or renewal thereof (each, as amended from time to time in accordance with the terms thereof and hereof, an “Existing Letter of Credit”) shall constitute a “Letter of Credit” issued for the account of the Borrower for all purposes of this Agreement, issued, for purposes of Section 2.03(a), on the

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Fourth Restatement Effective Date and the respective issuer(s) thereof shall constitute the “Letter of Credit Issuer(s)” with respect to such Letter of Credit for all purposes of this Agreement.

          2.02 Letter of Credit Requests. Whenever the Borrower desires that a Letter of Credit be issued for its account, it shall give the Administrative Agent and the Letter of Credit Issuer that is to issue same at least five Business Days’ (or such lesser number of days as may be agreed to by the relevant Letter of Credit Issuer) written notice thereof. Each notice shall be executed by the Borrower and shall be in the form of Exhibit B attached hereto (each, a “Letter of Credit Request”). The Administrative Agent shall promptly transmit copies of each Letter of Credit Request to each RL Lender.

          2.03 Letter of Credit Participations. (a) Immediately upon the issuance by a Letter of Credit Issuer of any Letter of Credit (and on the Fourth Restatement Effective Date, in the case of Existing Letters of Credit), such Letter of Credit Issuer shall be deemed to have sold and transferred to each other RL Lender (each such other RL Lender, in its capacity under this Section 2.03, a “Participant”), and each such Participant shall be deemed irrevocably and unconditionally to have purchased and received from such Letter of Credit Issuer, without recourse or warranty, an undivided interest and participation (each, a “participation”), to the extent of such Participant’s RL Percentage, in such Letter of Credit, each substitute letter of credit, each drawing made thereunder and the obligations of the Borrower under this Agreement with respect thereto, and any security therefor that remains in effect after the Original Effective Date, or guaranty pertaining thereto (although Letter of Credit Fees will be paid directly to the Administrative Agent for the ratable account of the Participants as provided in Section 3.01(c) and the Participants shall have no right to receive any portion of any Facing Fees). Upon any change in the Revolving Loan Commitments of the RL Lenders pursuant to Section 1.14, 1.16 or 12.04, it is hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment to the participations pursuant to this Section 2.03 to reflect the new RL Percentages of the assignor and assignee RL Lender and of all RL Lenders.

          (b) In determining whether to pay under any Letter of Credit, the Letter of Credit Issuer issuing same shall have no obligation relative to the Participants other than to confirm that any documents required to be delivered under such Letter of Credit have been delivered and that they appear to comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by a Letter of Credit Issuer under or in connection with any Letter of Credit issued by it, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for such Letter of Credit Issuer any resulting liability.

          (c) In the event that any Letter of Credit Issuer makes any payment under any Letter of Credit issued by it and the Borrower shall not have reimbursed such amount in full to such Letter of Credit Issuer pursuant to Section 2.04(a), such Letter of Credit Issuer shall promptly notify the Administrative Agent and each Participant of such failure, and each Participant shall promptly and unconditionally pay to the Administrative Agent for the account of such Letter of Credit Issuer, the amount of such Participant’s RL Percentage of such unreimbursed payment in U.S. Dollars and in same day funds; provided, however, that no Participant shall be obligated to pay to the Administrative Agent for the account of such Letter of Credit Issuer its RL Percentage of such unreimbursed amount for any wrongful payment made by such Letter of Credit Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Letter of

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Credit Issuer (as determined by a court of competent jurisdiction in a final and non-appealable decision). If such Letter of Credit Issuer so notifies, prior to 11:00 A.M. (New York time) on any Business Day, any Participant required to fund a payment under a Letter of Credit, such Participant shall make available to the Administrative Agent for the account of such Letter of Credit Issuer such Participant’s RL Percentage of the amount of such payment on such Business Day in same day funds. If and to the extent such Participant shall not have so made its RL Percentage of the amount of such payment available to the Administrative Agent for the account of such Letter of Credit Issuer, such Participant agrees to pay to the Administrative Agent for the account of such Letter of Credit Issuer, forthwith on demand such amount, together with interest thereon for each day from such date until the date such amount is paid to the Administrative Agent for the account of such Letter of Credit Issuer at the overnight Federal Funds Rate. The failure of any Participant to make available to the Administrative Agent for the account of the applicable Letter of Credit Issuer its RL Percentage of any payment under any Letter of Credit shall not relieve any other Participant of its obligation hereunder to make available to the Administrative Agent for the account of such Letter of Credit Issuer its RL Percentage of any payment under any Letter of Credit on the date required, as specified above, but no Participant shall be responsible for the failure of any other Participant to make available to the Administrative Agent such other Participant’s RL Percentage of any such payment.

          (c) Whenever any Letter of Credit Issuer receives a payment in respect of an unpaid reimbursement obligation as to which the Administrative Agent has received for the account of such Letter of Credit Issuer any payments from the Participants pursuant to the preceding clause (c), such Letter of Credit Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each Participant which has paid its RL Percentage of such reimbursement obligation, in U.S. Dollars and in same day funds, an amount equal to such Participant’s share (based upon the proportionate aggregate amount originally funded by such Participant to the aggregate amount funded by all Participants) of the principal amount of such reimbursement obligation and interest thereon accruing after the purchase of the respective participations.

          (d) The obligations of the Participants to make payments to the Administrative Agent for the account of a Letter of Credit Issuer with respect to Letters of Credit shall be irrevocable and not subject to counterclaim, set-off or other defense or any other qualification or exception whatsoever (except as expressly provided in Section 2.03(c)) and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances:

     (i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents;

     (ii) the existence of any claim, set-off, defense or other right which the Borrower may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, any Letter of Credit Issuer, any Lender, or other

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Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower and the beneficiary named in any such Letter of Credit);

     (iii) any draft, certificate or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

     (iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents;

     (v) the occurrence of any Default or Event of Default; or

     (vi) the failure of any condition precedent set forth in Section 5 hereof to have been satisfied at the time of the issuance of any Letter of Credit, unless the applicable Letter of Credit Issuer shall have received a notice in writing to such effect from the Required Lenders pursuant to Section 2.01(b)(iv) hereof prior to the issuance of such Letter of Credit.

          2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower hereby agrees to reimburse the respective Letter of Credit Issuer, by making payment to the Administrative Agent in U.S. Dollars and immediately available funds at the Administrative Agent’s Office, for any payment or disbursement made by such Letter of Credit Issuer under any Letter of Credit issued by it (each such amount so paid until reimbursed, an “Unpaid Drawing”) promptly after, and in any event within one Business Day after the date of, notice given by such Letter of Credit Issuer to the Borrower of such payment (which notice each Letter of Credit Issuer hereby agrees to give promptly after the making of any payment or disbursement under a Letter of Credit, provided that no such notice shall be required to be given if a Default or an Event of Default under Section 9.05 shall have occurred and be continuing, in which case the Unpaid Drawing shall be due and payable immediately without presentment, demand, protest or notice of any kind (all of which are hereby waived by the Borrower)), with interest on the amount so paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or disbursement, from and including the date paid or disbursed to but excluding the date such Letter of Credit Issuer is reimbursed therefor, at a rate per annum which shall be the Applicable Margin for Revolving Loans maintained as Reference Rate Loans plus the Reference Rate as in effect from time to time (plus an additional 2% per annum if not reimbursed by the second Business Day following any such notice of payment or disbursement), such interest to be payable on demand. Notwithstanding the foregoing, to the extent that a Letter of Credit Issuer of a Letter of Credit denominated in a currency other than U.S. Dollars has agreed in writing to such arrangement at the time of the issuance of such Letter of Credit, the Borrower shall reimburse any Drawing thereunder in the currency in which such Letter of Credit is denominated; provided that (x) if any such Drawing is made at a time when there exists an Event of Default or (y) if such reimbursement is not made by the close of business two Business Days after the Borrower has received notice of such Drawing, then, in either such case, such reimbursement shall instead be made in U.S. Dollars and in immediately available funds (with the amount of such reimbursement to be calculated as provided in Section 12.07(c)).

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          (b) The Borrower’s obligations under this Section 2.04 to reimburse each Letter of Credit Issuer with respect to Unpaid Drawings (including, in each case, interest thereon) issued by it shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower or any other Person may have or have had against any Lender (including in its capacity as a Letter of Credit Issuer or as a Participant), including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit (each, a “Drawing”) to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such Drawing; provided that the Borrower shall not be obligated to reimburse the respective Letter of Credit Issuer for any wrongful payment made by such Letter of Credit Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence as determined by a court of competent jurisdiction on the part of such Letter of Credit Issuer.

          2.05 Increased Costs. If after the Fourth Restatement Effective Date, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or actual compliance by any Letter of Credit Issuer or any Participant with any request or directive made or adopted after the Fourth Restatement Effective Date (whether or not having the force of law), by any such authority, central bank or comparable agency shall either (i) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against Letters of Credit issued by such Letter of Credit Issuer, or such Participant’s participation therein, or (ii) impose on any Letter of Credit Issuer or any Participant any other conditions affecting its obligations under this Agreement in respect of Letters of Credit or participations therein or any Letter of Credit or such Participant’s participation therein; and the result of any of the foregoing is to increase the cost to such Letter of Credit Issuer or such Participant of issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum received or receivable by such Letter of Credit Issuer or such Participant hereunder in respect of Letters of Credit or participations therein, then, upon demand to the Borrower by such Letter of Credit Issuer or such Participant, as the case may be (a copy of which notice shall be sent by such Letter of Credit Issuer or such Participant to the Administrative Agent), the Borrower shall pay to such Letter of Credit Issuer or such Participant such additional amount or amounts as will compensate such Letter of Credit Issuer or such Participant for such increased cost or reduction. A certificate submitted to the Borrower by such Letter of Credit Issuer or such Participant, as the case may be (a copy of which certificate shall be sent by such Letter of Credit Issuer or such Participant to the Administrative Agent), setting forth in reasonable detail the basis for the determination of such additional amount or amounts necessary to compensate such Letter of Credit Issuer or such Participant as aforesaid shall be conclusive and binding on the Borrower absent manifest error, although the failure to deliver any such certificate shall not, subject to Section 1.15, release or diminish any of the Borrower’s obligations to pay additional amounts pursuant to this Section 2.05 upon receipt of such certificate.

          2.06 Indemnification; Nature of Letter of Credit Issuers’ Duties. (a) In addition to its other obligations under this Section 2, the Borrower hereby agrees to protect, indemnify, pay and save each of the Letter of Credit Issuers harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees but excluding those taxes excluded from the definition of Taxes in

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Section 4.04) that any such Letter of Credit Issuer may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of any Letter of Credit Issuer to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority (all such acts or omissions, herein called “Government Acts”).

          (b) As between the Borrower and the Letter of Credit Issuers, the Borrower shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof. Except as expressly provided in Section 2.06(e), the Letter of Credit Issuers shall not be responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon a Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a Letter of Credit or of the proceeds thereof; and (vii) for any consequences arising from causes beyond the control of the Letter of Credit Issuers, including, without limitation, any Government Acts. None of the above shall affect, impair, or prevent the vesting of any of the Letter of Credit Issuers’ rights or powers hereunder.

          (c) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by any Letter of Credit Issuer, under or in connection with any Letter of Credit or the related certificates, if taken or omitted in good faith, shall not put such Letter of Credit Issuer under any resulting liability to the Borrower. It is the intention of the parties that this Agreement shall be construed and applied to protect and indemnify the Letter of Credit Issuers against any and all risks involved in the issuance of the Letters of Credit arising from any present or future Government Acts. The Letter of Credit Issuers shall not, in any way, be liable for any failure by the Letter of Credit Issuers or anyone else to pay any Drawing under any Letter of Credit as a result of any Government Acts or any other cause beyond the control of the Letter of Credit Issuers.

          (d) Nothing in this Section 2.06 is intended to limit the reimbursement obligation of the Borrower contained in Section 2.04 hereof. The obligations of the Borrower under this Section 2.06 shall survive the termination of this Agreement. No act or omission of any current or prior beneficiary of a Letter of Credit shall in any way affect or impair the rights of the Letter of Credit Issuers to enforce any right, power or benefit under this Agreement.

          (e) Notwithstanding anything to the contrary contained in this Section 2.06, (i) the Borrower shall have no obligation to indemnify any Letter of Credit Issuer in respect of any liability incurred by such Letter of Credit Issuer arising solely out of the gross negligence or willful misconduct of such Letter of Credit Issuer (as determined by a court of competent jurisdiction in a final and non-appealable decision) and (ii) the Borrower shall have a claim

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against any Letter of Credit Issuer and such Letter of Credit Issuer shall be liable to the Borrower to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by the Borrower which the Borrower proves were caused by (x) such Letter of Credit Issuer’s willful misconduct or gross negligence (as determined by a court of competent jurisdiction in a final and non-appealable decision) in determining whether the documents presented under its Letter of Credit complied with the terms of such Letter of Credit or (y) such Letter of Credit Issuer’s willful or grossly negligent failure to pay under its Letter of Credit after presentation to it of a drawing certificate and any other documents strictly complying with the terms and conditions of such Letter of Credit (as determined by a court of competent jurisdiction in a final and non-appealable decision).

          SECTION 3. Fees; Commitments.

          3.01 Fees. (a) The Borrower agrees to pay the Administrative Agent for the account of each Non-Defaulting RL Lender a commitment fee (the “Commitment Fee”) for the period from and including the Fourth Restatement Effective Date to but not including the Revolving Loan Maturity Date or, if earlier, the date upon which the Total Revolving Loan Commitment has been terminated, computed for each day at a rate per annum equal to the Applicable Margin for such day multiplied by the Unutilized Revolving Loan Commitment of such Non-Defaulting RL Lender as in effect from time to time. Such Commitment Fee shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the date upon which the Total Revolving Loan Commitment is terminated.

          (b) The Borrower agrees to pay to the Administrative Agent for the account of the RL Lenders pro rata on the basis of their respective RL Percentages, a fee in respect of each Letter of Credit (the “Letter of Credit Fee”), computed for each day at a rate per annum equal to the Applicable Margin for Revolving Loans maintained as Eurodollar Loans for such day multiplied by the then Stated Amount of such Letter of Credit. Such Letter of Credit Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the date upon which the Total Revolving Loan Commitment is terminated.

          (c) The Borrower agrees to pay to the Administrative Agent for the account of each Letter of Credit Issuer a fee in respect of each Letter of Credit issued by it (the “Facing Fee”) computed for each day at a rate per annum equal to 0.25% (or such lesser percentage as may be agreed by the Borrower and the respective Letter of Credit Issuer in any given case) multiplied by the average daily Stated Amount of such Letter of Credit. Such Facing Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the date upon which the Total Revolving Loan Commitment is terminated.

          (c) The Borrower hereby agrees to pay directly to each Letter of Credit Issuer upon each issuance of, drawing under, and/or amendment of, a Letter of Credit issued by such Letter of Credit Issuer such amount as shall at the time of such issuance, drawing or amendment be the administrative charge which such Letter of Credit Issuer is customarily charging for issuances of, drawings under or amendments of, letters of credit issued by it.

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          (d) The Borrower shall pay to the Administrative Agent for the account of each Agent and each other Lender the fees specified in the accepted commitment letter, or related fee letter, executed by such Agent or such Lender, as the case may be, when and as due.

          (e) All computations of Fees shall be made in accordance with Section 12.07(b).

          3.02 Voluntary Reduction of Revolving Loan Commitments. Upon at least three Business Days’ prior written notice (or telephonic notice confirmed in writing) to the Administrative Agent at the Administrative Agent’s Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right, without premium or penalty, to terminate Revolving Loan Commitments of the RL Lenders, in part or in whole, in an amount equal to the Total Unutilized Revolving Loan Commitment at such time (or, to the extent that at such time there are no Revolving Loans or Swingline Loans outstanding and no Letter of Credit Outstandings, to terminate all Revolving Loan Commitments, in full), provided that (x) any such termination shall apply to proportionately and permanently reduce the Revolving Loan Commitment of each of the RL Lenders and (y) any partial reduction pursuant to this Section 3.02 shall be in the amount of at least $10,000,000.

          3.03 Termination of Commitments. (a) The Total Revolving Loan Commitment shall terminate on the Revolving Loan Maturity Date.

          (b) The Swingline Lender’s Swingline Commitment shall terminate on the Swingline Maturity Date.

          (c) The Total Term Loan Commitment (and the Term Loan Commitment of each Lender) shall terminate in its entirety on the Fourth Restatement Effective Date (after giving effect to the incurrence of Term Loans on such date).

          SECTION 4. Payments.

          4.01 Voluntary Prepayments. The Borrower shall have the right to prepay Loans of a given Tranche in whole or in part from time to time on the following terms and conditions: (i) the Borrower shall give the Administrative Agent at the Administrative Agent’s Office written notice (or telephonic notice promptly confirmed in writing) of its intent to make such prepayment, whether such Loans are Term Loans, Revolving Loans or Swingline Loans, the amount of such prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which notice shall be given by the Borrower no later than (x) in the case of Reference Rate Loans, 11:00 A.M. (New York time) one Business Day prior to, (y) in the case of Eurodollar Loans, 11:00 A.M. (New York time) three Business Days prior to, and (z) in the case of Swingline Loans, 11:00 A.M. (New York time) on, the date of such prepayment and shall promptly be transmitted by the Administrative Agent to each of the relevant Lenders entitled thereto; (ii) each partial prepayment of any Borrowing shall be in an aggregate principal amount of at least $10,000,000, provided that no partial prepayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to an amount less than the applicable Minimum Borrowing Amount for Eurodollar Loans; (iii) each prepayment in respect of any Loans of a given Tranche made pursuant to a given Borrowing

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shall be applied pro rata among such Loans, provided that at the Borrower’s election in connection with any prepayment pursuant to this Section 4.01, such prepayment shall not be applied to any Revolving Loan of a Defaulting Lender at any time when the aggregate amount of Revolving Loans of any Non-Defaulting Lender exceeds such Non-Defaulting Lender’s RL Percentage of all Revolving Loans then outstanding; and (iv) each prepayment of Term Loans pursuant to this Section 4.01 shall be applied (I) first, to reduce the four immediately succeeding Scheduled Repayments (after giving effect to all prior reductions thereto) required to be made after the date of the respective prepayment pursuant to this Section 4.01 in direct order of maturity and (II) second, to the extent in excess thereof, to reduce the then remaining Scheduled Repayments on a pro rata basis (based upon the then remaining principal amount of each such Scheduled Repayment after giving effect to all prior reductions thereto).

          4.02 Mandatory Prepayments. (a) If on any date the sum of the outstanding principal amount of all Revolving Loans and Swingline Loans and the aggregate amount of Letter of Credit Outstandings (all the foregoing, collectively, the “Aggregate RL Outstandings”) exceeds the Total Revolving Commitment as then in effect, the Borrower shall repay on such date the principal of Swingline Loans and, after Swingline Loans have been paid in full, Revolving Loans, in an amount equal to such excess. If, after giving effect to the prepayment of all outstanding Revolving Loans and Swingline Loans, the Aggregate RL Outstandings exceed the Total Revolving Loan Commitment then in effect, the Borrower shall pay to the Administrative Agent an amount in cash equal to such excess and the Administrative Agent shall hold such payment as security for the Obligations of the Borrower hereunder (including, without limitation, obligations in respect of Letter of Credit Outstandings) pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Administrative Agent (which shall permit certain investments in Marketable Investments reasonably satisfactory to the Administrative Agent, until the proceeds are applied to the secured obligations).

          (b) In addition to any other mandatory repayments pursuant to this Section 4.02, on each date set forth below (each, a “Scheduled Repayment Date”), the Borrower shall be required to repay that principal amount of Term Loans, to the extent then outstanding, as is set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Section 4.01 or 4.02(f), a “Scheduled Repayment”):

Scheduled Repayment Date	Amount
The last Business Day of Borrower’s fiscal quarter ending September 30, 2006	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending December 31, 2006	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending March 31, 2007	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending June 30, 2007	$	3,875,000

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Scheduled Repayment Date	Amount
The last Business Day of Borrower’s fiscal quarter ending September 30, 2007	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending December 31, 2007	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending March 31, 2008	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending June 30, 2008	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending September 30, 2008	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending December 31, 2008	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending March 31, 2009	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending June 30, 2009	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending September 30, 2009	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending December 31, 2009	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending March 31, 2010	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending June 30, 2010	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending September 30, 2010	$	3,875,000

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Scheduled Repayment Date	Amount
The last Business Day of Borrower’s fiscal quarter ending December 31, 2010	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending March 31, 2011	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending June 30, 2011	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending September 30, 2011	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending December 31, 2011	$	3,875,000
The last Business Day of Borrower’s fiscal quarter ending March 31, 2012	$	3,875,000
Term Loan Maturity Date	$	1,460,875,000

          (c) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, on each date on or after the Fourth Restatement Effective Date upon which Borrower or any of its Subsidiaries receives any cash proceeds from any issuance or incurrence by Borrower or any of its Subsidiaries of Indebtedness (other than Indebtedness permitted to be incurred pursuant to Section 8.04, except for Additional Non-Acquisition Senior Notes issued pursuant to Section 8.04(k)), an amount equal to 100% of the Net Cash Proceeds of the respective issuance or incurrence of Indebtedness shall be applied on such date as a mandatory repayment of Term Loans in accordance with the requirements of Sections 4.02(f) and (g).

          (d) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, on each Excess Cash Payment Date, an amount equal to the Applicable ECF Percentage of the Excess Cash Flow for the related Excess Cash Payment Period shall be applied as a mandatory repayment of Term Loans in accordance with the requirements of Sections 4.02(f) and (g).

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          (e) In addition to any other mandatory repayments pursuant to this Section 4.02, all then outstanding Loans of a respective Tranche shall be repaid in full on the respective Maturity Date for such Tranche of Loans.

          (f) Each principal repayment of Term Loans made as required by Sections 4.02(c) and (d) shall be applied to reduce the then remaining Scheduled Repayments of Term Loans on a pro rata basis (based upon the then remaining principal amounts of the Scheduled Repayments after giving effect to all prior reductions thereto).

          (g) With respect to each prepayment of Loans required by this Section 4.02, the Borrower may designate the Types of Loans of the respective Tranche which are to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing(s) of the respective Tranche pursuant to which made; provided that: (i) if any prepayment of Eurodollar Loans made pursuant to a single Borrowing under a given Tranche shall reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less than the applicable Minimum Borrowing Amount for such Eurodollar Loans, such Borrowing shall immediately be converted into a Borrowing of Reference Rate Loans under such Tranche; and (ii) each prepayment of any Tranche of Loans made pursuant to a Borrowing shall be applied pro rata among such Tranche of Loans. In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion with a view, but no obligation, to minimize breakage costs owing under Section 1.11.

          4.03 Method and Place of Payment. (a) Except as otherwise specifically provided herein, all payments under this Agreement shall be made to the Administrative Agent for the ratable account of the Lenders entitled thereto, not later than 1:00 P.M. (New York time) on the date when due and shall be made in immediately available funds and in lawful money of the United States of America at the Administrative Agent’s Office, it being understood that written, telex or facsimile notice by the Borrower to the Administrative Agent to make a payment from the funds in the Borrower’s account at the Administrative Agent’s Office shall constitute the making of such payment to the extent of such funds held in such account. The Administrative Agent will thereafter cause to be distributed on the same day (if payment was actually received by the Administrative Agent prior to 2:00 P.M. (New York time) on such day) like funds relating to the payment of principal or interest or Fees ratably to the Lenders entitled thereto. If and to the extent that any such distribution shall not be so made by the Administrative Agent in full on the same day (if payment was actually received by the Administrative Agent prior to 2:00 P.M. (New York time) on such day), the Administrative Agent shall pay to each Lender its ratable amount thereof and each such Lender shall be entitled to receive from the Administrative Agent, upon demand, interest on such amount at the overnight Federal Funds Rate for each day from the date such amount is paid to the Administrative Agent until the date the Administrative Agent pays such amount to such Lender.

          (b) Any payments under this Agreement which are made later than 1:00 P.M. (New York time) shall be deemed to have been made on the next succeeding Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension.

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          4.04 Net Payments. (a) All payments made by the Borrower hereunder will be made without setoff, counterclaim or other defense. The Borrower will pay, prior to the date on which penalties attach thereto, all present and future income, stamp and other taxes, levies, or costs and charges whatsoever imposed, assessed, levied or collected on or in respect of a Loan and/or the recording, registration, notarization or other formalization thereof and/or any payments of principal, interest or other amounts made on or in respect of a Loan (all such taxes, levies, costs and charges being herein collectively called “Taxes”; provided that Taxes shall not include taxes imposed on or measured by the overall net income of that Lender (or any alternative tax imposed generally by any relevant jurisdiction in lieu of a tax on net income) by the United States of America or any political subdivision or taxing authority thereof or therein or taxes on or measured by the overall net income (or any alternative tax imposed generally by any relevant jurisdiction in lieu of a tax on net income) of that Lender by any foreign country or subdivision thereof pursuant to the laws of which such Lender is organized or in which the principal office or applicable lending office of such Lender is located). The Borrower shall also pay such additional amounts equal to increases in taxes payable by that Lender described in the foregoing proviso which increases are attributable to payments made by the Borrower described in the immediately preceding sentence of this Section. Promptly after the date on which payment of any such Tax is due pursuant to applicable law, the Borrower will, at the request of that Lender, furnish to that Lender evidence, in form and substance satisfactory to that Lender, that the Borrower has met its obligation under this Section 4.04. The Borrower will indemnify each Lender against, and reimburse each Lender on demand for, any Taxes, as determined by that Lender in its good faith and reasonable discretion. Such Lender shall provide the Borrower with appropriate receipts for any payments or reimbursements made by the Borrower pursuant to this Section 4.04.

          (b) Each Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for United States federal income tax purposes agrees to provide to the Borrower on or prior to the Fourth Restatement Effective Date, or in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 1.14 or Section 12.04 (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer and such Lender is in compliance with the provisions of this Section 4.04(b)), on the date of such assignment or transfer to such Lender, (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or successor forms) certifying to such Lender’s entitlement to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement or any Note or (ii) if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or W-8BEN (with respect to a complete exemption under an income tax treaty) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit J (any such certificate, a “Section 4.04(b)(ii) Certificate”) and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Lender’s entitlement as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement or under any Note. Each Lender that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, but that is not a corporation (as such term is defined in Section 7701(a)(3) of the Code) for such purposes, agrees to provide to the Borrower on or prior to the Fourth Restatement

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Effective Date, or in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 1.14 or Section 12.04 (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer and such Lender is in compliance with the provisions of this Section 4.04(b)), on the date of such assignment to such Lender, two accurate and complete original signed copies of Internal Revenue Service Form W-9 (or successor form). In addition, each such Lender agrees that from time to time after the Fourth Restatement Effective Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, it will deliver to the Borrower two new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or W-8BEN (with respect to a claim for benefits of an income tax treaty) or Form W-8BEN (with respect to the portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement or any Note, or it shall immediately notify the Borrower and the Administrative Agent of its inability to deliver any such form. Notwithstanding anything to the contrary contained in Section 4.04(a), (x) the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or other similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, fees or other amounts payable hereunder for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for United States federal income tax purposes and which has not provided to the Borrower such forms that establish a complete exemption from such deduction or withholding and (y) the Borrower shall not be obligated pursuant to Section 4.04(a) to pay a Lender in respect of income or similar taxes imposed by the United States or any additional amounts with respect thereto if such Lender has not provided to the Borrower the Internal Revenue Service forms required to be provided to the Borrower pursuant to this Section 4.04(b). Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 4.04, the Borrower agrees to pay additional amounts and to indemnify each Lender in the manner set forth in Section 4.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes after the Fourth Restatement Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of income or similar taxes.

          (c) If the Borrower pays any additional amount under this Section 4.04 to a Lender and such Lender determines in its sole discretion that it has actually received or realized in connection therewith any refund or any reduction of, or credit against, its Tax liabilities in or with respect to the taxable year in which the additional amount is paid (a “Tax Benefit”), such Lender shall pay to the Borrower an amount that the Lender shall, in its sole discretion, determine is equal to the net benefit, after tax, which was obtained by the Lender in such year as a consequence of such Tax Benefit; provided, however, that (i) any Lender may determine, in its sole discretion consistent with the policies of such Lender, whether to seek a Tax Benefit; (ii) any Taxes that are imposed on a Lender as a result of a disallowance or reduction (including through the expiration of any tax credit carryover or carryback of such Lender that otherwise would not have expired) of any Tax Benefit with respect to which such Lender has made a payment to the Borrower pursuant to this Section 4.04(c) shall be treated as a Tax for which the Borrower is obligated to indemnify such Lender pursuant to this Section 4.04 without any

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exclusions or defenses; (iii) subject to Section 12.15, nothing in this Section 4.04(c) shall require the Lender to disclose any confidential information to the Borrower (including, without limitation, its tax returns); and (iv) no Lender shall be required to pay any amounts pursuant to this Section 4.04(c) at any time when a Default or Event of Default exists. If in the reasonable opinion of the Borrower, any amount has been paid to, by or on behalf of any Lender pursuant to this Section 4.04 with respect to Taxes which are not correctly or legally asserted, such Lender will (subject, however, to the immediately succeeding proviso and the limitations described in the immediately preceding sentence) cooperate in good faith with the Borrower in identifying any purported Tax Benefit, provided that the rendering of any such cooperation by such Lender would not cause such Lender to incur any out of pocket expense (which is not otherwise paid in full by Borrower prior to or at the time such expense is incurred).

          SECTION 5. Conditions Precedent.

          5.01 Conditions Precedent to the Fourth Restatement Effective Date. This Agreement shall become effective on the date (the “Fourth Restatement Effective Date”) when each of the following conditions are first satisfied:

     A. Execution; Notes. The Fourth Restatement Execution Date shall have occurred as provided in Section 12.10 and there shall have been delivered to the Administrative Agent for the account of each Lender requesting same the appropriate Note executed by the Borrower in the amount, maturity and as otherwise provided herein.

     B. Officer’s Certificate. The Administrative Agent shall have received certificates, dated the Fourth Restatement Effective Date and signed by an appropriate officer of the Borrower, stating that all of the applicable conditions set forth in Sections 5.01F, G, H, P and S and 5.02 have been satisfied as of such date.

     C. Opinions of Counsel. The Administrative Agent shall have received an opinion, or opinions, in form and substance satisfactory to each Agent, addressed to each of the Lenders and dated the Fourth Restatement Effective Date, from (i) McDara P. Folan III, Senior Vice President, Deputy General Counsel and Secretary of the Borrower, which opinion shall cover the matters contained in Exhibit C-1 hereto, (ii) Womble Carlyle Sandridge & Rice, PLLC, special counsel to the Credit Parties, which opinion shall cover the matters contained in Exhibit C-2 hereto, and (iii) Kilpatrick Stockton LLP, special counsel to the Credit Parties, which opinion shall cover the matters contained in Exhibit C-3 hereto, together with such other opinions, if any, covering such matters as the Agents shall reasonably request, from counsel, and in form and substance, reasonably satisfactory to the Agents.

     D. Company Proceedings. On the Fourth Restatement Effective Date, all Company and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be reasonably satisfactory in form and substance to each Agent, and the Administrative Agent shall have received all information and copies of all certificates, documents and papers, including records of Company proceedings and governmental approvals, if any, which any Agent reasonably may have requested in connection therewith, such

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documents and papers where appropriate to be certified by proper Company or governmental authorities.

     E. Organizational Documentation, etc. The Lenders shall have received copies of the Certificate of Incorporation and By-Laws or other equivalent organizational documents of each Credit Party, certified on or recently prior to the Fourth Restatement Effective Date as true and complete by an appropriate Company officer or Governmental Authority.

     F. Consummation of Transaction. (a) On the Fourth Restatement Effective Date (and concurrently with the initial incurrence of Loans hereunder), (i) all material conditions precedent to the consummation of the Acquisition as set forth in the Acquisition Agreement shall have been satisfied, and not waived, except with the consent of each Agent and (ii) the Acquisition shall have been consummated in accordance with the terms and conditions of the Acquisition Agreement and all applicable law.

     (b) On the Fourth Restatement Effective Date (and prior to or concurrently with the initial incurrence of Loans hereunder), (i) the Borrower shall have received cash proceeds of $1,650,000,000 (calculated before original issue discount, underwriting discounts and commissions) from the issuance by it of a like principal amount of Initial New Senior Notes and (ii) the issuance of the Initial New Senior Notes shall have been consummated in accordance with the terms and conditions of the Initial New Senior Notes Documents and all applicable law.

     (c) On the Fourth Restatement Effective Date, (i) the Administrative Agent shall have received true and correct copies of all Initial New Senior Notes Documents and all Acquisition Documents, in each case certified as such by an Authorized Officer of the Borrower and (ii) all such Documents shall be in full force and effect.

     (d) On the Fourth Restatement Effective Date, RJRTH shall have duly authorized, executed and delivered to the Borrower a promissory note in the form of Exhibit M (the “RJRTH Intercompany Note”), which RJRTH Intercompany Note shall, in turn, have been delivered to the Collateral Agent for pledge pursuant to the Pledge Agreement.

     G. Adverse Change. No event, development or circumstance shall have occurred since December 31, 2005 (or, if such event, development or circumstance has occurred since December 31, 2005, the Specified Agents had no knowledge thereof prior to April 24, 2006) that has caused, or could reasonably be expected to cause, a Material Adverse Effect.

     H. Approvals. On or prior to the Fourth Restatement Effective Date, (i) all governmental, regulatory and third party approvals necessary under the terms of the Acquisition Agreement to consummate the Acquisition and all material governmental, regulatory and third party approvals necessary to consummate the financing transactions contemplated by the Documents and for the continuing operations of the Borrower and its Subsidiaries taken as a whole, shall have been obtained and remain in full force and effect

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and (ii) all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that could reasonably be expected to restrain, prevent or otherwise impose materially adverse conditions upon the consummation of the Transaction, the making of the Loans and the transactions contemplated by the Documents or otherwise referred to herein or therein.

     I. Unaudited Pro Forma Condensed Combined Financial Statements; Pro Forma Financial Statements. (a) The Agents shall have received (x) the audited (incorporated by reference from filings with the SEC) and unaudited interim (quarterly) consolidated financial statements of the Borrower (which shall have been reviewed by the Borrower’s independent registered public accounting firm as provided in Statement on Auditing Standards No. 100) and each Subsidiary Guarantor, to the extent any such financial statements would be required by (including by means of incorporation by reference), and meeting the requirements of, Regulation S-X for a Form S-3 registration statement under the Securities Act of 1933, as amended, relating to the offering of debt securities of the Borrower and guarantees thereof by each of the Subsidiary Guarantors, (y) audited combined historical financial statements of the Conwood Subsidiaries for the fiscal year ended December 31, 2005 and (z) pro forma financial statements of the Borrower based on the audited combined historical financial statements of the Conwood Subsidiaries for the fiscal year ended December 31, 2005 and on the Borrower’s audited historical financial statements for the fiscal year ended December 31, 2005 (the “Pro Forma Financial Statements”).

     (b) The Agents shall have received and shall be reasonably satisfied with a schedule showing a ratio of Consolidated Indebtedness (determined as of the Fourth Restatement Effective Date, after giving pro forma effect to the Transaction) to Consolidated EBITDA for the Test Period ended on the date of the most recent available financial statements of the Borrower as of the Fourth Restatement Effective Date of no more than 2.25:1:00.

     J. Subsidiary Guaranty. Each Subsidiary Guarantor shall have duly authorized, executed and delivered an amended and restated Subsidiary Guaranty substantially in the form of Exhibit D hereto (as so amended and restated and as the same may be further amended, restated, modified and/or supplemented from time to time in accordance with the terms hereof and thereof, the “Subsidiary Guaranty”), and the Subsidiary Guaranty shall be in full force and effect.

     K. Intercompany Subordination Agreement. The Borrower and each of its Subsidiaries (other than an Insignificant Subsidiary) shall have duly authorized, executed and delivered an amended and restated Subordination Agreement substantially in the form of Exhibit G hereto (as so amended and restated and as the same may be further amended, restated, modified and/or supplemented from time to time in accordance with the terms hereof and thereof, the “Intercompany Subordination Agreement”), and the Intercompany Subordination Agreement shall be in full force and effect.

     L. Pledge Agreement. The Borrower, each Subsidiary Guarantor and NA Holding shall have duly authorized, executed and delivered an amended and restated Pledge

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Agreement in the form of Exhibit H (as so amended and restated and as the same may be further amended, restated, modified and/or supplemented from time to time in accordance with the terms hereof and thereof, the “Pledge Agreement”), and the following other documents shall be, or shall previously have been, delivered to the Collateral Agent, as Pledgee thereunder:

     (i) all Collateral referred to in the Pledge Agreement then owned by such Credit Party (including all outstanding shares of Borrower Preferred Stock), (x) endorsed in blank, or accompanied by executed and undated endorsements for transfer, in the case of promissory notes constituting Collateral thereunder and (y) together with executed and undated endorsements for transfer, in the case of Equity Interests constituting certificated Collateral thereunder;

     (ii) proper Financing Statements (Form UCC-1) and/or Financing Statement amendments (Form UCC-3) fully executed for filing under the UCC or other appropriate filing offices of each jurisdiction as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by the Pledge Agreement; and

     (iii) evidence of the completion of all other recordings and filings of, or with respect to, the Pledge Agreement as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect the security interests intended to be created by the Pledge Agreement;

and the Pledge Agreement shall be in full force and effect.

          M. Security Agreement. The Borrower and each Subsidiary Guarantor shall have duly authorized, executed and delivered an amended and restated Security Agreement in the form of Exhibit I (as so amended and restated and as the same may be further amended, restated, modified and/or supplemented from time to time in accordance with the terms thereof and hereof, the “Security Agreement”) covering all of the Collateral referred to therein, and the following other documents shall be, or shall previously have been, delivered to the Collateral Agent:

     (i) executed copies of financing statements (Form UCC-1) and/or financing statement amendments (Form UCC-3) (or appropriate local equivalent) in appropriate form for filing under the UCC or appropriate local equivalent of each jurisdiction as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by the Security Agreement; and

     (ii) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the Security Agreement have been taken;

and the Security Agreement shall be in full force and effect.

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     N. Mortgages. On the Fourth Restatement Effective Date (but subject to Section 12.19), the Collateral Agent shall have received:

     (i) fully executed counterparts of amendments to, and/or amendments and restatements of, each of the Existing Mortgages (the “Mortgage Amendments”), in form and substance satisfactory to the Collateral Agent, together with evidence that a counterpart of each such Mortgage Amendment has been delivered to the title company insuring the Lien on the respective Existing Mortgage for recording in all places to the extent necessary or desirable, in the reasonable judgment of the Collateral Agent, effectively to maintain a valid and enforceable first priority mortgage lien (subject to Permitted Liens) on each Existing Mortgaged Property in favor of the Collateral Agent for the benefit of the Secured Creditors;

     (ii) endorsements of the authorized issuing agent for title insurers reasonably satisfactory to the Collateral Agent to each Existing Mortgage Policy assuring the Collateral Agent that each Existing Mortgage is a valid and enforceable first priority mortgage lien on the respective Existing Mortgaged Properties, free and clear of all defects and encumbrances except Permitted Liens;

     (iii) fully executed counterparts of Mortgages in form and substance satisfactory to the Collateral Agent, which Mortgages shall cover such of the Real Property (located in the United States or any State or territory thereof) owned or leased by the Borrower or any of its Subsidiaries (after giving effect to the Transaction) as are designated on Annex VIII as a “New Mortgaged Property,” together with evidence that counterparts of the Mortgages have been delivered to the title insurance company insuring the lien of such Mortgage for recording in all places to the extent necessary or, in the reasonable opinion of the Collateral Agent, desirable to effectively create a valid and enforceable first priority mortgage lien on each such New Mortgaged Property in favor of the Collateral Agent for the benefit of the Secured Creditors, subject to Permitted Liens;

     (iv) Mortgage Policies on the New Mortgaged Properties issued by such title insurers reasonably satisfactory to the Collateral Agent in amounts satisfactory to the Lead Agents assuring the Collateral Agent that the Mortgages on such New Mortgaged Properties are valid and enforceable first priority mortgage liens on the respective New Mortgaged Properties, free and clear of all defects and encumbrances except Permitted Liens and such Mortgage Policies shall otherwise be in form and substance reasonably satisfactory to the Collateral Agent and shall include, as appropriate, an endorsement for future advances under this Agreement and the Notes and for any other matter that the Collateral Agent may reasonably request, shall not include an exception for mechanics’ liens or creditors’ rights, and shall provide for affirmative insurance and such reinsurance (including direct access agreements) as the Collateral Agent may reasonably request;

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     (v) surveys, in form and substance reasonably satisfactory to the Collateral Agent, of each New Mortgaged Property designated as a “surveyed property” on Annex VIII, dated a recent date reasonably acceptable to the Collateral Agent and certified in a manner reasonably satisfactory to the Collateral Agent by a licensed professional surveyor reasonably satisfactory to the Collateral Agent; and

     (vi) flood certificates covering each Mortgaged Property in form and substance acceptable to the Administrative Agent, certified to the Collateral Agent in its capacity as such and whether or not each such Mortgaged Property is located in a flood hazard area, as determined by designation of each such Mortgaged Property in a specified flood hazard zone by reference to the applicable FEMA map.

     O. Insurance Certificates. On or before the Fourth Restatement Effective Date, the Administrative Agent shall have received evidence of insurance complying with the requirements of Section 7.03 for the business and properties of the Borrower and its Subsidiaries (including, without limitation, the Acquired Business), in scope, form and substance reasonably satisfactory to the Lead Agents and naming the Collateral Agent as an additional insured and/or loss payee, and stating that such insurance shall not be terminated without at least 30 days’ prior written notice by the insurer to the Collateral Agent.

     P. Third Amended and Restated Credit Agreement. On the Fourth Restatement Effective Date (and, except in the case of clause (v) below, concurrently with the initial incurrence of Loans on such date), (i) all Loans (if any) outstanding pursuant to (and as defined in) the Third Amended and Restated Credit Agreement shall have been repaid in full (and the Borrower shall have paid all breakage costs and similar costs resulting therefrom in accordance with the provisions of Section 1.11 of the Third Amended and Restated Credit Agreement), (ii) all outstanding Letters of Credit under, and as defined in, the Third Amended and Restated Credit Agreement shall have been incorporated as Letters of Credit hereunder pursuant to Section 2.01(c), (iii) all accrued interest on all outstanding extensions of credit, and all accrued fees, pursuant to the Third Amended and Restated Credit Agreement shall be paid in full on, and through, the Fourth Restatement Effective Date (whether or not same would otherwise be then due and payable pursuant to the Third Amended and Restated Credit Agreement), (iv) all other amounts then due and owing to each Lender under, and as defined in, the Third Amended and Restated Credit Agreement pursuant to the Third Amended and Restated Credit Agreement shall have been paid in full and (v) immediately prior to giving effect thereto, no Default or Event of Default under, and as defined in, the Third Amended and Restated Credit Agreement shall have occurred and be continuing.

     Q. Joinders To Tax Sharing Agreement. On or prior to the Fourth Restatement Effective Date, the Subsidiaries of the Borrower comprising a part of the Acquired Business shall have duly authorized, executed and delivered joinder agreements in form and substance satisfactory to the Lead Agents, pursuant to which such Subsidiaries shall

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become party to the Tax Sharing Agreement, and the Tax Sharing Agreement shall be in full force and effect.

     R. Solvency Certificate. On the Fourth Restatement Effective Date, the Administrative Agent shall have received a solvency certificate from the chief financial officer of the Borrower in the form of Exhibit F hereto.

     S. Fees, etc. On the Fourth Restatement Effective Date, the Borrower shall have paid to each Agent and each Lender all costs, fees and expenses payable to the Agents or the Lenders, to the extent then due.

     T. RAI Assumption Agreement. On the Fourth Restatement Effective Date (but immediately prior to giving effect thereto), the Borrower and RJRTH shall have duly authorized, executed and delivered an Assignment and Assumption Agreement in the form of Exhibit L (the “RAI Assumption Agreement”), pursuant to which the Borrower shall assume, and RJRTH shall assign to the Borrower, all of RJRTH’s rights and obligations under the Third Amended and Restated Credit Agreement and the other Credit Documents (as defined in the Third Amended and Restated Credit Agreement) to which RJRTH is a party.

     U. RAI Existing Senior Notes Assumption and Indemnificaton Agreement. On the Fourth Restatement Effective Date (but immediately prior to giving effect thereto), the Borrower and RJRTH shall have duly authorized, executed and delivered an Assumption and Indemnification Agreement in the form of Exhibit N (the “RAI Existing Senior Notes Assumption and Indemnification Agreement”).

          5.02 Conditions Precedent to All Credit Events. The obligation of each Lender to make any Loans (other than pursuant to a Mandatory Borrowing) and the obligation of each Letter of Credit Issuer to issue or extend Letters of Credit, is subject, at the time of the making of each such Loan and/or the issuance or extension of each such Letter of Credit (and after giving effect thereto), to the satisfaction of the following conditions at such time: (i) there shall exist no Default or Event of Default and (ii) all representations and warranties contained herein or in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Credit Event, unless such representation and warranty expressly indicates that it is being made as of a specified date, in which case such representation or warranty shall be true and correct in all material respects only as of such specified date.

          The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by each Credit Party to each of the Lenders that all of the applicable conditions specified above exist as of that time. All of the certificates, legal opinions and other documents and papers referred to in Section 5.01, unless otherwise specified, shall be delivered to the Administrative Agent at the Administrative Agent’s Office for the account of each of the Lenders and shall be reasonably satisfactory in form and substance to each Agent.

          SECTION 6. Representations, Warranties and Agreements. In order to induce the Lenders to enter into this Agreement, to make the Loans and issue or participate in Letters of

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Credit as provided for herein, the Borrower makes the following representations and warranties to and agreements with the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans and the issuance (or, in the case of Existing Letters of Credit, deemed issuance) of the Letters of Credit (with (x) all such representations, warranties and agreements being first made on the Fourth Restatement Effective Date and (y) the occurrence of each Credit Event being deemed to constitute a representation and warranty that the matters specified in this Section 6 are true and correct in all material respects on and as of the date hereof and as of the date of each such Credit Event, unless such representation and warranty expressly indicates that it is being made as of any specific date, in which case such representation or warranty shall be true and correct in all material respects only as of such specified date):

          6.01 Status. Each Credit Party and each of its Material Subsidiaries (i) is a duly organized and validly existing Company in good standing under the laws of the jurisdiction of its organization and has the requisite Company power and authority to own its property and assets and to transact the business in which it is engaged and (ii) is duly qualified and is authorized to do business and is in good standing in all jurisdictions where it is required to be so qualified and where the failure to be so qualified would have a Material Adverse Effect.

          6.02 Power and Authority. Each Credit Party has the requisite Company power and authority to execute, deliver and carry out the terms and provisions of the Documents to which it is a party and has taken all necessary Company action to authorize the execution, delivery and performance of the Documents to which it is a party. Each Credit Party has duly executed and delivered each Document to which it is a party and each such Document constitutes the legal, valid and binding obligation of such Credit Party enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditor’s rights generally or general principles of equity.

          6.03 No Violation. Neither the execution, delivery and performance by any Credit Party of the Documents to which it is a party nor compliance with the terms and provisions thereof, nor the consummation of the transactions contemplated therein (i) will contravene any material provision of any applicable law, statute, rule, regulation, order, writ, injunction or decree of any Governmental Authority, (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except for the Liens created pursuant to the Security Documents) upon any of the property or assets of the Borrower or any of its Subsidiaries pursuant to the terms of any material indenture, mortgage, deed of trust, agreement or other instrument to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject (including, without limitation, the New Senior Notes Documents) or (iii) will violate any provision of the Certificate of Incorporation or By-Laws (or equivalent organizational documents) of the Borrower or any of its Subsidiaries.

          6.04 Litigation. Except as set forth on Annex IV, there are no actions, suits or proceedings pending or threatened with respect to the Borrower or any of its Subsidiaries that would reasonably be expected to have a Material Adverse Effect.

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          6.05 Use of Proceeds; Margin Regulations. (a) All proceeds of the Term Loans will be used by the Borrower to finance the Acquisition and to pay fees and expenses incurred in connection with the Transaction.

          (b) The proceeds of all Revolving Loans and Swingline Loans shall be utilized by the Borrower for general corporate purposes of the Borrower and/or its Subsidiaries (including, without limitation, the refinancing of Indebtedness and the backing up of commercial paper issued by the Borrower); provided that (i) no proceeds of Revolving Loans or Swingline Loans may be used to finance the Acquisition or pay fees and expenses incurred in connection with the Transaction and (ii) proceeds of Revolving Loans and Swingline Loans to be used for the bonding of litigation may only be used for Permitted Litigation Bonding.

          (c) Except as otherwise permitted by Section 8.05(b), (c), (d), and (f), no part of any Credit Event (or the proceeds thereof) will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof nor the occurrence of any other Credit Event will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

          (d) The Fair Market Value of all Margin Stock owned by the Borrower and its Subsidiaries does not exceed $50,000,000 (for such purposes, determined without regard to the Fair Market Value of the shares of Excluded Joint Ventures held by the Borrower and its Subsidiaries, to the extent same shall at any time constitute Margin Stock). At the time of each Credit Event, not more than 25% of the value of the assets of the Borrower and its Subsidiaries taken as a whole will constitute Margin Stock.

          (d) Notwithstanding the foregoing provisions of this Section 6.05, no proceeds of any Loan will be utilized to purchase any Margin Stock in a transaction, or as part of a series of transactions, the result of which is the ownership by the Borrower and/or its Subsidiaries of 5% or more of the capital stock of a corporation unless the Board of Directors of such corporation has approved such transaction prior to any public announcement of the purchase, or the intent to purchase, any such Margin Stock.

          6.06 Governmental Approvals. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any Governmental Authority, or any subdivision thereof, is required to authorize or is required in connection with (i) the execution, delivery and performance of any Document or (ii) the legality, validity, binding effect or enforceability of any Document, except for (x) those that have otherwise been obtained or made on or prior to the Fourth Restatement Effective Date and which remain in full force and effect on the Fourth Restatement Effective Date and (y) filings which are necessary to perfect the security interests created under the Security Documents.

          6.07 Investment Company Act. Neither the Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

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          6.08 True and Complete Disclosure. All factual information (taken as a whole) heretofore or contemporaneously furnished by or on behalf of the Credit Parties or any of their Subsidiaries in writing to any Agent or any Lender for purposes of or in connection with this Agreement, the other Documents or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of such Persons in writing to any Lender will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any material fact necessary to make such information (taken as a whole) not misleading at such time in light of the circumstances under which such information was provided. The projections and pro forma financial information contained in such materials were based on good faith estimates and assumptions believed by such Persons to be reasonable at the time made, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and such differences may be material.

          6.09 Financial Condition; Financial Statements; Solvency. (a) The consolidated balance sheets of the Borrower and its Subsidiaries, at December 31, 2003, at December 31, 2004 and at December 31, 2005 and the related consoli dated statements of income (loss), shareholders’ equity and comprehensive income (loss) and cash flows for the fiscal years ended as of said dates, which statements have been examined by KPMG LLP, independent registered public accountants, who delivered an unqualified opinion in respect of the financial statements examined by them, copies of which have heretofore been furnished to the Administrative Agent (on behalf of each Lender), present fairly in all material respects the consolidated financial position of the Borrower at the dates of said statements and the results of operations for the periods covered thereby in conformity with GAAP.

          (b) The combined balance sheet of the Conwood Subsidiaries at December 31, 2005 and the related combined statements of income and cash flows for the fiscal year ended as of said date, which statements have been examined by KPMG LLP, independent auditors, who delivered an unqualified opinion in respect of the financial statements examined by them, copies of which have heretofore been furnished to the Administrative Agent (on behalf of each Lender), present fairly in all material respects the combined financial position of the Conwood Subsidiaries at the date of said statements and the results of operations for the period covered thereby in conformity with GAAP.

          (c) The Pro Forma Financial Statements present a good faith estimate of the combined pro forma financial condition of the Borrower and its Subsidiaries and the pro forma results of operations of the Borrower and its Subsidiaries for the respective periods covered thereby (after giving effect to the Transaction at the date thereof or for the period covered thereby).

          (d) Since December 31, 2005 (after giving effect to the Transaction as if same had occurred immediately prior to such date), nothing has occurred which has had a Material Adverse Effect.

          (e) On and as of the date of each Credit Event, and after giving effect to the Transaction and to all Indebtedness (including the Loans and the New Senior Notes) being

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incurred or assumed and Liens created by the Credit Parties in connection therewith, (i) the sum of the assets, at a fair valuation, of the Borrower (on a stand-alone basis) and of each Credit Party and its Subsidiaries (taken as a whole) will exceed its or their respective debts, (ii) the Borrower (on a stand-alone basis) and of each Credit Party and its Subsidiaries (taken as a whole) has or have not incurred and does or do not intend to incur, and does or do not believe that it or they will incur, debts beyond its or their respective ability to pay such debts as such debts mature, and (iii) the Borrower (on a stand-alone basis) and of each Credit Party and its Subsidiaries (taken as a whole) will have sufficient capital with which to conduct its or their respective businesses. For purposes of this Section 6.09(e), “debt” means any liability on a claim, and “claim” means (a) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

          6.10 Tax Returns and Payments. Each of the Borrower and its Subsidiaries has timely filed all federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it (the “Returns”). The Returns accurately reflect in all material respects all liability for taxes of the Borrower and its Subsidiaries as a whole for the periods covered thereby. Each of the Borrower and each of its Subsidiaries have paid all material taxes and assessments payable by them other than those contested in good faith and adequately disclosed and for which adequate reserves have been established in accordance with generally accepted accounting principles.

          6.11 Compliance with ERISA. Except to the extent that all events described in the following clauses of this sentence and then in existence could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, each Plan is in substantial compliance with ERISA and the Code; no Reportable Event has occurred with respect to any Plan; no Plan is insolvent or in reorganization, no Plan has an Unfunded Current Liability, and no Plan has an accumulated or waived funding deficiency or permitted decreases in its funding standard account within the meaning of Section 412 of the Code; none of the Borrower, any Subsidiary or any ERISA Affiliate has incurred any material liability to or on account of a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code; no proceedings have been instituted to terminate any Plan; no condition exists which presents a material risk to the Borrower or any Subsidiary of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code. With respect to Plans that are multi-employer plans (within the meaning of Section 3(37) of ERISA) and Plans which are not currently maintained or contributed to by the Borrower, any Subsidiary or any ERISA Affiliate, the representations and warranties in this Section are made to the best knowledge of the Borrower.

          6.12 Subsidiaries. Part A of Annex V hereto lists each Material Subsidiary of the Borrower (and the direct and indirect ownership interest of the Borrower therein), in each

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case existing on the Fourth Restatement Effective Date. All ownership percentages referred to in Part A of Annex V are calculated without regard to directors’ or nominees’ qualifying shares.

          6.13 Patents, etc. The Borrower and each of its Subsidiaries have obtained all material patents, trademarks, servicemarks, trade names, copyrights, licenses and other rights, free from burdensome restrictions, that are necessary for the operation of their respective businesses as presently conducted and as proposed to be conducted.

          6.14 Pollution and Other Regulations. The Borrower and each of its Subsidiaries are in material compliance with all material laws and regulations relating to pollution and environmental control, equal employment opportunity and employee safety in all domestic jurisdictions in which the Borrower and each of its Subsidiaries is presently doing business, and the Borrower will comply, and cause each of its Subsidiaries to comply, with all such laws and regulations which may be imposed in the future in jurisdictions in which the Borrower or such Subsidiary may then be doing business other than, in each case, those the non-compliance with which would not reasonably be expected to have a Material Adverse Effect.

          6.15 Properties. The Borrower and each of its Subsidiaries have good title to all properties that are necessary for the operation of their respective businesses as presently conducted and as proposed to be conducted, free and clear of all Liens, other than as permitted by this Agreement. All Real Property owned by the Borrower or any of its Subsidiaries, and all material leaseholds leased by the Borrower or any of its Subsidiaries, in each case as of the Fourth Restatement Effective Date and after giving effect to the Transaction, and the nature of the interests therein, are correctly set forth in Annex VIII.

          SECTION 7. Affirmative Covenants. The Borrower hereby covenants and agrees that on the Fourth Restatement Effective Date and thereafter, for so long as this Agreement is in effect and until the Commitments and each Letter of Credit have terminated and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations incurred hereunder, are paid in full:

          7.01 Information Covenants. The Borrower will furnish to the Administrative Agent (for further delivery to each Lender):

     (a) Annual Financial Statements. Within 100 days after the close of each fiscal year of the Borrower, to the extent prepared to comply with SEC requirements, a copy of the SEC Form 10-Ks filed by the Borrower with the SEC for such fiscal year, or, if no such Form 10-K was so filed by the Borrower for such fiscal year, the consolidated balance sheet of the Borrower and its Subsidiaries, as at the end of such fiscal year and the related consolidated statements of income and of cash flows for such fiscal year, setting forth comparative consolidated figures as of the end of and for the preceding fiscal year, and examined by independent certified public accountants of recognized national standing whose opinion shall not be qualified as to the scope of audit or as to the status of the Borrower or any of its Subsidiaries as a going concern, together in any event with a certificate of such accounting firm stating that in the course of its regular audit of the business of the Borrower, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge of any

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Default or Event of Default which has occurred and is continuing or, if in the opinion of such accounting firm such a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof.

     (b) Quarterly Financial Statements. As soon as available and in any event within 55 days after the close of each of the first three quarterly accounting periods in each fiscal year of the Borrower to the extent prepared to comply with SEC requirements, a copy of the SEC Form 10-Qs filed by the Borrower with the SEC for each such quarterly period, or, if no such Form 10-Q was so filed by the Borrower with respect to any such quarterly period, the consolidated condensed balance sheet of the Borrower and its Subsidiaries as at the end of such quarterly period and the related consolidated condensed statements of income for such quarterly period and for the elapsed portion of the fiscal year ended with the last day of such quarterly period, and the related consolidated condensed statement of cash flows for the elapsed portion of the fiscal year ended with the last day of such quarterly period, and in each case setting forth comparative consolidated figures for the related periods in the prior fiscal year or, in the case of such consolidated condensed balance sheet, for the last day of the prior fiscal year, all of which shall be certified by an Authorized Officer of the Borrower, subject to changes resulting from audit and normal year-end adjustments.

     (c) Officer’s Certificates. At the time of the delivery of the financial statements provided for in Sections 7.01(a) and (b), a certificate of an Authorized Officer of the Borrower to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall set forth the calculations required to establish whether the Borrower and its Subsidiaries were in compliance with the provisions of (x) Sections 8.07, 8.08 and 8.13 as at the end of such fiscal period or year, as the case may be, and (y) if furnished in connection with the delivery of the financial statements provided for in Section 7.01(a), Sections 8.02(d), 8.02(k), 8.03(j), 8.03(v), 8.04(d), 8.04(e), 8.04(k), 8.04(l), 8.04(m), 8.04(o), 8.05(c), 8.05(d), 8.09(b), 8.09(e), 8.09(i), 8.09(j), 8.09(l) and 8.09(n) as at the end of such fiscal year.

     (d) Notice of Default or Litigation. Promptly, and in any event within three Business Days after any senior financial or legal officer of the Borrower obtains knowledge thereof, notice of (x) the occurrence of any event which constitutes a Default or Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower and/or the relevant Subsidiary proposes to take with respect thereto and (y) any litigation or governmental proceeding pending against or affecting the Borrower or any of its Subsidiaries which has had, or could reasonably be expected to have, a material adverse effect on the business, properties, assets, financial condition or prospects of the Borrower and its Subsidiaries taken as a whole, the rights and remedies of the Agents and the Lenders or the ability of any Credit Party to perform its obligations hereunder or under any other Credit Document to which it is a party.

     (e) Credit Rating Changes. Promptly after any senior financial or legal officer of the Borrower obtains knowledge thereof, notice of any change in the Applicable

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Facilities Credit Rating or the Applicable Corporate Credit Rating assigned by either Rating Agency.

     (f) Other Information. Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the Securities and Exchange Commission or any successor thereto (the “SEC”) by the Borrower or any of its Subsidiaries (other than amendments to any registration statement (to the extent such registration statement, in the form it becomes effective, is delivered to the Administrative Agent), exhibits to any registration statement, any registration statements on Form S-8 and Forms 3, 4 and 5 and any annual report on Form 11-K) and copies of all financial statements, proxy statements, notices and reports that the Borrower or any of its Subsidiaries shall send to analysts or the holders of any publicly issued debt of the Borrower and/or any of its Subsidiaries in their capacity as such holders (in each case, to the extent not theretofore delivered to the Administrative Agent pursuant to this Agreement) and, with reasonable promptness, such other information or documents (financial or otherwise) as any Agent on its own behalf or on behalf of the Required Lenders may reasonably request from time to time.

          7.02 Books, Records and Inspections. The Borrower will, and will cause each of its Subsidiaries to, permit, upon reasonable notice to an Authorized Officer of the Borrower, officers and designated representatives of any Lead Agent or the Required Lenders to visit and inspect any of the properties or assets of the Borrower and any of its Subsidiaries in whomsoever’s possession, and to examine the books of account of the Borrower and any of its Subsidiaries and discuss the affairs, finances and accounts of the Borrower and of any of its Subsidiaries with, and be advised as to the same by, its and their officers and independent accountants, all at such reasonable times and intervals and to such reasonable extent as any Lead Agent or the Required Lenders may desire; provided that, the Borrower and its Subsidiaries shall only be required to use their commercially reasonably efforts to permit access to their respective assets not in the possession of the Borrower or any Subsidiary; and provided further that, unless a Default or Event of Default is in existence at the time of a given request for inspection or visit pursuant to this Section 7.02 (in which case this proviso shall not be applicable to such inspection or visit), the Borrower shall only be responsible for fees, costs and expenses relating to only one such visit and inspection in each fiscal year of the Borrower.

          7.03 Insurance. The Borrower will, and will cause each of its Subsidiaries to, at all times maintain in full force and effect insurance in such amounts, covering such risks and liabilities and with such deductibles or self-insured retentions as are in accordance with normal industry practice.

          7.04 Payment of Taxes. The Borrower will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all Federal, state and other material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, in each case on a timely basis, and all material lawful claims which, if unpaid, might become a Lien or charge upon any properties of the Borrower or any of its Subsidiaries; provided that neither the Borrower nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves (in the good faith judgment of the management of the Borrower) with respect thereto in accordance with GAAP.

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          7.05 Consolidated Corporate Franchises. The Borrower will do, and will cause each Subsidiary Guarantor and each of its Material Subsidiaries to do, or cause to be done, all things necessary to preserve and keep in full force and effect its existence, rights and authority; provided that any transaction permitted by Section 8.02 will not constitute a breach of this Section 7.05.

          7.06 Compliance with Statutes, etc. The Borrower will, and will cause each Subsidiary to, comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls) other than those the non-compliance with which would not reasonably be expected to have a Material Adverse Effect.

          7.07 ERISA. As soon as possible and, in any event, within 10 days after the Borrower or any Subsidiary knows or has reason to know of the occurrence of any of the following, the Borrower will deliver to the Administrative Agent a certificate of an Authorized Officer of the Borrower setting forth details as to such occurrence and the action, if any, which the Borrower, such Subsidiary or an ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by the Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant (other than notices relating to an individual participant’s benefits) or the Plan administrator with respect thereto: that a Reportable Event has occurred (except to the extent that the Borrower has previously delivered to the Administrative Agent a certificate and notices (if any) concerning such event pursuant to the next clause hereof), that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof), that an accumulated funding deficiency has been incurred or an application may be or has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan, that a Plan which has an Unfunded Current Liability has been or may be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA, that a Plan has an Unfunded Current Liability giving rise to a lien under ERISA or the Code, that proceedings may be or have been instituted to terminate a Plan which has an Unfunded Current Liability, that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan, or that the Borrower, any Subsidiary or any ERISA Affiliate will or may incur any liability (including any contingent or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or with respect to a Plan under Section 4971 or 4975 of the Code or Section 409 or 502(i) or 502(l) of ERISA. Upon request of the Administrative Agent or the Required Lenders, the Borrower will deliver to the Administrative Agent a complete copy of the annual report (Form 5500) of each Plan required to be filed with the Internal Revenue Service. In addition to any certificates or notices delivered to the Administrative Agent pursuant to the first sentence hereof, copies of any notices received by the Borrower or any Subsidiary shall be delivered to the Administrative Agent no later than 10 days after the later of the date such notice has been filed with the Internal Revenue Service or the PBGC, given to Plan participants (other than notices relating to an individual participant’s benefits) or received by the Borrower or such Subsidiary.

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          7.08 Good Repair. The Borrower will, and will cause each of its Subsidiaries to, ensure that its properties and equipment used or useful in its business in whomsoever’s possession they may be, are kept in good repair, working order and condition, normal wear and tear excepted and subject to the occurrence of casualty events, and that from time to time there are made in such properties and equipment all needful and proper repairs, renewals, replacements, extensions, additions, betterments and improvements thereto, to the extent and in the manner customary for companies in similar businesses.

          7.09 End of Fiscal Years; Fiscal Quarters. The Borrower will, for financial reporting purposes, cause (i) each of its fiscal years to end on December 31 of each year, (ii) each of its fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year and (iii) each of the Subsidiaries to maintain the accounting periods maintained by such Subsidiary on the Fourth Restatement Effective Date, consistent with the past practice and procedures of each such Subsidiary; provided that any of the foregoing fiscal or reporting periods may be changed if (x) the Borrower gives the Administrative Agent 30 days’ prior written notice of such proposed change and (y) prior to effecting such change, the Borrower and the Lead Agents shall have agreed upon adjustments, if any, to Sections 8.05, 8.07, 8.08 and 8.13 (and the definitions used therein) the sole purpose of which shall be to give effect to the proposed change in fiscal or accounting periods (it being understood and agreed that to the extent that the Borrower and the Lead Agents cannot agree on appropriate adjustments to such Sections (or that no adjustments are necessary), the proposed change may not be effected).

          7.10 Subsidiary Guaranty; Collateral. (a) No later than 15 days after the date on which a Guaranty Event occurs after the Fourth Restatement Effective Date, each Material Subsidiary not then a Subsidiary Guarantor shall (i) authorize the execution of, and execute and deliver to the Administrative Agent on behalf of the Lenders, a Subsidiary Guaranty and (ii) cause to be delivered such opinions of counsel as are reasonably requested by, and are reasonably satisfactory to, the Lead Agents in respect of such Subsidiary Guaranty.

          (b) No later than 15 days after the date on which a Trigger Event occurs after the Fourth Restatement Effective Date, each Credit Party (including each Subsidiary which is required to become a Subsidiary Guarantor pursuant to Section 7.10(a)) shall (i) authorize, execute and deliver to the Collateral Agent on behalf of the Secured Creditors pledge agreements, security agreements and/or mortgages substantially in the form of the respective Security Documents entered into on the Fourth Restatement Effective Date (with such modifications thereto as may be reasonably required by the Lead Agents), which agreements and mortgages shall be effective to create in favor of the Collateral Agent on behalf of the Secured Creditors a pledge of and/or a lien on substantially all of its assets (other than Excluded Collateral and subject to such other exceptions as are reasonably satisfactory to the Lead Agents) with such priority as is provided for in the representations contained in the respective Security Documents, (ii) deliver in pledge thereunder all securities, notes, instruments and transfer powers required to be delivered by the terms of the respective Security Documents, (iii) execute and cause to be filed such financing statements and mortgages as are required to perfect the pledges and Liens created under the Security Documents and to obtain the priority of such perfection required by the respective Security Documents and (iv) cause to be delivered such opinions of counsel as are reasonably requested by, and as are reasonably satisfactory to, the Lead Agents with respect to the Security Documents and the pledges and Liens created thereunder.

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          (c) At any time (i) a Guaranty Event has occurred and is continuing and (ii) a Material Subsidiary Threshold Event occurs, then on or prior to the 45^th day following the date of the occurrence of such Material Subsidiary Threshold Event, the Borrower shall cause one or more Subsidiaries not then a Subsidiary Guarantor to take the actions described in Section 7.10(a) such that, after giving effect to such actions, such Material Subsidiary Threshold Event shall cease to exist. At any time (i) a Trigger Event has occurred and is continuing and (ii) a Material Subsidiary Threshold Event occurs, then on or prior to the 45^th day following the date of the occurrence of such Material Subsidiary Threshold Event, the Borrower shall cause one or more Subsidiaries not then a party to Security Documents to take the actions described in Section 7.10(b) such that, after giving effect to such actions, such Material Subsidiary Threshold Event shall cease to exist.

          (d) At any time a Trigger Event has occurred and is continuing, the Borrower will, and will cause each of the other Credit Parties that are Subsidiaries of the Borrower to, grant to the Collateral Agent for the benefit of the Secured Creditors security interests and mortgages in such assets and properties of the Borrower and such other Credit Parties as are not covered by the original Security Documents (excluding Excluded Collateral) and as may be reasonably requested from time to time by the Collateral Agent or the Required Lenders (collectively, the “Additional Security Documents”). All such security interests and mortgages shall be granted pursuant to documentation reasonably satisfactory in form and substance to the Collateral Agent and shall constitute valid and enforceable perfected security interests and mortgages superior to and prior to the rights of all third Persons and subject to no other Liens except for Permitted Liens. The Additional Security Documents or instruments related thereto shall have been duly recorded or filed in such manner and in such places as are required by law to establish, perfect, preserve and protect the Liens in favor of the Collateral Agent required to be granted pursuant to the Additional Security Documents and all taxes, fees and other charges payable in connection therewith shall have been paid in full.

          (e) At any time a Trigger Event has occurred and is continuing, the Borrower will, and will cause each of the other Credit Parties to, at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, real property surveys, reports, landlord waivers, bailee agreements, control agreements and other assurances or instruments and take such further steps relating to the Collateral covered by any of the Security Documents as the Collateral Agent may reasonably require. Furthermore, the Borrower will, and will cause the other Credit Parties to, deliver to the Collateral Agent such opinions of counsel, title insurance and other related documents as may be reasonably requested by the Collateral Agent to assure itself that this Section 7.10 has been complied with.

          (f) If the Administrative Agent or the Required Lenders reasonably determine that they are required by law or regulation to have appraisals prepared in respect of any Real Property of the Borrower and its Subsidiaries constituting Collateral, the Borrower will, at its own expense, provide to the Administrative Agent appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of the Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent.

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          (g) The Borrower agrees that each action required by clauses (d) through (f) of this Section 7.10 shall be completed as soon as possible, but in no event later than 60 days after such action is requested to be taken by the Administrative Agent, the Collateral Agent or the Required Lenders, as the case may be; provided that in no event will the Borrower or any of its Subsidiaries be required to take any action, other than using its commercially reasonable efforts, to obtain consents from third parties with respect to its compliance with this Section 7.10.

          (h) Promptly (and in any event within five business days) after repayment or defeasance in full of the Macon-Bibb Industrial Authority Taxable Industrial Development Revenue Bonds (Brown & Williamson Tobacco Corporation Project), Series 1993A in the original aggregate principal amount of $25,000,000, the Borrower shall give notice of the same to the Administrative Agent and, if requested by the Collateral Agent at such time, take such actions with respect to such Real Property as may be required pursuant to Section 7.10(d), (e), (f) and (g), unless the Borrower has theretofore disposed of such Real Property in accordance with the terms hereof.

          (i) Notwithstanding anything to the contrary in this Section 7.10, all Collateral shall be released in accordance with the release provisions of the Security Documents (subject to reinstatement upon the occurrence of a new Trigger Event) if at any time subsequent to the Fourth Restatement Effective Date or any reinstatement of the requirements of Section 7.10(b) after the Fourth Restatement Effective Date as a result of the occurrence of a new Trigger Event, both (i) all outstanding Term Loans shall have been repaid in full and (ii) the Applicable Corporate Credit Rating issued by each Rating Agency shall, after giving effect to such release and subject to the completion of such release, if applicable, each be the Minimum Investment Grade Rating or higher (with at least a stable outlook).

          7.11 Margin Stock. The Borrower will take all actions so that at all times the Fair Market Value of all Margin Stock owned by the Borrower and its Subsidiaries shall not exceed $50,000,000 (for such purposes, determined without regard to the Fair Market Value of the shares of the Excluded Joint Ventures held by the Borrower and its Subsidiaries, to the extent same shall at any time constitute Margin Stock). So long as the covenant contained in the immediately preceding sentence is complied with, all Margin Stock at any time owned by the Borrower and its Subsidiaries will not constitute Collateral and no security interest shall be granted therein pursuant to any Credit Document. Without excusing any violation of the first sentence of this Section 7.11, if at any time the Fair Market Value of all Margin Stock owned by the Borrower and its Subsidiaries exceeds the amount permitted pursuant to the first sentence of this Section 7.11, then (x) all Margin Stock owned by the Credit Parties shall be pledged, and delivered for pledge, pursuant to the Pledge Agreement and (y) the Borrower will execute and deliver to the Lenders appropriate completed forms (including, without limitation, Forms G-3 and U-1, as appropriate) establishing compliance with Regulations T, U and X of the Board of Governors of the Federal Reserve System. If at any time any Margin Stock is required to be pledged as a result of the provisions of the immediately preceding sentence, repayments of outstanding Obligations shall be required, and subsequent Credit Events shall be permitted, only in compliance with the applicable provisions of Regulations T, U and X of the Board of Governors of the Federal Reserve System.

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          7.12 Ownership Structure. The Borrower shall cause (i) the Equity Interests of each Subsidiary Guarantor at all times to be owned directly by the Borrower or another Subsidiary Guarantor, (ii) the Equity Interests of Reynolds Tobacco at all times to be directly owned by RJRTH and (iii) the Conwood Subsidiaries, Santa Fe and Lane to be Subsidiaries of the Borrower but not Subsidiaries of RJRTH; provided that the preceding clause (i) shall not prohibit the sale of any such Subsidiary to a Person that is not a Subsidiary pursuant to a transaction permitted by Section 8.02.

          7.13 Tax Sharing Agreement. The Borrower shall cause each new direct Subsidiary formed or acquired after the Fourth Restatement Effective Date (other than an Insignificant Subsidiary) to execute a counterpart to the Tax Sharing Agreement (or a joinder agreement therefor in form and substance reasonably satisfactory to the Administrative Agent) within 5 days following such formation or acquisition.

          7.14 Post Closing Liquidation. Within one Business Day following the Fourth Restatement Effective Date, (i) NA Holdings shall have liquidated all of its assets (including all of the Equity Interests of the Conwood Subsidiaries) into Conwood Holdings and (ii) immediately after such liquidation, dissolved.

          SECTION 8. Negative Covenants. The Borrower hereby covenants and agrees that on the Fourth Restatement Effective Date and thereafter, for so long as this Agreement is in effect and until the Commitments and each Letter of Credit have terminated and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations incurred hereunder, are paid in full:

          8.01 Changes in Business. Except as otherwise permitted by Section 8.02, the Borrower and its Subsidiaries, taken as a whole, will not substantively alter the character of their business from that conducted by the Borrower and its Subsidiaries taken as a whole on the Fourth Restatement Execution Date.

          8.02 Consolidation, Merger, Sale of Assets, etc. The Borrower will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease (as lessor) or otherwise dispose of all or any part of its property or assets (other than sales of inventory to customers in the ordinary course of business) or agree to do any of the foregoing at any future time, except that:

     (a) any Subsidiary of the Borrower may from time to time sell or otherwise dispose of inventory, equipment, raw materials and other assets (other than Equity Interests) to another Subsidiary of the Borrower in the ordinary course of business, so long as (x) cash in an amount equal to at least the Fair Market Value of the assets so transferred is received by the respective transferor or (y) no Default or Event of Default then exists or would result therefrom, intercompany indebtedness owing by the respective transferor to the respective transferee in an amount equal to at least the Fair Market Value of the assets so transferred is forgiven by such transferee;

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     (b) each Subsidiary of the Borrower may sell or otherwise transfer obsolete, uneconomic or worn-out equipment, materials or other assets in the ordinary course of business;

     (c) Permitted Acquisitions may be consummated in accordance with the requirements of Section 8.09(l);

     (d) any Subsidiary of the Borrower may transfer or otherwise dispose of any of its respective assets (including cash, fixed assets and intellectual property but excluding Equity Interests of a Subsidiary Guarantor owned or held by such Person) to any of their respective Subsidiaries not otherwise permitted by this Section 8.02, so long as (i) no Default or Event of Default is then in existence or would result therefrom and (ii) the aggregate amount of all such transfers and dispositions made pursuant to this clause (d) on and after the Fourth Restatement Effective Date (taking the Fair Market Value of any non-cash assets so transferred or disposed of) shall not exceed, when aggregated with (I) the aggregate amount of all Investments made by Subsidiaries of the Borrower in reliance on Section 8.09(n) (taking the Fair Market Value of any non-cash assets so invested and determined without regard to any write-downs or write-offs thereof and net of any returns of capital), (II) the aggregate amount of contributions, capitalizations and forgiveness theretofore made by Credit Parties pursuant to Section 8.09(j) to (or in respect of) Wholly-Owned Subsidiaries that are not Credit Parties and (III) the aggregate outstanding principal amount of all Intercompany Loans made pursuant to Section 8.09(i) by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties (determined without regard to any write-downs or write-offs thereof), $300,000,000;

     (e) each Subsidiary of the Borrower may sell or discount, in each case without recourse and in the ordinary course of business, accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof and not as part of any financing transaction;

     (f) each Subsidiary of the Borrower may grant licenses, sublicenses, leases or subleases to other Persons not materially interfering with the conduct of the business of any Subsidiary of the Borrower or any other, in each case so long as no such grant otherwise affects any security interest of the Collateral Agent in the asset or property subject thereto;

     (g) any Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, or transfer assets to, any Subsidiary Guarantor, so long as (x) in the case of any merger, dissolution or liquidation, a Subsidiary Guarantor is the surviving Company of any such merger, dissolution or liquidation, and (y) if a Trigger Event has occurred and is continuing, any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of such surviving Subsidiary Guarantor or so transferred are in full force and effect and perfected and enforceable (to at least the same extent as in effect immediately prior to such merger, dissolution, liquidation or transfer) and all actions (if any) then required to maintain said perfected status have been taken;

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     (h) any Domestic Subsidiary of the Borrower that is not a Credit Party may merge with and into, or be dissolved or liquidated into, or transfer assets to, any other Wholly-Owned Domestic Subsidiary of the Borrower that is not a Credit Party, so long as (x) in the case of any merger, dissolution or liquidation, such Wholly-Owned Domestic Subsidiary is the surviving Company of any such merger, dissolution or liquidation, and (y) if a Guaranty Event has occurred and is continuing and either (I) the Person that is the survivor of any such merger, dissolution or liquidation is (after giving effect thereto) a Material Subsidiary or (II) the Person that is the transferee of such assets is a Material Subsidiary after giving effect thereto, such new Material Subsidiary shall have executed (A) a counterpart of the Subsidiary Guaranty and (B) if a Trigger Event has occurred and is continuing at such time, such Security Documents as the Lead Agents shall reasonably request, with, in the case of this clause (B), such actions having been taken to perfect the pledge of, and Liens on, the stock and substantially all of the assets of such new Subsidiary as would have been taken if such new Subsidiary had been a Subsidiary Guarantor on the Fourth Restatement Effective Date, all to the reasonable satisfaction of the Lead Agents;

     (i) the Borrower may consumate the Acquisition in accordance with the requirements of Section 5.01F;

     (j) any Foreign Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, or transfer any of its assets to, any Wholly-Owned Foreign Subsidiary of the Borrower, so long as (i) in the case of any such merger, dissolution or liquidation, a Wholly-Owned Foreign Subsidiary of the Borrower is the survivor of such merger, dissolution or liquidation, and (ii) any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the Equity Interests of such Wholly-Owned Foreign Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation);

     (k) any Subsidiary of the Borrower may sell assets (other than the Equity Interests of any Wholly-Owned Subsidiary, unless all of the Equity Interests of such Wholly-Owned Subsidiary are sold in accordance with this clause (k)) to a Person other than a Subsidiary, so long as (x) no Default or Event of Default then exists or would result therefrom, (y) each such sale is in an arm’s-length transaction and the respective Subsidiary receives at least Fair Market Value, and (z) the aggregate amount of the proceeds received from all assets sold pursuant to this clause (k) after the Fourth Restatement Effective Date shall not exceed $500,000,000; and;

     (l) any Subsidiary of the Borrower may dispose of (by means of donation) any of the designated properties listed on Annex XI hereto owned by it to any other Person, so long as no Default or Event of Default then exists or would result therefrom; and

     (m) the Borrower and its Subsidiaries may sell, liquidate and/or dispose of Marketable Investments in the ordinary course of business.

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          To the extent the Required Lenders waive the provisions of this Section 8.02 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 8.02 (other than to the Borrower or a Subsidiary thereof), such Collateral shall be sold free and clear of the Liens created by the Security Documents, and the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

          8.03 Liens . The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets of any kind (whether real or personal, tangible or intangible) of the Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to the Borrower or any of its Subsidiaries), or assign any right to receive income; provided that the provisions of this Section 8.03 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as “Permitted Liens”):

     (a) Liens encumbering customary initial deposits and margin deposits, and other Liens incurred in the ordinary course of business and which are within the general parameters customary in the industry, securing obligations under Commodities Agreements;

     (b) Liens securing Indebtedness permitted by Section 8.04(c), provided that (x) such Liens are granted in the ordinary course of business and (y) in the case of Liens securing indebtedness described in sub-clause (x) of Section 8.04(c), such Liens shall attach only to documents or other property relating to such letters of credit and the products and proceeds thereof;

     (c) Liens arising pursuant to purchase money mortgages or security agreements securing Indebtedness of any Subsidiary of the Borrower representing the purchase price (or financing of the purchase price within 180 days after the respective purchase) of assets acquired, provided that (i) any such Liens attach only to the assets so purchased, (ii) the Indebtedness secured by any such Lien is not less than 70% of the purchase price of the property being purchased, and (iii) the Indebtedness secured thereby is permitted pursuant to Section 8.04(d);

     (d) Liens on specific tangible assets at the time acquired by any Subsidiary of the Borrower (including pursuant to a Permitted Acquisition) or on the property or assets of a Person at the time such Person first becomes a Subsidiary of the Borrower, provided that (i) any such Liens were not created at the time of or in contemplation of the acquisition of such assets or Person by the respective Subsidiary, (ii) in the case of any such acquisition of a Person, any such Lien attaches only to a specific tangible asset of such Person and not assets of such Person generally, (iii) the Indebtedness secured by any such Lien does not exceed 100% of the Fair Market Value of the asset to which such Lien attaches, determined at the time of the acquisition of such asset or at the time such Person first becomes a Subsidiary, as the case may be, and (iv) the Indebtedness that is secured by such Liens is permitted to exist under Section 8.04(e);

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     (e) Liens created pursuant to the Security Documents, including Liens created pursuant thereto for the benefit of the holders of New Senior Notes, Existing Senior Notes and Refinancing Senior Notes;

     (f) Liens resulting from the Borrower or Reynolds Tobacco cash collateralizing Litigation Bonds or judgments not constituting an Event of Default under Section 9.08, or providing cash collateral directly to courts to satisfy such courts’ requirements for a stay to appeal verdicts, orders and/or judgments, provided that Permanent Surplus Cash shall be applied for such purposes before proceeds of Loans are used for such purpose;

     (g) Existing Liens (and any extensions or renewals of such Liens (to the extent included in the definition of Existing Liens), to the extent such Liens do not attach to any additional properties and the Indebtedness secured thereby is not increased);

     (h) Liens securing the performance of bids, tenders, leases and contracts in the ordinary course of business, surety bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business and consistent with past practices (exclusive of obligations in respect of the payment for borrowed money and Litigation Bonds);

     (i) Liens encumbering the Borrower Common Stock repurchased in accordance with the requirements of Section 8.05(c) or (d), to the extent that such Liens (x) are created for the sole purpose of securing obligations of the Borrower to the agent brokering any such repurchase incurred in connection with such repurchase and (y) terminate upon the payment of such obligations;

     (j) Liens encumbering cash deposits securing obligations under Permitted Interest Rate Agreements and Permitted Currency Agreements, so long as the aggregate amount of the cash pledged to secure such obligations pursuant to this clause (j) does not exceed $500,000,000;

     (k) Liens in respect of property or assets of the Borrower or any of its Subsidiaries imposed by law which were incurred in the ordinary course of business and which have not arisen to secure Indebtedness for borrowed money, such as carriers’, materialmen’s, warehousemen’s and mechanics’ Liens, statutory and common law landlord’s Liens, and other similar Liens arising in the ordinary course of business, and which either (x) do not in the aggregate materially detract from the value of the Borrower’s or such Subsidiary’s property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Subsidiary or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien;

     (l) Liens arising from or related to precautionary UCC financing statements regarding operating leases entered into by any Subsidiary of the Borrower in the ordinary course of business;

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     (m) easements, rights-of-way, restrictions, encroachments and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries;

     (n) Permitted Encumbrances;

     (o) inchoate Liens for taxes, assessments or governmental charges or levies not yet due or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles;

     (p) licenses, sublicenses, leases or subleases granted by the Borrower or any of its Subsidiaries to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries;

     (q) any interest or title of a lessor, sublessor or licensor under any lease or license agreement permitted by this Agreement to which the Borrower or any of its Subsidiaries is a party;

     (r) statutory and common law landlords’ liens under leases to which the Borrower or any of its Subsidiaries is a party;

     (s) Liens arising out of any conditional sale, title retention, consignment or other similar arrangements for the sale of goods entered into by the Borrower or any of its Subsidiaries in the ordinary course of business to the extent such Liens do not attach to any assets other than the goods subject to such arrangements;

     (t) Liens (x) incurred in the ordinary course of business in connection with the purchase or shipping of goods or assets (or the related assets and proceeds thereof), which Liens are in favor of the seller or shipper of such goods or assets and only attach to such goods or assets, and (y) in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

     (u) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Marketable Investments on deposit in one or more accounts maintained by the Borrower or any Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements; and

     (v) Liens not otherwise permitted by the foregoing clauses (a) through (u) above, provided that the aggregate amount of Indebtedness and other obligations secured by Liens permitted by this clause (v) shall not exceed $250,000,000 at any time.

          8.04 Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries to, contract create, incur, assume or suffer to exist any Indebtedness, except:

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     (a) Indebtedness incurred pursuant to this Agreement and the other Credit Documents;

     (b) Intercompany Loans by and among the Borrower and its Subsidiaries, to the extent permitted by Section 8.09(i);

     (c) Indebtedness of the Borrower or any of its Subsidiaries with respect to (x) trade letters of credit incurred in the ordinary course of business (which are to be repaid in full not more than one year after the date originally incurred) to finance the purchase of tobacco or other products or goods for use in the day-to-day operations of the Subsidiaries of the Borrower consistent with such Subsidiaries’ past practices or then current industry practices and (y) letters of credit incurred in the ordinary course of business in connection with payments of foreign excise taxes in respect of tobacco sales;

     (d) Indebtedness of the Borrower and its Subsidiaries evidenced by purchase money Indebtedness described in Section 8.03(c), provided that in no event shall the aggregate principal amount of all such Indebtedness permitted pursuant to this clause (d) exceed $200,000,000 at any time outstanding;

     (e) Indebtedness of (x) a Subsidiary of the Borrower assumed in connection with the acquisition of a specific tangible asset that is secured by such Indebtedness or (y) a Person at the time such Person first becomes a Subsidiary of the Borrower (including pursuant to a Permitted Acquisition), provided that (i) such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such acquisition, and (ii) the aggregate outstanding principal amount of all Indebtedness pursuant to this clause (e) shall not exceed $100,000,000 at any time;

     (f) Indebtedness of Reynolds Tobacco constituting reimbursement obligations in respect of Litigation Bonds, and of the Subsidiary Guarantors as guarantors of Reynolds Tobacco’s obligations in respect of Litigation Bonds;

     (g) Existing Debt (and any extensions, renewals or refinancings of such Indebtedness to the extent not increasing the outstanding principal amount thereof); provided that any intercompany Indebtedness among the Borrower or any of its Subsidiaries shall be subject to the requirements applicable to Intercompany Loans as set forth in clauses (iii), (iv) and (v) of the proviso appearing in Section 8.09(i) as if such intercompany Indebtedness was an Intercompany Loan and shall be subject to extensions, renewals or refinancings only to the extent the obligor and obligee of such intercompany Indebtedness are not altered;

     (h) Indebtedness of the Borrower and its Subsidiaries with respect to performance bonds, surety bonds or customs bonds required in the ordinary course of business (but excluding any Contingent Obligations in respect of, or reimbursement obligations relating to, Litigation Bonds);

     (i) (x) Indebtedness of the Borrower and any of its Subsidiaries under, or under any guaranty of, Permitted Currency Agreements and Permitted Interest Rate

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Agreements and (y) Indebtedness of the Borrower under guaranties of RJRTH’s obligations in respect of the Stub Notes;

     (j) Indebtedness of (x) the Borrower in respect of the Initial New Senior Notes and the Subsidiary Guarantors under their guaranties of the Borrower’s obligations in respect of the Initial New Senior Notes, (y) RJRTH in respect of the Existing Senior Notes and the Subsidiary Guarantors that are Subsidiaries of RJRTH under their guaranties of RJRTH’s obligations in respect of the Existing Senior Notes and (z) the Borrower in respect of Exchange Senior Notes and the Subsidiary Guarantors under their guaranties of the Borrower’s obligations in respect of the Exchange Senior Notes; provided that that aggregate outstanding principal amount of all Indebtedness permitted by this clause (j) shall not exceed $3,100,000,000 (as reduced by any principal repayments of Initial New Senior Notes, Existing Senior Notes or Exchange Senior Notes but excluding, for avoidance of doubt, any reduction of the outstanding principal amount of the Existing Senior Notes as a result of any exchange thereof for Exchange Senior Notes as contemplated by the definition of “Exchange Senior Notes”);

     (k) Indebtedness of the Borrower in respect of Additional Senior Notes and the Subsidiary Guarantors under their guaranties of the Borrower’s obligations in respect of Additional Senior Notes; provided that (i) the aggregate outstanding principal amount of all Additional Acquisition Senior Notes, when aggregated with the aggregate outstanding principal amount of all Refinancing Senior Notes issued to refinance Additional Acquisition Senior Notes (and any other Refinancing Senior Notes subsequently issued to refinance the same), shall not exceed $500,000,000 at any time, and (ii) in the case of any issuance of Additional Non-Acquisition Senior Notes, 100% of the Net Cash Proceeds therefrom shall be applied to repay Term Loans in accordance with the requirements of Section 4.02(c);

     (l) Indebtedness of the Borrower in respect of Refinancing Senior Notes and the Subsidiary Guarantors under their guaranties of the Borrower’s obligations in respect of Refinancing Senior Notes; provided that (i) the aggregate outstanding principal amount of all Refinancing Senior Notes issued to refinance Additional Acquisition Senior Notes (and any other Refinancing Senior Notes subsequently issued to refinance the same), when aggregated with the aggregate outstanding principal amount of all Additional Acquisition Senior Notes, shall not exceed $500,000,000 at any time, and (ii) the aggregate outstanding principal amount of all Refinancing Senior Notes issued to Refinance (within the meaning of clause (ii) of the definition of “Refinance”) New Senior Notes and other Refinancing Senior Notes shall be limited as provided in the definition of “Refinancing Senior Notes”;

     (m) Indebtedness of the Borrower or any of its Subsidiaries in any manner guaranteeing or intended to guarantee, whether directly or indirectly, any leases, dividends or other monetary obligations of any Person in which the Borrower or such Subsidiary has an ownership interest, provided that the aggregate maximum stated or determinable amount (or, if not stated or determinable, the maximum reasonably anticipated liability in respect of such Indebtedness as determined in good faith by the

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Borrower or such Subsidiary) of all Indebtedness permitted pursuant to this clause (m) shall not exceed at any time an amount in excess of $150,000,000;

     (n) unsecured Contingent Obligations of the Borrower as a guarantor of any contractual obligations of any Wholly-Owned Subsidiary of the Borrower (which contractual obligations do not themselves constitute Indebtedness); and

     (o) Indebtedness of the Borrower and its Subsidiaries not otherwise permitted by any of the foregoing clauses (a) through (n), provided that the aggregate outstanding principal amount of Indebtedness pursuant to this clause (o) shall not exceed $250,000,000 at any time.

          8.05 Limitation on Dividends. The Borrower will not, and will not permit any of its Subsidiaries to, declare, pay or otherwise authorize any dividends (other than dividends payable solely in non-redeemable common stock or comparable common Equity Interests of the Borrower or any such Subsidiary, as the case may be) or return any equity capital to, its stockholders, partners, members or other equityholders or declare, authorize or make any other distribution, payment or delivery of property or cash to its stockholders, partners, members or other equity holders as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a consideration, any shares of any class of its capital stock or other Equity Interests, now or hereafter outstanding (or any warrants for or options or stock appreciation rights in respect of any of such shares or other Equity Interests), or set aside any funds for any of the foregoing purposes, and the Borrower will not and will not permit any of its Subsidiaries to purchase or otherwise acquire for consideration any shares of any class of the capital stock or other Equity Interests of the Borrower or any other Subsidiary, as the case may be, now or hereafter outstanding (or any options or warrants or stock appreciation rights issued by such Person with respect to its capital stock or other Equity Interests) (all of the foregoing “Dividends”), except that:

     (a) (i) any Subsidiary of the Borrower may pay Dividends to the Borrower or any Wholly-Owned Subsidiary of the Borrower, and (ii) any non-Wholly-Owned Subsidiary of the Borrower may pay cash Dividends to its shareholders generally so long as the Borrower or its respective Subsidiary which owns the Equity Interest in the Subsidiary paying such Dividends receives at least its proportionate share thereof (based upon its relative holding of the Equity Interests in the Subsidiary paying such Dividends and taking into account the relative preferences, if any, of the various classes of Equity Interests of such Subsidiary);

     (b) the Borrower may issue shares of Borrower Common Stock upon the exercise of any warrants or options or upon the conversion or redemption of any convertible or redeemable preferred or preference stock, and in connection with any such exercise, conversion or redemption, the Borrower may, so long as no Event of Default then exists or would result therefrom, pay cash in lieu of issuing fractional shares of Borrower Common Stock;

     (c) so long as no Event of Default then exists or would result therefrom, the Borrower may repurchase Borrower Common Stock (and/or options or warrants in

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respect thereof) pursuant to, and in accordance with the terms of, management and/or employee stock plans, provided that the aggregate amount of cash paid in respect of all such repurchases in any calendar year pursuant to this clause (c) does not exceed $40,000,000;

     (d) so long as no Event of Default then exists or would result therefrom, the Borrower may declare and pay, or otherwise pay or make, any other Dividend, provided that, at the time it is, in the case of a Non-Declared Dividend, paid or made and, in the case of any other Dividend, declared or otherwise authorized, the aggregate amount of such Dividend, when added to all Non-Declared Dividends theretofore paid or made and any other Dividends theretofore declared or otherwise authorized (or paid) pursuant to this Section 8.05(d) after the Fourth Restatement Effective Date shall not exceed an amount equal to the sum of (x) $625,000,000 plus (y) (if positive) 75% of Cumulative Adjusted Net Income plus (z) the aggregate cash proceeds (net of underwriting discounts and commissions) received by the Borrower after the Fourth Restatement Effective Date from issuances of its common equity securities (provided that the aggregate amount of such aggregate net cash proceeds received in any twelve-month period shall be deemed not to exceed $250,000,000 for purposes of this Section 8.05(d)), in each case determined at, in the case of a Non-Declared Dividend, the date paid or made and, in the case of any other Dividend, the date declared or otherwise authorized, provided that such Dividend (other than a Dividend that is a Non-Declared Dividend) is paid within 90 days of the making of such declaration or other authorization, provided, further, that Dividends may only be paid or made by the Borrower under this Section 8.05(d) if at the time of, in the case of a Non-Declared Dividend, the date paid or made and, in the case of any other Dividend, the date declared or otherwise authorized, the excess of (i) the sum of the Total Unutilized Revolving Loan Commitment and Permanent Surplus Cash, in each case at such time, over (ii) the sum of the amount of, in the case of a Non-Declared Dividend, the aggregate amount of such Non-Declared Dividend plus any other Dividends theretofore declared or otherwise authorized but then unpaid and, in the case of any other Dividend, the amount thereof so declared or otherwise authorized, shall equal at least $200,000,000;

     (e) the Borrower may issue and exchange shares of any class or series of its common stock now or hereafter outstanding for shares of any other class or series of its common stock now or hereafter outstanding; and

     (f) the Borrower may, in connection with any reclassification of its common stock and any exchange permitted by clause (e) above, pay cash in lieu of issuing fractional shares of any class or series of its common stock.

          8.06 Transactions with Affiliates . The Borrower will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of transactions, whether or not in the ordinary course of business, with any Affiliate (other than any Wholly-Owned Subsidiary of the Borrower) other than on terms and conditions substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s-length transaction with a Person other than an Affiliate; provided that the foregoing restrictions shall not apply to: (i) customary fees paid to members of the Board of Directors of the Borrower and of its Subsidiaries; (ii) the Transaction; (iii) Dividends permitted

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to be paid pursuant to Section 8.05; and (iv) the entering into, and making of payments under, employment agreements, employee benefits plans, stock option plans, indemnification provisions, severance arrangements, and other similar compensatory arrangements with officers, employees and directors of the Borrower and its Subsidiaries in the ordinary course of business.

          8.07 Consolidated Total Leverage Ratio. The Borrower will not permit the Consolidated Total Leverage Ratio at any time during a period set forth below to be greater than the ratio set forth opposite such period below:

Period	Ratio
Fourth Restatement Effective Date through and including December 31, 2007		3.00:1.00
From January 1, 2008 through the Maturity Date		2.50:1.00

          8.08 Consolidated Fixed Charge Coverage Ratio. The Borrower will not permit the Consolidated Fixed Charge Coverage Ratio for any Test Period ending after June 30, 2006 to be less than 1.00:1.00.

          8.09 Investments. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person, or purchase or acquire (in one transaction or a series of related transactions) all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person (including by way of consolidation or merger), or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or hold any cash or Marketable Investments (each of the foregoing an “Investment” and, collectively, “Investments”), except that the following shall be permitted:

     (a) any Subsidiary of the Borrower may acquire and hold accounts receivables owing to any of them, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms of such Subsidiary;

     (b) the Borrower and its Subsidiaries may acquire and hold cash, Marketable Investments and Investment Equities; provided however that the aggregate amount of cash, Marketable Investments and Investment Equities permitted to be held by (i) Non-Guarantor Subsidiaries that are Domestic Subsidiaries shall not exceed $50,000,000 for any period of five consecutive Business Days and (ii) Non-Guarantor Subsidiaries that are not Domestic Subsidiaries shall not exceed $150,000,000 for any period of five consecutive Business Days;

     (c) the Borrower and its Subsidiaries may hold the Investments held by them on the Fourth Restatement Effective Date and described on Annex IX, provided that any

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additional Investments made with respect thereto shall be permitted only if independently justified under the other provisions of this Section 8.09;

     (d) any Subsidiary of the Borrower may acquire and own investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers or in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

     (e) any Subsidiary of the Borrower may make loans and advances to their officers and employees for moving, relocation and travel expenses and other similar expenditures, in each case in the ordinary course of business in an aggregate principal amount not to exceed $5,000,000 at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances);

     (f) the Borrower may acquire and hold obligations of one or more officers, directors or other employees of the Borrower or any of its Subsidiaries in connection with such officers’, directors’ or employees’ acquisition of shares of capital stock of the Borrower, so long as no cash is paid by the Borrower or any of its Subsidiaries to such officers, directors or employees in connection with the acquisition of any such obligations;

     (g) the Borrower and any of its Subsidiaries may enter into Permitted Interest Rate Agreements and Permitted Currency Agreements;

     (h) any Subsidiary of the Borrower may acquire and hold promissory notes and other non-cash consideration issued by the purchaser of assets in connection with a sale or other disposition of such assets permitted by Sections 8.02(d) and (k);

     (i) the Borrower and its Wholly-Owned Subsidiaries may make intercompany loans and advances between and among one another (collectively, “Intercompany Loans”), provided that (i) at no time shall the aggregate outstanding principal amount of all Intercompany Loans made pursuant to this clause (i) by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties (determined without regard to any write-downs or write-offs thereof), when added to (I) the aggregate amount of contributions, capitalizations and forgiveness theretofore made by Credit Parties pursuant to Section 8.09(j) to (or in respect of) Wholly-Owned Subsidiaries that are not Credit Parties, (II) the aggregate amount of all Investments made pursuant to Section 8.09(n) (taking the Fair Market Value of any non-cash assets so invested and determined without regard to any write-downs or write-offs thereof and net of any returns of capital), and (III) the aggregate amount of all transfers and dispositions made by Subsidiaries of the Borrower in reliance on Section 8.02(d) (taking the Fair Market Value of any non-cash assets so transferred or disposed of), exceed $300,000,000, (ii) no Intercompany Loans may be made by a Credit Party to a Wholly-Owned Subsidiary that is not a Credit Party at a time that an Event of Default exists and is continuing, (iii) if any such Intercompany Loan made by a Credit Party is evidenced by a promissory note, such note shall be in form and substance reasonably satisfactory to the Administrative Agent and shall be pledged to the Collateral Agent as, and to the extent required by, the Pledge Agreement (if then in effect), (iv) each

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Intercompany Loan made pursuant to this clause (i) shall be subject to subordination as, and to the extent required by, the Intercompany Subordination Agreement and (v) any Intercompany Loan made pursuant to this clause (i) shall cease to be permitted hereunder if the obligor or obligee thereunder ceases to be the Borrower or a Wholly-Owned Subsidiary of the Borrower as contemplated above;

     (j) the Borrower and its Wholly-Owned Subsidiaries may make cash capital contributions to their respective Wholly-Owned Subsidiaries, and may capitalize or forgive any Indebtedness owed to them by a Wholly-Owned Subsidiary outstanding under clause (i) of this Section 8.09, provided that (i) the aggregate amount of such contributions, capitalizations and forgiveness made by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties, when added to (I) the aggregate outstanding principal amount of Intercompany Loans made by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties pursuant to Section 8.09(i) (determined without regard to any write-downs or write-offs thereof), (II) the aggregate amount of all Investments made pursuant to Section 8.09(n) (taking the Fair Market Value of any non-cash assets so invested and determined without regard to any write-downs or write-offs and net of any returns of capital), and (III) the aggregate amount of all transfers and dispositions made by Subsidiaries of the Borrower in reliance on Section 8.02(d) (taking the Fair Market Value of any non-cash assets so transferred or disposed of), shall not exceed an amount equal to $300,000,000 at any time, and (ii) no such contributions, capitalizations or forgivenesses may be made by a Credit Party to a Wholly-Owned Subsidiary that is not a Credit Party at any time that an Event of Default exists and is continuing;

     (k) the Borrower and any of its Subsidiaries may acquire the stock or other Equity Interests of any Person (other than the Borrower) owned by the Borrower or another Subsidiary of the Borrower by way of the dividend of such stock or Equity Interest by such other Subsidiary to the Borrower or such Subsidiary of the Borrower, so long as, in the event any such stock or other Equity Interests are held by the Borrower or a Subsidiary Guarantor immediately prior to the respective dividend, such stock or other Equity Interests are held by the Borrower or another Subsidiary Guarantor after giving effect to such dividend;

     (l) the Borrower and each Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary Guarantor may from time to time effect Permitted Acquisitions, so long as:

     (i) no Default or Event of Default shall have occurred and be continuing at the time of the consummation of the proposed Permitted Acquisition or immediately after giving effect thereto;

     (ii) the Borrower shall have given to the Administrative Agent and the Lenders at least 10 Business Days’ prior written notice of any Permitted Acquisition (or such shorter period of time as may be reasonably acceptable to the Administrative Agent), which notice shall describe in reasonable detail the principal terms and conditions of such Permitted Acquisition;

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     (iii) calculations are made by the Borrower with respect to the financial covenants contained in Sections 8.07 and 8.08, for the respective Calculation Period on a Pro Forma Basis as if the respective Permitted Acquisition (as well as all other Permitted Acquisitions theretofore consummated after the first day of such Calculation Period) had occurred on the first day of such Calculation Period, and such calculations shall show that such financial covenants would have been complied with if the Permitted Acquisition had occurred on the first day of such Calculation Period;

     (iv) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Permitted Acquisition (both before and after giving effect thereto), unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date;

     (v) the Aggregate Consideration payable for the proposed Permitted Acquisition, when added to the Aggregate Consideration paid or payable for all other Permitted Acquisitions theretofore consummated after the Fourth Restatement Effective Date, does not exceed $600,000,000; and

     (vi) if the Aggregate Consideration payable in connection with the proposed Permitted Acquisition equals or exceeds $25,000,000, the Borrower shall have delivered to the Administrative Agent and each Lender a certificate executed by its chief financial officer, certifying to the best of such officer’s knowledge, compliance with the requirements of preceding clauses (i) through (v), inclusive, and containing the calculations (in reasonable detail) required by preceding clauses (iii) and (v);

     (m) the Borrower and its Subsidiaries may make loans or advances to salespersons employed by them for purposes of enabling such salespersons to purchase “car stock” and for other ordinary course purposes, all on a basis consistent with the past practices of the Borrower and its Subsidiaries as in effect on the Fourth Restatement Effective Date; and

     (n) the Borrower and any of its Subsidiaries may make Investments not otherwise permitted by clauses (a) through (m) of this Section 8.09 (including by way of a capital contribution by the Borrower or any of its Subsidiaries to any other Person of cash, fixed assets and intellectual property but excluding capital stock or other equity interests of any Subsidiary Guarantor), so long as (x) no Default or Event of Default then exists or would result therefrom, and (y) the aggregate amount of all Investments made pursuant to this clause (n) (taking the Fair Market Value of any non-cash assets so invested and determined without regard to any write-downs or write-offs thereof and net of any returns of capital), when aggregated with (I) the aggregate amount of all transfers and dispositions made by Subsidiaries of the Borrower in reliance on Section 8.02(d) (taking the Fair Market Value of any non-cash assets so transferred or disposed of), (II)

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the aggregate amount of contributions, capitalizations and forgiveness theretofore made by Credit Parties pursuant to Section 8.09(j) to (or in respect of) Wholly-Owned Subsidiaries that are not Credit Parties and (III) the aggregate outstanding principal amount of all Intercompany Loans made pursuant to Section 8.09(i) by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties (determined without regard to any write-downs or write-offs thereof), shall not exceed $300,000,000; and

     (o) the Acquisition may be consummated in accordance with the requirements of Section 5.01F.

          8.10 No Negative Pledge. (a) The Borrower shall not, and shall not permit any of its Subsidiaries to, enter into any agreement or arrangement that prohibits or restricts (including by requiring ratable sharing of Liens) any Credit Party from entering into the Security Documents and/or granting any Lien in favor of the Collateral Agent for the benefit of the Secured Creditors other than (i) any ratable sharing of Liens provisions governing any of the New Senior Notes, the Existing Senior Notes or the Refinancing Senior Notes, in each case, to the extent such provisions shall be satisfied by the entering into of the Security Documents and the granting of Liens thereunder in favor of the Collateral Agent for the benefit of the Secured Creditors and (ii) any prohibition created in connection with any Lien permitted by Section 8.03 to the extent applicable only to the property subject to such Lien.

          (b) The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (i) pay dividends or make any other distributions on its capital stock or any other Equity Interest or participation in its profits owned by the Borrower or any of its Subsidiaries, or pay any Indebtedness owed to the Borrower or any of its Subsidiaries, (ii) make loans or advances to the Borrower or any of its Subsidiaries or (iii) transfer any of its properties or assets to the Borrower or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (1) applicable law, (2) this Agreement and the other Credit Documents, (3) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of the Borrower or any of its Subsidiaries, (4) customary provisions restricting assignment of any licensing agreement (in which the Borrower or any of its Subsidiaries is the licensee) or other contract entered into by the Borrower or any of its Subsidiaries in the ordinary course of business, (5) restrictions on the transfer of any asset pending the close of the sale of such asset, (6) restrictions on the transfer of any asset subject to a Lien permitted by Section 8.03, and (7) the New Senior Notes, the Existing Senior Notes, the Refinancing Senior Notes and the indentures governing the same.

          8.11 Modifications of Acquisition Documents and Certain Other Agreements; Limitations on Voluntary Payments, etc.. The Borrower will not, and will not permit any of its Subsidiaries to:

     (a) amend, modify, change or waive any term or provision of any Acquisition Document or the Tax Sharing Agreement, or enter into any new tax sharing agreement, other than any amendments, modifications or changes to any Acquisition Document or the Tax Sharing Agreement which do not adversely affect the interests of the Lenders in any material respect;

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     (b) make (or give any notice in respect of) any voluntary or optional payment or prepayment on or voluntary or optional redemption, repurchase or acquisition for value of, or any prepayment or redemption as a result of any asset sale, change of control or similar event of (including, in each case without limitation, by way of depositing with the trustee with respect thereto or any other Person money or securities before due for the purpose of paying when due), any New Senior Note, any Existing Senior Note and any Refinancing Senior Note; provided that, so long as no Default or Event of Default then exists or would result therefrom, (i) Exchange Senior Notes may be issued in exchange for Existing Senior Notes in accordance with the definition of “Exchange Senior Notes”, and (ii) Refinancing Senior Notes may be issued to Refinance any New Senior Notes, any Existing Senior Notes or any Refinancing Senior Notes theretofore issued to refinance New Senior Notes, Existing Senior Notes or other Refinancing Senior Notes in accordance with the requirements of the definition of “Refinancing Senior Notes”; and

     (c) amend or modify, or permit the amendment or modification of, any provision of any New Senior Note, any Existing Senior Note, any Refinancing Senior Note or any indenture or other agreement governing the foregoing, other than any amendments, modifications or changes which do not adversely affect the interests of the Lenders in any material respect.

          8.12 Maintenance of Company Separateness. The Borrower will, and will cause each of its Subsidiaries to, satisfy customary Company formalities, including the holding of regular board of directors’ and shareholders’ meetings or action by directors or shareholders without a meeting and the maintenance of Company records. Neither the Borrower nor any other Credit Party shall make any payment to a creditor of any Non-Guarantor Subsidiary in respect of any liability of any Non-Guarantor Subsidiary, and no bank account of any Non-Guarantor Subsidiary shall be commingled with any bank account of the Borrower or any other Credit Party. Finally, neither the Borrower nor any of its Subsidiaries shall take any action, or conduct its affairs in a manner, which is likely to result in the Company existence of the Borrower, any other Credit Party or any Non-Guarantor Subsidiary being ignored, or in the assets and liabilities of the Borrower or any other Credit Party being substantively consolidated with those of any other such Person or any Non-Guarantor Subsidiary in a bankruptcy, reorganization or other insolvency proceeding.

          8.13 Capital Expenditures. (a) The Borrower will not, and will not permit any of its Subsidiaries to, make any Capital Expenditures, except that (i) during the period from the Fourth Restatement Effective Date through and including December 31, 2006, the Borrower and its Subsidiaries may make Capital Expenditures, so long as the aggregate amount of all such Capital Expenditures during such period does not exceed $175,000,000, and (ii) during any fiscal year of the Borrower ended after December 31, 2006 (taken as one accounting period), the Borrower and its Subsidiaries may make Capital Expenditures, so long as the aggregate amount of all such Capital Expenditures does not exceed $200,000,000 in such fiscal year.

          (b) In addition to the foregoing, in the event that the amount of Capital Expenditures permitted to be made by the Borrower and its Subsidiaries pursuant to Section 8.13(a) above in any period or fiscal year of the Borrower, as the case may be (before giving effect to any increase in such permitted Capital Expenditure amount pursuant to this clause (b))

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is greater than the amount of Capital Expenditures actually made by the Borrower and its Subsidiaries during such period or fiscal year, as the case may be, the lesser of (x) such excess and (y) 50% of the applicable permitted scheduled Capital Expenditure amount as set forth in Section 8.13(a)(i) or (ii), as the case may be, above, may be carried forward and utilized to make Capital Expenditures in the immediately succeeding fiscal year, provided that no amounts once carried forward pursuant to this Section 8.13(b) may be carried forward to any fiscal year of the Borrower thereafter.

          (c) In addition to the foregoing, the Borrower and its Subsidiaries may make additional Capital Expenditures (which Capital Expenditures will not be included in any determination under Section 8.13(a) or (b)) constituting Permitted Acquisitions effected in accordance with the requirements of Section 8.09.

          SECTION 9. Events of Default . Upon the occurrence of any of the following specified events (each, an “Event of Default”):

          9.01 Payments. The Borrower shall (i) default in the payment when due of any principal of the Loans or (ii) default, and such default shall continue for five or more days, in the payment when due of any interest on the Loans or any Fees or any Unpaid Drawings or any other amounts owing hereunder or under any other Credit Document; or

          9.02 Representations, etc. Any representation, warranty or statement made or deemed made by any Credit Party herein or in any other Credit Document or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or

          9.03 Covenants. The Borrower or any of its Subsidiaries shall (a) default in the due performance or observance by it of any term, covenant or agreement contained in Section 7.09, 7.10, 7.12 or 8, or (b) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement and such default shall continue unremedied for a period of at least 30 days after notice to the Borrower by any Lead Agent or the Required Lenders; or

          9.04 Default Under Other Agreements. (a) The Borrower or any of its Subsidiaries shall (i) default in any payment with respect to any Indebtedness (other than the Obligations) in excess of $200,000,000, individually or in the aggregate, for the Borrower and its Subsidiaries, beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice or lapse of time is required), any such Indebtedness to become due prior to its stated maturity; or (b) any such Indebtedness shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment or as a mandatory prepayment (unless such required prepayment or

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mandatory prepayment results from a default or an event of the type that constitutes an Event of Default), prior to the stated maturity thereof; or

          9.05 Bankruptcy, etc. Any Credit Party or any of its Material Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an involuntary case under the Bankruptcy Code is commenced against any Credit Party or any of its Material Subsidiaries and the petition therefor is not controverted within 10 days after service of notice of such case on such Credit Party or such Material Subsidiary, or is not dismissed within 60 days after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of any Credit Party or any of its Material Subsidiaries; or any Credit Party or any of its Material Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to any Credit Party or any of its Material Subsidiaries; or there is commenced against any Credit Party or any of its Material Subsidiaries any such proceeding which remains undismissed for a period of 60 days; or any Credit Party or any of its Material Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or any Credit Party or any of its Material Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or any Credit Party or any of its Material Subsidiaries makes a general assignment for the benefit of creditors; or any corporate action is taken by any Credit Party or any of its Material Subsidiaries for the purpose of effecting any of the foregoing; or

          9.06 ERISA. (a) A single-employer plan (as defined in Section 4001 of ERISA) maintained or contributed to by any Credit Party or any of its Subsidiaries or any ERISA Affiliate shall fail to maintain the minimum funding standard required by Section 412 of the Code for any plan year or part thereof or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or shall provide security to induce the issuance of such waiver or extension, (b) any Plan is or shall have been terminated or the subject of termination proceedings under ERISA or an event has occurred entitling the PBGC to terminate a Plan under Section 4042(a) of ERISA, (c) any Plan shall have an Unfunded Current Liability, (d) the Borrower or any Subsidiary or any ERISA Affiliate has incurred or is likely to incur a material liability to or on account of a termination of or a withdrawal from a Plan under Section 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA, (e) the Borrower or any Subsidiary has incurred after the Fourth Restatement Effective Date liabilities (after giving effect to any reserves applicable thereto and maintained on the Fourth Restatement Effective Date) pursuant to one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA) which provide benefits to retired employees (other than as required by Section 601 of ERISA) or employee pension benefit plans (as defined in Section 3(2) of ERISA) (except in each case solely as a result of a change in estimate or adjustment of liabilities existing on the Fourth Restatement Effective Date upon the adoption or implementation of Financial Accounting Statement 106), or (f) the Borrower or any Subsidiary or any ERISA Affiliate has incurred a liability under Section 409, 502(i) or 502(l) of ERISA or Section 4971 or 4975 of the Code; and there shall result from any such event or events described in the preceding clauses of this Section 9.06 the imposition of a Lien upon the assets of the Borrower or any Subsidiary, the granting of a

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security interest, or a liability or a material risk of incurring a liability, which Lien, security interest or liability would reasonably be expected to have a Material Adverse Effect; or

          9.07 Guaranties. (i) Any Guaranty or any provision thereof shall cease to be in full force or effect, (ii) any Guarantor or any Person acting by or on behalf thereof shall deny or disaffirm such Guarantor’s obligations under its Guaranty or (iii) any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to its Guaranty and, in the case of a default in the performance of the covenant therein not to violate the provisions of Section 7 hereof, such default shall continue unremedied for a period of at least 30 days after written notice to the Borrower from the Administrative Agent; or

          9.08 Judgments. One or more judgments or decrees shall be entered against any Credit Party or any of its Material Subsidiaries involving a liability of $200,000,000 or more in the aggregate for all such judgments and decrees for the Credit Parties and their Material Subsidiaries (to the extent not paid or fully covered by insurance) and any such judgments or decrees shall not have been vacated, discharged or stayed or bonded pending appeal within 60 days from the entry thereof; or

          9.09 Security Documents. At any time the Security Documents are in effect (or required to be in effect pursuant to Section 7.10), (a) any Security Document shall cease to be in full force and effect, or shall cease to give the Collateral Agent the Liens or any of the material rights, powers and privileges purported to be created thereby in favor of the Collateral Agent, or (b) any Credit Party shall default in the due performance or observance of any material term, covenant or agreement on its part to be performed or observed pursuant to any such Security Document and such default (other than a default arising from the failure to deliver Collateral) shall continue unremedied for a period of at least 30 days after written notice to the Borrower by the Collateral Agent; provided, however, that the failure to have a perfected Lien on Collateral in favor of the Collateral Agent shall not give rise to an Event of Default under this Section 9.09, unless the aggregate fair market value of all Collateral over which the Collateral Agent fails to have a perfected Lien equals or exceeds $1,000,000; or

          9.10 Change of Control. A Change of Control shall occur;

then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent shall, upon the written request of the Required Lenders, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of any Lead Agent or any Lender to enforce its claims against the Borrower, except as otherwise specifically provided for in this Agreement (provided that, if an Event of Default specified in Section 9.05 shall occur with respect to the Borrower, the result which would occur upon the giving of written notice by the Administrative Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon all Commitments of each Lender shall forthwith terminate immediately and any Commitment Fee theretofore accrued shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of all Loans and all other Obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand,

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protest or other notice of any kind, all of which are hereby waived by the Borrower; (iii) terminate any Letter of Credit which may be terminated in accordance with its terms; (iv) direct the Borrower to pay (and the Borrower agrees that upon receipt of such notice, or upon the occurrence of an Event of Default specified in Section 9.05 with respect to the Borrower, it will pay) to the Administrative Agent at the Administrative Agent’s Office such additional amounts of cash, to be held as security for the Borrower’s reimbursement obligations for Drawings that may subsequently occur thereunder, equal to the aggregate Stated Amount of all Letters of Credit issued and then outstanding; and/or (v) direct the Collateral Agent to enforce any or all of the Security Documents then in effect.

Notwithstanding anything contained in the foregoing paragraph, if at any time within 60 days after an acceleration of the Loans pursuant to the preceding paragraph, the Borrower shall pay all arrears of interest and all payments on account of principal which shall have become due otherwise than by acceleration (with interest on principal and, to the extent permitted by law, on overdue interest, at the rates specified in this Agreement) and all Events of Default and Defaults (other than non-payment of the principal of and accrued interest on the Loans, in each case which is due and payable solely by virtue of acceleration) shall be remedied or waived pursuant to Section 12.12, then Non-Defaulting Lenders holding at least 66-2/3% of the Aggregate Exposure at such time (which Lenders shall include in any event each Lead Agent) by written notice to the Borrower, may at their option rescind and annul the acceleration and its consequences; but such action shall not affect any subsequent Event of Default or Default or impair any right consequent thereon. The provisions of this paragraph are intended merely to bind the Lenders to a decision which may be made at the election of the aforesaid percentage of the Lenders and are not intended to benefit the Borrower and do not grant the Borrower the right to require the Lenders to rescind or annul any acceleration hereunder, even if the conditions set forth herein are met.

          SECTION 10. Definitions. As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms in this Agreement shall include in the singular number the plural and in the plural the singular:

          “Acquired Business” shall mean NA Holdings, the Conwood Subsidiaries and their respective Subsidiaries.

          “Acquired Entity or Business” shall mean either (x) the assets constituting a business, division or product line of any Person not already a Subsidiary of the Borrower or (y) 100% of the Equity Interests of any such Person, which Person shall, as a result of the acquisition of such Equity Interests, become a Wholly-Owned Domestic Subsidiary of the Borrower (or shall be merged with and into the Borrower or another Wholly-Owned Domestic Subsidiary of the Borrower, with the Borrower or such Wholly-Owned Domestic Subsidiary being the surviving or continuing Person).

          “Acquisition” shall mean the acquisition by the Borrower of the Acquired Business in accordance with the terms of the Acquisition Agreement.

          “Acquisition Agreement” shall mean the Purchase Agreement, dated as of April 24, 2006, by and among Karl J. Breyer, Marshall E. Eisenberg and Thomas J. Pritzker, as

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trustees, GP Investors, L.L.C. and the Borrower, as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “Acquisition Corp.” shall mean RJR Acquisition Corp., a Delaware corporation.

          “Acquisition Documents” shall mean the Acquisition Agreement and all other agreements and documents relating to the Acquisition, as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “Additional Acquisition Senior Notes” shall mean Additional Senior Notes issued to finance a Permitted Acquisition and designated as “Additional Acquisition Senior Notes” by the Borrower in writing to the Administrative Agent at the time of the issuance thereof.

          “Additional Non-Acquisition Senior Notes” shall mean Additional Senior Notes other than Additional Acquisition Senior Notes.

          “Additional Security Documents” shall have the meaning provided in Section 7.10(d).

          “Additional Senior Notes” shall mean one or more issuances of senior notes issued by the Borrower, the Net Cash Proceeds of which are used to (x) finance a Permitted Acquisition or (y) repay principal of Term Loans and accrued but unpaid interest thereon, all of the terms and conditions of which (and of the indenture governing the same) are substantially identical to (or, from the perspective of the Lenders, more favorable than) those applicable to the Initial New Senior Notes (and the New Senior Notes Indenture), without giving effect to any repayment of such Initial New Senior Notes; provided that (i) the final stated maturity of any such senior notes may differ from that of the Initial New Senior Notes, so long as the final stated maturity of any such senior notes shall be no shorter than that the date occurring one year after the Term Loan Maturity Date, (ii) the interest rate and principal amount of any such senior notes may differ from that of the Initial New Senior Notes and (iii) in the case of any issuance of Additional Non-Acquisition Senior Notes, 100% of the Net Cash Proceeds therefrom are applied to repay Term Loans in accordance with the requirements of Section 4.02(c).

          “Adjusted Consolidated Net Income” shall mean, for any period, Consolidated Net Income for such period plus the sum of the tax adjusted amount of all net non-cash charges (including, without limitation, depreciation, amortization, deferred tax expense and non-cash interest expense) and net non-cash losses which were included in arriving at Consolidated Net Income for such period, less the tax adjusted amount of all net non-cash gains and non-cash credits which were included in arriving at Consolidated Net Income for such period.

          “ Adjusted Consolidated Working Capital” shall mean, at any time, Consolidated Current Assets (but excluding therefrom all cash and Marketable Investments) less Consolidated Current Liabilities at such time.

          “Administrative Agent” shall mean JPMCB, in its capacity as administrative agent for the Lenders hereunder, and shall include any successor thereto appointed pursuant to Section 11.09.

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          “Administrative Agent’s Office” shall mean the office of the Administrative Agent located at 270 Park Avenue, New York, New York 10017, or such other office in New York City as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

          “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

          “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power (i) to vote 20% or more of the securities having ordinary voting power for the election of directors of such corporation or (ii) to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.

          “Agent” shall mean the Administrative Agent, each Syndication Agent and each Documentation Agent (other than Mizuho Corporate Bank. Ltd.).

          “Aggregate Consideration” shall mean, with respect to any Permitted Acquisition, the sum (without duplication) of (i) the aggregate amount of all cash paid (or to be paid) by the Borrower or any of its Subsidiaries in connection with such Permitted Acquisition (including, without limitation, payments of fees and costs and expenses in connection therewith) and all contingent cash purchase price, earn-out and other similar obligations of the Borrower and its Subsidiaries (including payments for non-compete agreements benefiting the Borrower or its Subsidiaries) incurred and reasonably expected to be incurred in connection therewith (as determined in good faith by the Borrower), (ii) the aggregate principal amount of all Indebtedness assumed, incurred, refinanced and/or issued in connection with such Permitted Acquisition to the extent permitted by Section 8.04, and (iii) the Fair Market Value of all other consideration payable in connection with such Permitted Acquisition; provided that the Fair Market Value of shares of common stock of the Borrower issued (or to be issued) as consideration in connection with such Permitted Acquisition shall be excluded from any determination of “Aggregate Consideration”.

          “Aggregate RL Outstandings” shall have the meaning provided in Section 4.02(a).

          “Aggregate Exposure” shall mean, at any time, the sum of the Aggregate RL Outstandings at such time plus the aggregate outstanding principal amount of Term Loans at such time.

          “Agreement” shall mean the Original Credit Agreement as amended and restated pursuant to the First Amended and Restated Credit Agreement, further amended and restated pursuant to the Second Amended and Restated Credit Agreement, further amended and restated pursuant to the Third Amended and Restated Credit Agreement and further amended and restated pursuant to this Fourth Amended and Restated Credit Agreement, as so amended and restated and as the same may be further amended, restated, modified and/or supplemented from time to time.

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          “Applicable Corporate Credit Rating” shall mean, at any time, the corporate rating level (a rating level being, e.g., each of BBB-, BBB and BBB+, in the case of S&P) assigned by a given Rating Agency to the Borrower.

          “Applicable Facilities Credit Rating” shall mean, at any time, the rating level (a rating level being, e.g., each of BBB-, BBB and BBB+, in the case of S&P) assigned by a given Rating Agency to the Facilities.

          “Applicable Margin” shall mean, at any time:

     (i) in the case of Term Loans, maintained (x) as Eurodollar Loans, 1.875% per annum and (y) Reference Rate Loans, 0.875% per annum; provided that from and after each day of delivery (each, a “Pricing Start Date”) of a Quarterly Pricing Certificate after September 30, 2006 demonstrating a Consolidated Total Leverage Ratio of less than 2.00:1.00 as at the last day of the Test Period ended immediately prior to the relevant Pricing Start Date (but determined on a Pro Forma Basis solely to give effect to all Permitted Acquisitions (if any) and all Significant Asset Sales (if any) consummated on or prior to (but not after) the date of delivery of such certificate and any Indebtedness incurred, assumed or permanently repaid in connection therewith) to and including the applicable Pricing End Date, the Applicable Margins for Term Loans shall instead be (x) in the case of Term Loans maintained as Eurodollar Loans, 1.75% per annum and (y) in the case of Term Loans maintained Reference Rate Loans, 0.75% per annum; provided further, that, notwithstanding the foregoing, the Applicable Margins shall be those set forth above (without regard to the immediately preceding proviso) at all times during which there shall exist any Default or any Event of Default; and

     (ii) in the case of Revolving Loans and the Commitment Fee, the respective percentage per annum set forth below under the respective Type of Revolving Loan or the Commitment Fee, as the case may be, and opposite the respective Applicable Facilities Credit Ratings indicated to have been achieved at such time:

Applicable				“Applicable Margin”
Facilities Credit	“Applicable Margin”			for Reference Rate			“Applicable Margin”
Ratings Levels	for Eurodollar Loans			Loans			for Commitment Fee
Greater than or equal to Baa2 and BBB		1.50	%		0.50	%		0.75	%
Baa3 and BBB-		1.75	%		0.75	%		0.875	%
Ba1 and BB+		2.00	%		1.00	%		1.00	%
Ba2 and BB		2.25	%		1.25	%		1.25	%
Equal to or less than Ba3 and BB- (or no Applicable Facilities Credit Rating is available from either Rating Agency)		2.50	%		1.50	%		1.50	%

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; provided that (i) for purposes of the preceding pricing grid, if at any time the Applicable Facilities Credit Ratings assigned by the Rating Agencies are “split” (i.e., are not at the same corresponding level on the pricing grid above), then the Applicable Margins shall be determined by reference to the lower Applicable Facilities Credit Rating assigned by the relevant Rating Agency and (ii) at all times during which there shall exist any Default or any Event of Default, the Applicable Margins shall be determined pursuant to the pricing grid above on the same basis as if no Applicable Facilities Credit Rating were available from either Rating Agency.

          “Applicable ECF Percentage” shall mean 50%; provided, however, that if at any time the Applicable Corporate Credit Rating issued by each Rating Agency shall each be the Minimum Investment Grade Rating or higher (with at least a stable outlook), the Applicable ECF Percentage shall instead be 0%.

          “Approved Alternate Currency” shall mean Euros and Pounds Sterling.

          “Approved Fund” means (a) a CLO and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

          “Assignment Agreement” shall have the meaning provided in Section 12.04(b)(A).

          “Authorized Officer” shall mean, with respect to (i) delivering Notices of Borrowing, Notices of Conversion, Letter of Credit Requests and similar administrative notices, any person or persons that has or have been (x) authorized by the board of directors of the Borrower or (y) designated by a person authorized by the board of directors of the Borrower, in each case, to deliver such notices pursuant to this Agreement and that has or have appropriate signature cards on file with the Administrative Agent and the respective Letter of Credit Issuer; (ii) delivering financial information and officer’s certificates pursuant to this Agreement, the chief financial officer, chief accounting officer, controller or other senior financial officer of the Borrower designated as such in writing to the Administrative Agent by the Borrower, in each case to the extent acceptable to the Administrative Agent; and (iii) any other matter in connection with this Agreement or any other Credit Document, any officer (or a person or persons so designated by any two officers) of the Borrower.

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          “B&W Parent” shall mean Brown & Williamson Holdings, Inc. (f/k/a Brown & Williamson Tobacco Corporation), a Delaware corporation.

          “Bankruptcy Code” shall have the meaning provided in Section 9.05.

          “Base Rate” shall mean, for any day, the publicly announced prime rate on such date of JPMCB.

          “Borrower” shall have the meaning provided in the first paragraph of this Agreement.

          “Borrower Common Stock” shall mean the common stock, par value $0.0001 per share, of the Borrower.

          “Borrower Guaranty” shall mean, collectively, the guaranty of the Borrower pursuant to Section 13 of this Agreement.

          “Borrower Preferred Stock” shall mean the Series B preferred stock, par value $0.01 per share, of the Borrower, having the terms set forth in the Articles of Incorporation of the Borrower.

          “Borrowing” shall mean and include the incurrence of one Type of Loan of a single Tranche by the Borrower from all of the Lenders having Commitments of the respective Tranche (or from the Swingline Lender in the case of Swingline Loans) on a pro rata basis on a given date (or resulting from conversions on a given date), having in the case of Eurodollar Loans the same Interest Period, provided that Reference Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans.

          “Business Day” shall mean (i) for all purposes other than as covered by clause (ii) below, any day excluding Saturday, Sunday and any day which shall be in the City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in U.S. dollar deposits in the interbank Eurodollar market.

          “Calculation Period” shall mean, with respect to any Permitted Acquisition, any Significant Asset Sale or any other event expressly required to be calculated on a Pro Forma Basis pursuant to the terms of this Agreement, the Test Period most recently ended prior to the date of such Permitted Acquisition, Significant Asset Sale or other event for which financial statements have been delivered to the Administrative Agent pursuant to this Agreement.

          “Calyon” shall mean Calyon New York Branch and any successor corporation thereto by merger, consolidation or otherwise.

          “Capital Expenditures” shall mean, with respect to any Person, all expenditures by such Person which should be capitalized in accordance with GAAP and, without duplication, the amount of Capitalized Lease Obligations incurred by such Person; provided that the term

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“Capital Expenditures” shall in any event exclude (A) expenditures made by such Person in connection with the replacement, substitution or restoration of assets (i) to the extent financed from insurance proceeds paid on account of the loss of or damage to the assets being replaced or restored, (ii) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced or (iii) with proceeds of asset sales made in accordance with Section 8.02 and (B) the purchase price paid by such Person in connection with any Investment Equities.

          “Capital Lease”, as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is, or is required to be, accounted for as a capital lease on the balance sheet of that Person.

          “Capitalized Lease Obligations” shall mean all obligations under Capital Leases of the Borrower or any of its Subsidiaries in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP.

          “Change of Control” shall mean and include (a) at any time Continuing Directors shall not constitute a majority of the Board of Directors of the Borrower; (b) any Person or “group” (within the meaning of Rule 13d-3 and 13d-5 of the of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than B&W Parent), shall acquire, directly or indirectly, beneficial ownership (within the meaning of Rule 13d-3 and 13d-5 of the Exchange Act) of 30% or more, on a fully diluted basis, of the economic or voting interest in the Borrower’s capital stock, and (c) B&W Parent and/or any other Person or “group” (within the meaning of Rules 13d-3 and 13d-5 of the Exchange Act) shall have obtained and exercised the power to elect or designate a majority of the Board of Directors of the Borrower.

          “CLO” shall mean any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender.

          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.

          “Collateral” shall mean all property (whether real, personal or otherwise) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document (including, without limitation, all Mortgaged Properties and all cash, Marketable Investments and other cash equivalents delivered as collateral pursuant to Section 4.02(a) or 9).

          “Collateral Agent” shall mean the Administrative Agent acting as Collateral Agent under the Security Documents.

          “Commitment” shall mean any of the commitments of any Lender to extend credit to the Borrower pursuant to this Agreement, i.e., a Term Loan Commitment or a Revolving Loan Commitment.

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          “Commitment Fee” shall have the meaning provided in Section 3.01(a).

          “Commodities Agreement” shall mean any forward contract, futures contract, option contract or similar agreement or arrangement, in each case intended to protect the Persons entering into same from fluctuations in the price of, or shortage of supply of, commodities.

          “Company” shall mean any corporation, limited liability company, partnership or other business entity (or the adjectival form thereof, where appropriate).

          “Consolidated Cash Interest Expense” shall mean, for any period, the sum of (x) the remainder of (i) consolidated interest expense of the Borrower and its Subsidiaries (excluding, however, to the extent included in such consolidated interest expense, (I) non-cash interest expense and (II) amortization of debt issuance cost) minus (ii) consolidated cash interest income of the Borrower and its Subsidiaries, plus (y) the product of (i) the amount of all cash Dividend requirements to Persons other than Borrower or any of its Subsidiaries (whether or not declared or paid) on Disqualified Preferred Stock of the Borrower and any Preferred Equity Interests of any of its Subsidiaries paid, accrued or scheduled to paid or accrued during such period multiplied by (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated Federal, state, local and foreign income tax rate (expressed as a decimal number between one and zero) of the Borrower as reflected in the audited consolidated financial statements of the Borrower for its most recently completed fiscal year, which amounts described in preceding clause (y) shall be treated as interest expense of the Borrower and its Subsidiaries for purposes of this definition regardless of the treatment of such amounts under GAAP, it being understood that the determination of the amounts specified in clauses (x)(i)(I) and (x)(i)(II) shall be made on a basis consistent with the methodology utilized by the Borrower to determine such amounts on the Fourth Restatement Effective Date.

          “Consolidated Current Assets” shall mean, at any time, the consolidated current assets of the Borrower and its Subsidiaries at such time.

          “Consolidated Current Liabilities” shall mean, at any time, the consolidated current liabilities of the Borrower and its Subsidiaries at such time, but excluding the current portion of any Indebtedness under this Agreement and the current portion of any other long-term Indebtedness which would otherwise be included therein.

          “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period (without giving effect to (x) any extraordinary gains or extraordinary losses, (y) any non-cash income or charges (to the extent such non-cash income or charges, as the case may be, do not give rise to any cash receipt or payment, as the case may be, in a future period), and (z) any gains or losses from sales of assets other than inventory sold in the ordinary course of business) adjusted by (I) adding thereto (in each case to the extent deducted in determining Consolidated Net Income for such period), without duplication, the amount of (i) total interest expense (inclusive of amortization of deferred financing fees and other original issue discount and banking fees, charges and commissions (e.g., letter of credit fees and commitment fees)) of the Borrower and its Subsidiaries determined on a consolidated basis for such period, (ii) provision for taxes based on income and foreign withholding taxes for the Borrower and its Subsidiaries determined on a consolidated basis for such period, (iii) all depreciation and

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amortization expense of the Borrower and its Subsidiaries determined on a consolidated basis for such period, (iv) in the case of any period which includes any portion of any fiscal quarter ended after the Fourth Restatement Effective Date and on or prior to December 31, 2007, an amount equal to the Post-Closing Integration Charges actually recorded or accrued during such period, and (v) in the case of any period including the fiscal quarters of the Borrower ended June 30, 2006 and September 30, 2006, the amount of all fees and expenses incurred in connection with the Transaction during such fiscal quarter and (II) subtracting therefrom the amount of all cash payments made by the Borrower and its Subsidiaries during such period pursuant to any settlement with respect to tobacco liability which otherwise did not reduce Consolidated Net Income for such period or a prior period. For the avoidance of doubt, it is understood and agreed that, to the extent any amounts are excluded from Consolidated Net Income by virtue of the proviso to the definition thereof contained herein, any add backs to Consolidated Net Income in determining Consolidated EBITDA as provided above shall be limited (or denied) in a fashion consistent with the proviso to the definition of Consolidated Net Income contained herein. Notwithstanding anything to the contrary contained above, for purposes of determining Consolidated EBITDA for any Test Period which ends prior to the first anniversary of the Fourth Restatement Effective Date, Consolidated EBITDA for all portions of such period occurring prior to the Fourth Restatement Effective Date shall be calculated in accordance with the definition of Test Period contained herein.

          “Consolidated Fixed Charge Coverage Ratio” shall mean, for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Fixed Charges for such period; provided that for purposes of any calculation of the Consolidated Fixed Charge Coverage Ratio pursuant to Section 8.09(l) and the definition of “Incremental Commitment Requirements” only, Consolidated EBITDA and Consolidated Indebtedness shall be determined on a Pro Forma Basis in accordance with the requirements of the definition of “Pro Forma Basis” contained herein.

          “Consolidated Fixed Charges” shall mean, for any period, the sum, without duplication, of (i) Consolidated Cash Interest Expense for such period, (ii) the scheduled principal amount of all amortization payments on all Indebtedness of the Borrower and its Subsidiaries for such period (including the principal component of all Capitalized Lease Obligations) as determined on the first day of such period (or, with respect to a given issue of Indebtedness incurred thereafter, on the date of the incurrence thereof), (iii) the amount of all cash payments made by the Borrower and its Subsidiaries in respect of income taxes or income tax liabilities during such period (net of cash tax refunds received by the Borrower and its Subsidiaries during such period and excluding taxes related to asset sales not in the ordinary course of business), (iv) the aggregate amount of all Capital Expenditures made by the Borrower and its Subsidiaries during such period (other than Capital Expenditures, to the extent financed with equity proceeds, asset sale proceeds, insurance proceeds or Indebtedness), and (v) the aggregate amount of all cash Dividends (including stock repurchases) made or paid by the Borrower pursuant to Sections 8.05(c), (d) and (f) during such period. Notwithstanding anything to the contrary contained above, to the extent Consolidated Fixed Charges are to be determined for any period which includes any fiscal quarter of Borrower (or portion thereof) occurring prior to the Fourth Restatement Effective Date, Consolidated Fixed Charges for such fiscal quarter shall be calculated in accordance with the definition of Test Period contained herein.

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          “Consolidated Indebtedness” shall mean, at any time, the sum of (without duplication) (i) all indebtedness of Borrower and its Subsidiaries for borrowed money (including obligations evidenced by bonds, notes or similar instruments), (ii) the aggregate amount of all Capitalized Lease Obligations of Borrower, (iii) all Indebtedness of the types described in clause (i), (ii), (iii), (iv), or (v) of this definition secured by any Lien on any property owned by Borrower or any of its Subsidiaries, whether or not such Indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the lesser of (x) the amount of such Indebtedness that is secured by such Lien or (y) the fair market value of the property to which such Lien relates as determined in good faith by such Person), (iv) all Contingent Obligations of Borrower and any of its Subsidiaries for Indebtedness of another Person (regardless of any contrary treatment under GAAP), and (v) all Indebtedness of Borrower and its Subsidiaries of the type described in clauses (ii), (iii), (iv) and (viii) of the definition of Indebtedness contained herein; provided that for purposes of this definition, (x) the amount of Indebtedness in respect of Hedging Agreements shall be at any time the unrealized net loss position, if any, of Borrower and/or its Subsidiaries thereunder on a marked-to-market basis determined no more than one month prior to such time, (y) Indebtedness (including Contingent Obligations) in respect of surety bonds issued in the ordinary course of business and consistent with the past practices of Borrower and its Subsidiaries as in effect on the Fourth Restatement Effective Date (excluding, however, for avoidance of doubt, any Litigation Bond) shall be excluded in any determination of “Consolidated Indebtedness” and (z) to the extent issued to any Person other than Borrower or any of its Subsidiaries, any Disqualified Preferred Stock of the Borrower and any Preferred Equity Interests of any of its Subsidiaries shall be treated as Indebtedness, with an amount equal to the greater of the liquidation preference or the maximum mandatory fixed repurchase price of any such outstanding Preferred Equity Interests deemed to be a component of Consolidated Indebtedness.

          “Consolidated Net Income” shall mean, for any period, the net income (or loss) of the Borrower and its Subsidiaries determined on a consolidated basis for such period (taken as a single accounting period) in accordance with GAAP, provided that the following items shall be excluded in computing Consolidated Net Income (without duplication): (i) the net income (or loss) of any Person in which a Person or Persons other than the Borrower and its Wholly-Owned Subsidiaries has an Equity Interest or Equity Interests to the extent of such Equity Interests held by Persons other than the Borrower and its Wholly-Owned Subsidiaries in such Person, (ii) except for determinations expressly required to be made on a Pro Forma Basis, the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or all or substantially all of the property or assets of such Person are acquired by a Subsidiary and (iii) the net income of any Subsidiary to the extent that the declaration or payment of cash dividends or similar cash distributions by such Subsidiary of such net income is not at the time permitted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary.

          “Consolidated Total Leverage Ratio” shall mean, at any time, the ratio of (x) Consolidated Indebtedness at such time to (y) Consolidated EBITDA for the Test Period then most recently ended; provided that (i) for purposes of any calculation of the Consolidated Total Leverage Ratio pursuant to this Agreement, Consolidated EBITDA shall be determined on a Pro Forma Basis in accordance with clause (iii) of the definition of “Pro Forma Basis” contained

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herein and (ii) for purposes of any calculation of the Consolidated Total Leverage Ratio pursuant to Section 8.09(l) and the definition of “Incremental Commitment Requirements” only, Consolidated Indebtedness shall be determined on a Pro Forma Basis in accordance with the requirements of the definition of “Pro Forma Basis” contained herein.

          “Contingent Obligations” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other monetary obligations including reimbursement obligations in respect of litigation bonds (the “primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the lesser of (x) the maximum stated or determinable amount of such Contingent Obligation and (y) the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

          “Continuing Director” shall mean, at any date, an individual (x) who is a member of the Board of Directors of Borrower on the Fourth Restatement Effective Date, (y) who, as at such date, has been a member of such Board of Directors for at least the twelve preceding months, or (z) who has been nominated, or designated by B&W Parent pursuant to a governance agreement, to be a member of such Board of Directors by a majority of the other Continuing Directors then in office.

          “Conwood Holdings” shall mean Conwood Holdings, Inc. (f/k/a Pinch Acquisition Corp.), a Wholly-Owned Subsidiary of the Borrower formed to acquire all of the capital stock of NA Holdings, Inc. pursuant to the Acquisition.

          “Conwood Subsidiaries” shall mean, collectively, (i) Conwood Company, L.P., (ii) Conwood Sales Co., L.P., (iii) Rosswil LLC and (iv) Scott Tobacco LLC.

          “Credit Card Issuer” shall mean JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under the Credit Agreement for any reason) and their respective successors or assigns.

          “Credit Documents” shall mean this Agreement, the Notes, the Subsidiary Guaranty, the Intercompany Subordination Agreement and (if then in effect) the Security Documents.

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          “Credit Event” shall mean and include the making of a Loan and/or the issuance of a Letter of Credit.

          “Credit Party” shall mean each of the Borrower, each Subsidiary Guarantor and, prior to its dissolution as contemplated by Section 7.14, NA Holdings.

          “Cumulative Adjusted Net Income” shall mean, at any time for any determination thereof, the sum of (i) Consolidated Net Income for the period (taken as one accounting period) commencing on July 1, 2006 and ending on the last day of the last fiscal quarter of the Borrower then ended plus (ii) all losses from debt retirement deducted in determining Consolidated Net Income for the period referred to in clause (i) above plus (iii) all trademark and goodwill amortization and all non-cash impairments of goodwill and trademarks (if any) of the Borrower and its Subsidiaries for the period referred to in clause (i) above, in each case to the extent deducted in determining such Consolidated Net Income for such period, less (iv) any tax benefit relating to the losses described in preceding clause (ii) and included in determining Consolidated Net Income for the period referred to in clause (i) above.

          “Currency Agreement” shall mean any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement designed to protect the Persons entering into same against fluctuations in currency values.

          “Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

          “Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.

          “Disqualified Preferred Stock” shall mean any Preferred Equity Interests of the Borrower other than Qualified Preferred Stock.

          “Dividends” shall have the meaning provided in Section 8.05.

          “Documentation Agent” shall mean each of General Electric Capital Corporation and Mizuho Corporate Bank. Ltd. and any successor to any such Person, by merger, consolidation or otherwise.

          “Documents” shall mean and include (i) the Credit Documents, (ii) the Initial New Senior Notes Documents, (iii) the Acquisition Documents and (iv) all other material documents, agreements and instruments executed in connection with the Transaction.

          “Domestic Subsidiary” shall mean, as to any Person, any Subsidiary of such Person incorporated or organized in the United States or any State or territory thereof.

          “Drawing” shall have the meaning provided in Section 2.04(b).

          “Eligible Transferee” shall mean and include a commercial bank, financial institution or other “accredited investor” (as defined in SEC Regulation D); provided that Eligible

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Transferee shall not include any Person (or any Affiliate thereof) who competes with the Borrower and its Subsidiaries in the tobacco business.

          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

          “Environmental Liability” means any liability, contingent or otherwise (including any liability or damages, costs or environmental remediation, fines or penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

          “Equity Interests” of any Person shall mean any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interest in (however designated) equity of such Person, including any common stock, preferred stock, any limited or general partnership interest and any limited liability company membership interest.

          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

          “ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) which together with the Borrower, any Subsidiary or any Credit Party would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

          “Eurodollar Loans” shall mean each Term Loan or Revolving Loan bearing interest at the rates provided in Section 1.08(b).

          “Eurodollar Rate” shall mean, with respect to each Interest Period for a Eurodollar Loan, (i) the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen (or any successor page) for Dollar deposits with maturities comparable to such Interest Period as of 11:00 A.M. (London time) on the date which is two (2) Business Days prior to the commencement of such Interest Period or, if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any successor page), the offered quotations to first-class banks in the London interbank market by JPMCB for Dollar deposits of amounts in same day funds comparable to the outstanding principal amount of such Dollar denominated Loan with maturities comparable to such Interest Period determined as of 11:00 A.M. (London time) on the date which is two Business Days prior to the commencement of such Interest Period divided (and rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation,

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any marginal, emergency, supplemental, special or other reserves) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D).

          “Event of Default” shall have the meaning provided in Section 9.

          “Excess Cash Flow” shall mean, for any period, the remainder of (a) the sum of, without duplication, (i) Adjusted Consolidated Net Income for such period and (ii) the decrease, if any, in Adjusted Consolidated Working Capital from the first day to the last day of such period, minus (b) the sum of, without duplication, (i) the aggregate amount of all Capital Expenditures made by the Borrower and its Subsidiaries during such period (other than Capital Expenditures to the extent financed with equity proceeds, Equity Interests, asset sale proceeds, insurance proceeds or Indebtedness), (ii) the aggregate amount of permanent principal payments of Indebtedness for borrowed money of the Borrower and its Subsidiaries and the permanent repayment of the principal component of Capitalized Lease Obligations of the Borrower and its Subsidiaries during such period (other than (1) repayments made with the proceeds of asset sales, sales or issuances of Equity Interests, insurance or Indebtedness and (2) payments of Loans and/or other Obligations, provided that repayments of Loans shall be deducted in determining Excess Cash Flow to the extent such repayments were (x) required as a result of a Scheduled Repayment pursuant to Section 4.02(b) or (y) made as a voluntary prepayment pursuant to Section 4.01 with internally generated funds), (iii) the increase, if any, in Adjusted Consolidated Working Capital from the first day to the last day of such period, (iv) the aggregate amount of cash Dividends (including stock repurchases) made or paid by the Borrower pursuant to Section 8.05(d) during such period and (v) the aggregate amount of cash payments actually made by the Borrower and its Subsidiaries during such period to fund pension liabilities of the Borrower and its Subsidiaries (whether made on a voluntary basis or to comply with minimum contribution requirements of the applicable provisions of the Code), to the extent the amount of such cash payments are not otherwise deducted in determining Adjusted Consolidated Net Income; provided that in no event shall the aggregate amount deducted from the calculation of “Excess Cash Flow” pursuant to this clause (v) as a result of a voluntary funding of pension liabilities exceed $150,000,000.

          “Excess Cash Payment Date” shall mean the date occurring 110 days after the last day of each fiscal year of the Borrower (commencing with the fiscal year of the Borrower ended December 31, 2007).

          “Excess Cash Payment Period” shall mean, with respect to the repayment required on each Excess Cash Payment Date, the immediately preceding fiscal year of the Borrower.

          “Exchange Senior Notes” shall mean, collectively, the senior notes issued by the Borrower pursuant to the New Senior Notes Indenture in exchange for Existing Senior Notes pursuant to the “Note Exchange Offer” described in that certain Offer to Exchange and Consent Solicitation Statement, dated May 19, 2006, having terms (other than interest rate and tenor) identical to the Initial New Senior Notes, in each case as the same may be amended, modified, and/or supplemented from time to time in accordance with the terms hereof and thereof.

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          “Excluded Collateral” shall mean (i) the Equity Interests of each Subsidiary of RJRTH (other than Reynolds Tobacco) and the Excluded Joint Ventures, (ii) the leasehold interest and rights of Reynolds Tobacco in and to property located at the Zachary Smith Reynolds Airport, under a certain lease agreement with the Airport Commission of Forsyth County, dated January 1, 1980, recorded in Book 1298, Page 1365, Forsyth County Registry, and assigned and transferred to Reynolds Tobacco by its former parent company pursuant to an Assignment of Lease, dated April 27, 1989, to the extent the grant of a leasehold mortgage in such leasehold is prohibited by the terms thereof, (iii) any property or asset of Santa Fe or Lane other than (x) intellectual property and (y) any property or asset a security interest in which can be perfected by the filing of a UCC financing statement in any relevant jurisdiction, and (iv) at any time prior to the exchange of at least 51% in aggregate principal amount of each series of Existing Senior Notes for Exchange Senior Notes (and the elimination of the lien covenant in the indentures governing the same as consented to by the requisite holders of the Existing Senior Notes), all indebtedness and other obligations owing by a Subsidiary of RJRTH to RJRTH or any of its Subsidiaries.

          “Excluded Joint Ventures” shall mean and include Targacept, Inc., Large Scale Biology Corporation and Technology Concepts and Design, Inc.

          “Existing Debt” shall mean the Indebtedness of the Subsidiaries of the Borrower outstanding on the Fourth Restatement Effective Date and set forth in Annex VII (other than Indebtedness evidenced by Initial New Senior Notes and Existing Senior Notes), provided that such Indebtedness (excluding intercompany Indebtedness among the Borrower and its Subsidiaries) shall not exceed $89,000,000 in aggregate outstanding principal amount.

          “Existing Interest Rate Swap Agreement” shall mean that certain Interest Rate Swap, dated as of May 16, 2002, between the Borrower and Calyon (Ref #32834), as in effect on the Fourth Restatement Effective Date.

          “Existing Letter of Credit” shall have the meaning provided in Section 2.01(c).

          “Existing Liens” shall mean the Liens on the assets and properties of the Subsidiaries of the Borrower outstanding on the Fourth Restatement Effective Date and set forth in Annex VI, provided that the Indebtedness secured by all such Liens shall not exceed $3,000,000 in aggregate outstanding principal amount.

          “Existing Mortgage Policies” shall mean the Mortgage Policies for each Existing Mortgaged Property pursuant to the Third Amended and Restated Credit Agreement.

          “Existing Mortgaged Properties” shall mean all real property of the Borrower and its Subsidiaries listed on Annex VIII and designated as “Existing Mortgaged Properties” therein.

          “Existing Mortgages” shall mean all Mortgages granted by the Borrower and its Subsidiaries pursuant to the Third Amended and Restated Credit Agreement and which have not been released prior to the Fourth Restatement Effective Date.

          “Existing Senior Notes” shall mean, collectively, (i) RJRTH’s 6.50% Notes due June 1, 2007 in an initial aggregate principal amount equal to $300,000,000 (ii) RJRTH’s

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7.875% Notes due May 15, 2009 in an initial aggregate principal amount equal to $200,000,000, (iii) RJRTH’s 6.50% Notes due July 15, 2010 in an initial aggregate principal amount equal to $300,000,000, (iv) RJRTH’s 7.25% Notes due June 1, 2012 in an initial aggregate principal amount equal to $450,000,000, and (v) RJRTH’s 7.30% Notes due July 15, 2015 in an initial aggregate principal amount equal to $200,000,000, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “Facilities” shall mean the credit facilities evidenced by the Agreement.

          “Facing Fee” shall have the meaning provided in Section 3.01(c).

          “Fair Market Value” shall mean, with respect to any asset (including any Equity Interests of any Person), the price at which a willing buyer, not an Affiliate of the seller, and a willing seller who does not have to sell, would agree to purchase and sell such asset, as determined in good faith by senior management of the Borrower or its respective Subsidiary making such sale.

          “Federal Funds Rate” shall mean for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.

          “Fees” shall mean all amounts payable pursuant to, or referred to in, Section 3.01.

          “FHS” shall mean FHS, Inc., a Delaware corporation, and any successor thereto by merger, consolidation, reincorporation or otherwise.

          “First Amended and Restated Credit Agreement” shall have the meaning provided in the first recital of this Agreement.

          “First Restatement Effective Date” shall mean the Restatement Effective Date under, and as defined in, the First Amended and Restated Credit Agreement.

          “Fitch” shall mean Fitch Ratings.

          “Fourth Restatement Effective Date” shall have the meaning provided in Section 5.01.

          “Fourth Restatement Execution Date” shall have the meaning provided in Section 12.10.

          “GAAP” shall mean generally accepted accounting principles in the United States of America as in effect from time to time; it being understood and agreed that determinations in

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accordance with GAAP for purposes of Section 8, including defined terms as used therein, shall be made pursuant to Section 12.07(a).

          “GMB” shall mean GMB, Inc., a North Carolina corporation.

          “Government Acts” shall have the meaning provided in Section 2.06(a).

          “Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

          “Granting Lender” shall have the meaning provided in Section 12.04.

          “Guaranteed Creditors” shall mean and include the Administrative Agent, the Collateral Agent, each Lead Agent, each Lender, the Swingline Lender, each Letter of Credit Issuer, each Credit Card Issuer, each party (other than any Credit Party) party to (or participating in) a Hedging Agreement to the extent such party is a Lender or an affiliate thereof (even if such Lender subsequently ceases to be a Lender under this Agreement for any reason) and their subsequent assigns and Calyon, as counterparty to the Existing Interest Rate Swap Agreement.

          “Guaranteed Obligations” shall mean (x) all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Guaranteed Party owing under any Secured Credit Card Agreement entered into by such Guaranteed Party with any Credit Card Issuer, whether now in existence or hereafter arising, and the due performance and compliance by each Guaranteed Party with all terms, conditions and agreements contained therein and (y) all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Guaranteed Party owing under any Hedging Agreement entered into by such Guaranteed Party with any Guaranteed Creditor, whether now in existence or hereafter arising, and the due performance and compliance by each Guaranteed Party with all terms, conditions and agreements contained therein.

          “Guaranteed Party” shall mean the Borrower and each other Subsidiary of the Borrower (other than any Non-Guarantor Subsidiary) party to a Secured Credit Card Agreement with any Credit Card Issuer or a Hedging Agreement with any Guaranteed Creditor.

          “Guarantor” shall mean the Borrower and each Subsidiary Guarantor.

          “Guaranty” shall mean and include the Subsidiary Guaranty and the Borrower Guaranty.

          “Guaranty Event” shall mean that the Applicable Corporate Credit Rating issued by at least one Rating Agency is at least one level below the Minimum Investment Grade Rating.

          “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or

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petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

          “Hedging Agreements” shall mean and include Commodities Agreements, Currency Agreements, Interest Rate Agreements and all other similar hedging arrangements.

          “Incremental Commitment Requirements” shall mean, with respect to any provision of an Incremental RL Commitment on a given Incremental RL Commitment Date, the satisfaction of each of the following conditions on or prior to the effective date of the respective Incremental RL Commitment Agreement: (1) no Default or Event of Default then exists or would result therefrom, (2) all of the representations and warranties contained herein and in the other Credit Documents are true and correct in all material respects at such time (unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); (3) calculations are made by the Borrower demonstrating compliance with the covenants contained in Sections 8.07 and 8.08 for the Test Period most recently ended prior to such date of effectiveness, on a Pro Forma Basis, as if the Revolving Loans to be made pursuant to such Incremental RL Commitments (assuming the full utilization thereof) had been incurred on the first day of such Test Period; (4) the delivery by the Borrower to the Administrative Agent of an officer’s certificate executed by an Authorized Officer of the Borrower and certifying as to compliance with preceding clauses (1), (2) and (3) and containing the calculations (in reasonable detail) required by preceding clause (3); (5) the delivery by the Borrower to the Administrative Agent of an acknowledgement in form and substance reasonably satisfactory to the Administrative Agent and executed by each Subsidiary Guarantor, acknowledging that such Incremental RL Commitment and all credit extensions subsequently made pursuant to such Incremental RL Commitment shall constitute (and be included in the definition of) “Guaranteed Obligations” under the Subsidiary Guaranty; (6) the delivery by the Borrower to the Administrative Agent of an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Credit Parties reasonably satisfactory to the Administrative Agent and dated such date, covering such of the matters set forth in the opinions of counsel delivered to the Administrative Agent on the Fourth Restatement Effective Date pursuant to Section 5.01 as may be reasonably requested by the Administrative Agent, and such other matters incident to the transactions contemplated thereby as the Administrative Agent may reasonably request, (7) the delivery by the Borrower and the other Credit Parties to the Administrative Agent of such other officers’ certificates, board of director resolutions and evidence of good standing as the Administrative Agent shall reasonably request and (8) the completion by the Borrower and the other Credit Parties of such other actions as the Administrative Agent may reasonably request in connection with the provision of such Incremental RL Commitment.

          “Incremental RL Commitment” shall mean, for any Lender, any commitment by such Lender to make Revolving Loans pursuant to Section 1.16(b) as agreed to by such Lender in the respective Incremental RL Commitment Agreement delivered pursuant to Section 1.16; it being understood, however, that on each date upon which an Incremental RL Commitment of any Lender becomes effective, such Incremental RL Commitment of such Lender shall be added to (and thereafter become a part of) the Revolving Loan Commitment of such Lender for all purposes of this Agreement as contemplated by Section 1.16.

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          “Incremental RL Commitment Agreement” shall mean each Incremental RL Commitment Agreement in the form of Exhibit K (appropriately completed) executed in accordance with Section 1.16.

          “Incremental RL Commitment Date” shall mean each date upon which an Incremental RL Commitment under an Incremental RL Commitment Agreement becomes effective as provided in Section 1.16(b).

          “Incremental RL Lender” shall have the meaning specified in Section 1.16(b).

          “Indebtedness” of any Person shall mean (i) all indebtedness of such Person for borrowed money, (ii) the deferred purchase price of assets or services which in accordance with GAAP would be shown on the liability side of the balance sheet of such Person, (iii) the maximum amount available to be drawn or paid under all letters of credit, bankers’ acceptances, bank guaranties issued for the account of such Person and all unpaid drawings and unreimbursed payments in respect of such letters of credit, bankers’ acceptances and bank guaranties, (iv) the maximum amount available to be drawn or paid under all surety, appeal and litigation bonds and similar obligations issued for the account of such Person and all unreimbursed payments in respect of such surety, appeal and litigation bonds and similar obligations, (v) all Indebtedness of a second Person secured by any Lien on any property owned by such first Person, whether or not such Indebtedness has been assumed, (vi) all Capitalized Lease Obligations of such Person, (vii) all obligations of such Person to pay a specified purchase price for goods or services whether or not delivered or accepted, i.e., take-or-pay and similar obligations, (viii) all obligations of such Person under Hedging Agreements and (ix) all Contingent Obligations of such Person, provided that Indebtedness shall not include (x) trade payables and accrued expenses, in each case arising in the ordinary course of business and (y) any obligation of the Borrower or any Subsidiary thereof to purchase tobacco and/or other products, services and produce utilized in its business pursuant to agreements entered into in the ordinary course of business on a basis consistent with the Borrower’s or such Subsidiary’s past practices or then current industry practices; and provided, further, that (a) for the purposes of Section 9.04, the amount of Indebtedness represented by any Hedging Agreement shall be at any time the unrealized net loss position, if any, of the Borrower and/or its Subsidiaries thereunder on a marked-to-market basis determined no more than one month prior to such time and (b) for the purposes of determining the Indebtedness permitted to be secured pursuant to Section 8.03(j) or outstanding under Section 8.04(o), the amount of Indebtedness included in such determination that is attributable to all Hedging Agreements secured or permitted thereunder, as the case may be, shall be an amount equal to the Net Termination Value, if any, of all such Hedging Agreements (less, in the case of any determination of Indebtedness permitted to be outstanding under Section 8.04(o) only, the aggregate amount of cash and cash equivalents pledged to secure obligations under all such Hedging Agreements pursuant to customary cash collateral arrangements).

          “Indemnitee” shall have the meaning provided in Section 12.01.

          “Information” shall have the meaning provided in Section 12.15.

          “Initial New Senior Notes” shall mean, collectively, (i) the Borrower’s 7.25% Senior Secured Notes due 2013 in an initial aggregate principal amount equal to $625,000,000,

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(ii) the Borrower’s 7.625% Senior Secured Notes due 2016 in an initial aggregate principal amount equal to $775,000,000 and (iii) the Borrower’s 7.75% Senior Secured Notes due 2018 in an initial aggregate principal amount equal to $250,000,000, in each case issued pursuant to the New Senior Notes Indenture, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “Initial New Senior Notes Documents” shall mean (i) the Initial New Senior Notes, (ii) the New Senior Notes Indenture and (iii) all other documents executed and delivered in connection with the issuance of the Initial New Senior Notes, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “Insignificant Subsidiary” shall mean, at any time, any Subsidiary of the Borrower (other than any Subsidiary Guarantor) the gross book value of the assets of which does not exceed $10,000,000.

          “Intercompany Loans” shall have the meaning provided in Section 8.09(i).

          “Intercompany Subordination Agreement” shall have the meaning provided in Section 5.01K.

          “Interest Period” shall mean, with respect to any Loan, the interest period applicable thereto, as determined pursuant to Section 1.09.

          “Interest Rate Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate futures contract, interest rate option contract or other similar agreement or arrangement.

          “Investment Equities” shall mean and include (x) equity securities (i) of any entity in which the Borrower and its Subsidiaries do not collectively own more than 5% of the outstanding equity securities of such entity, (ii) which are listed and regularly traded on a nationally recognized U.S. stock exchange or market and (iii) which are not restricted as to resale by the Borrower or its Subsidiaries (whether by contract, law or otherwise), (y) preferred stock and/or “income notes” of any investment vehicle owned by the Borrower or any of its Subsidiaries, so long as (i) such investment vehicle invests solely in debt securities and (ii) the aggregate amount of cash used to acquire such preferred stock after the Fourth Restatement Effective Date does not exceed $35,000,000 and (z) the Equity Interests of the Excluded Joint Ventures owned by the Borrower or any of its Subsidiaries.

          “Investments” shall have the meaning provided in Section 8.09.

          “JPMCB” shall mean JPMorgan Chase Bank, N.A. and any successor corporation thereto by merger, consolidation or otherwise.

          “Lane” shall mean Lane Limited, a New York corporation.

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          “LCPI” shall mean Lehman Commercial Paper Inc. and any successor corporation thereto by merger, consolidation or otherwise.

          “L/C Termination Date” shall mean the fifth Business Day preceding the Revolving Loan Maturity Date.

          “Lead Agent” shall mean and include JPMCB and LCPI and any successor to either thereof appointed pursuant to Section 11.09, it being understood that such term, when used herein, shall include JPMCB or LCPI, as the case may be, acting in its capacity as Administrative Agent, Collateral Agent or Syndication Agent, as applicable.

          “Lender” shall have the meaning provided in the first paragraph of this Agreement.

          “Lender Default” shall mean (i) the refusal (which has not been retracted) of a Lender to make available its portion of any Borrowing or to fund its portion of any unreimbursed payment under Section 2.03(c) or (ii) a Lender having notified any Lead Agent and/or the Borrower that it does not intend to comply with its obligations under Section 1.01(a) or 1.01(c) or under Section 2.03(c), in the case of either (i) or (ii) as a result of the appointment of a receiver or conservator with respect to such Lender at the direction or request of any regulatory agency or authority.

          “Letter of Credit” shall mean each standby letter of credit issued pursuant to Section 2.01.

          “Letter of Credit Fee” shall have the meaning provided in Section 3.01(b).

          “Letter of Credit Issuer” shall mean and include (i) JPMCB, (ii) each other Lender requested by the Borrower to issue Letters of Credit to the extent consented to by such Lender and (iii) with respect to the Existing Letters of Credit, the Lender designated as the issuer thereof on Annex III.

          “Letter of Credit Outstandings” shall mean, at any time, the sum of, without duplication, (i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit (in the case of Letters of Credit denominated in a currency other than U.S. Dollars, calculating the Stated Amount and Unpaid Drawings with respect thereto in accordance with the requirements of Section 12.07(c)).

          “Letter of Credit Request” shall have the meaning provided in Section 2.02.

          “Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement (other than customary negative pledge clauses) to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof).

          “Litigation Bond” shall mean any surety bond, supersedeas bond, judgment bond or other bond or insurance policy issued for bonding litigation judgments for appeal.

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          “Loan” shall mean any Term Loan, Revolving Loan or Swingline Loan.

          “Mandatory Borrowing” shall have the meaning provided in Section 1.01(c).

          “Margin Stock” shall have the meaning provided in Regulation U.

          “Marketable Investments” shall mean, as to any Person, (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof having maturities of not more than two years from the date of acquisition, (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within two years from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from S&P, Moody’s or Fitch, (iii) Dollar denominated domestic and Eurodollar time deposits, domestic and Yankee certificates of deposit and bank obligations and bankers acceptances of any Lender or any commercial bank having, or which is the principal banking subsidiary of a bank holding company having, a long-term unsecured debt rating of at least “A” or the equivalent thereof from S&P or Fitch or “A2” or the equivalent thereof from Moody’s with maturities of not more than two years from the date of acquisition by such Person, (iv) repurchase obligations with a term of not more than one year and collateralized with US Treasury, US Government Agency or other permitted investments consistent with the Borrower’s corporate guidelines and which have a collateral margin of at least 102%, marked to market daily, (v) commercial paper, extendable commercial notes and master notes issued by any Person incorporated in the United States and euro-commercial paper of domestic and foreign companies rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s or at least F-1 by Fitch and in each case maturing not more than 397 days after the date of acquisition by such Person, (vi) U.S. dollar denominated commercial paper or Canadian dollar commercial paper and government obligations of Canada, fully hedged, of Canadian companies whose commercial paper is rated R-1 by Dominion Bond Rating Service, (vii) investments in 2a-7 money market funds, (viii) corporate bonds and medium term notes rated at least “A” by S&P and/or Fitch and/or “A2” by Moody’s with maturities of not more than two years from the date of acquisition by such Person, (ix) asset-backed securities and mortgage-backed securities rated “A” or better by any of S&P, Moody’s or Fitch with maturities or rate reset dates of not more than two years from the date of acquisition by such Person, (x) taxable money market preferred (including but not limited to taxable auction debt) instruments rated at least “A” by S&P and/or Moody’s and/or Fitch and redeemable at par with a rollover period no longer than six months, (xi) tax exempt debt and par value preferred instruments rate at least “A” or the equivalent by S&P and/or Moody’s and/or Fitch and redeemable at par with a rollover period no longer than six months, (xii) domestic and international equity and bond funds (including indexed funds) with a “market capitalization” or “assets under management” of not less than $500,000,000, (xiii) separate account portfolios managed by registered investment advisors with guidelines adhering substantially to the securities above (it being understood, however, that, for purposes of clause (viii) above, a bond portfolio that holds corporate bonds and medium term notes rated at least “BBB” by S&P and/or Fitch and/or “Baa2” by Moody’s (and with maturities of not more than two years from the date of acquisition) shall be considered to adhere “substantially to the guidelines” in clause (viii) above, so long as such bond portfolio holds securities that (on a blended basis) satisfy the rating requirements for securities of the type described in clause (viii) above), and (xiv) separate account portfolios which (x) constitute “current assets” within the

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meaning of the definition of “Consolidated Current Assets”, (y) are managed by a registered investment advisor and (z) invest in securities of the type described in clauses (i) and (ii) above, except that the underlying securities may have maturities in excess of two years, so long as the underlying securities held in such account portfolio have an average duration of not more than five years; provided that the fair market value of all funds of the type described in this clause (xiv) owned or held by the Borrower and its Subsidiaries shall not exceed $500,000,000.

          “Material Adverse Effect” shall mean (A) as such term is used in any representation or warranty to be made, any covenant to be undertaken, any condition to be satisfied or any Default or Event of Default to be determined, in any such case on the Fourth Restatement Effective Date, a material adverse condition or material adverse change in or affecting the business, financial condition, results of operations, assets or liabilities of the Borrower and its Subsidiaries, taken as a whole, after giving effect to the Acquisition; provided, however, that any adverse event, development or circumstance attributable to the following shall, in each case, be excluded from such determination to the extent any such event, development or circumstance does not have a disproportionate adverse effect on the Borrower and its Subsidiaries, taken as a whole, after giving effect to the Acquisition, as compared to other entities engaged in the industry in which the Borrower and its Subsidiaries, taken as a whole, after giving effect to the Acquisition operates in general: (1) any adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any rule, regulation, ordinance, order, guidance, protocol or any other law of or by any governmental authority; and (2) any change or development in financial or securities markets or the economy in general or relating to the industry in which the Borrower and its Subsidiaries, taken as a whole, after giving effect to the Acquisition, operates in general (including any legal action against any entities (other than the Borrower and its Affiliates) engaged in the industry in which the Borrower and its Subsidiaries, taken as a whole, after giving effect to the Acquisition operates in general) and (B) as such term is used in any representation or warranty to be made, any covenant to be undertaken, any condition to be satisfied or any Default or Event of Default to be determined, in any such case at any time after the Fourth Restatement Effective Date, a material adverse effect on (i) the operations, business, property, assets or financial condition of the Borrower and its Subsidiaries taken as a whole, (ii) the rights or remedies of the Agents and the Lenders or the ability of any Credit Party to perform its obligations to the Agents or the Lenders hereunder or under any other Credit Document to which it is party, and/or (iii) in the case of Section 5.01G and Section 6.04, on the prospects of the Borrower and its Subsidiaries taken as a whole, provided that (x) the existence of, or the rendering of any verdict or entry of any order, injunction or judgment in, any action, suit, proceeding or inquiry listed on Annex IV will not have a “Material Adverse Effect” for purposes of Section 6.04 and (y) (I) the existence of, or the rendering of, any verdict or entry of any order, injunction or judgment that in each case can be stayed pending appeal (but only for so long as such stay can still be obtained) or that is stayed pending appeal and (II) the posting of a supersedeas or other appeal bond in respect of any verdict, order or judgment shall not, in each case, in and of itself have a “Material Adverse Effect” for purposes of Section 5.01G or Section 6.09(d), even if such verdict, order or judgment could be viewed as having a material adverse effect on future litigation prospects, unless such verdict, order or judgment results in an actual material adverse effect on the operations, business, property, assets or financial condition of the Borrower and its Subsidiaries taken as a whole. It is understood and agreed that for purposes of any condition to be satisfied, or representation or

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warranty to be made, on the Fourth Restatement Effective Date references in this definition to “Borrower and its Subsidiaries” shall include the Acquired Business.

          “Material Subsidiary” shall mean and include RJRTH, each of the Conwood Subsidiaries referred to in clauses (i), (ii) and (iii) of the definition of “Conwood Subsidiary”, Santa Fe, Lane, Reynolds Tobacco, Acquisition Corp., each of the Specified Subsidiaries and each other Subsidiary of the Borrower (including any Person first becoming a Subsidiary upon consummation of a Permitted Acquisition) to the extent that (x) the aggregate book value of the assets of such other Subsidiary, determined on a consolidating basis, is equal to or more than $100,000,000 or (y) the net sales of such other Subsidiary during its then most recently ended fiscal year, determined on a consolidating basis, were equal to or more than $100,000,000, provided that such net sales shall be determined on a pro forma basis for the 12 months last ended when determining whether any Person that is the survivor of any merger or consolidation or that is the transferee of any property or assets from other Subsidiaries of the Borrower is a Material Subsidiary.

          “Material Subsidiary Threshold Event” shall mean the occurrence of either of the following events: (i) the aggregate book value of the assets of all Subsidiaries of the Borrower which (x) do not constitute Material Subsidiaries in accordance with the definition thereof or (y) are not then party to the Subsidiary Guaranty (and, if a Trigger Event is then in existence, the relevant Security Documents), exceeds $250,000,000 or (ii) the net sales of all Subsidiaries of the Borrower which (x) do not constitute Material Subsidiaries in accordance with the definition thereof or (y) are not then party to the Subsidiary Guaranty (and, if a Trigger Event is then in existence, the relevant Security Documents), exceeds $200,000,000.

          “Maturity Date” shall mean, with respect to the relevant Tranche of Loans, the Term Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline Maturity Date, as the case may be.

          “Minimum Borrowing Amount” shall mean (i) with respect to a Borrowing of Term Loans, $10,000,000, (ii) with respect to a Borrowing of Revolving Loans, $10,000,000 and (iii) with respect to a Borrowing of Swingline Loans, $5,000,000.

          “Minimum Investment Grade Rating” shall mean the lowest rating level established as investment grade by each Rating Agency; it being understood that, as of the Fourth Restatement Effective Date, the “Minimum Investment Grade Rating” of S&P is BBB- and the “Minimum Investment Grade Rating” of Moody’s is Baa3.

          “Moody’s” shall mean Moody’s Investors Service, Inc., or any successor corporation thereto.

          “Mortgage” shall mean each mortgage, deed of trust or deed to secure debt required to be delivered with respect to any real property pursuant to the terms of this Agreement (including, after the execution and delivery thereof, each Mortgage required pursuant to Section 7.10), together with any assignment of leases and rents to be executed in connection therewith (as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof).

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          “Mortgage Amendment” shall have the meaning provided in Section 5.01N.

          “Mortgage Policy” shall mean each mortgage title insurance policy (and all endorsements thereto) for each Mortgaged Property required to be delivered pursuant to this Agreement.

          “Mortgaged Properties” shall mean the Existing Mortgaged Properties and the New Mortgaged Properties and shall include any real property mortgaged pursuant to Section 7.10.

          “NA Holdings” shall mean NA Holdings, Inc., a Delaware corporation formed to hold all of the Equity Interests of the Conwood Subsidiaries to be acquired in connection with the Acquisition.

          “Net Cash Proceeds” shall mean for any event requiring a repayment of Term Loans pursuant to Section 4.02, the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received from such event, net of reasonable transaction costs (including, as applicable, any underwriting, brokerage or other customary commissions and reasonable legal, advisory and other fees and expenses associated therewith) paid or incurred in connection with any such event.

          “Net Termination Value” shall mean at any time, with respect to all Hedging Agreements for which a Net Termination Value is being determined, the excess, if positive, of (i) the aggregate of the unrealized net loss position of the Borrower and/or its Subsidiaries under each of such Hedging Agreements on a marked-to-market basis determined no more than one month prior to such time less (ii) the aggregate of the unrealized net gain position of the Borrower and/or its Subsidiaries under each of such Hedging Agreements on a marked-to-market basis determined no more than one month prior to such time.

          “New Senior Notes” shall mean (i) the Initial New Senior Notes, (ii) the Exchange Senior Notes and (iii) the Additional Senior Notes, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “New Senior Notes Documents” shall mean (i) the New Senior Notes, (ii) the New Senior Notes Indenture and (iii) all other documents executed and delivered in connection with any issuance of the New Senior Notes, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “New Senior Notes Indenture” shall mean the Indenture, dated as of May 31, 2006, among the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “New Mortgaged Properties” shall mean each Mortgaged Property designated as such on Annex VIII hereto.

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          “Non-Declared Dividend” shall mean and include, as to any Person, (i) the redemption, retirement, purchase, or other acquisition, directly or indirectly, for a consideration, of any shares of any class of its capital stock or of any other Equity Interests of such Person outstanding on the Fourth Restatement Effective Date or thereafter (or any warrants for or options or stock or similar appreciation rights in respect of any such shares or Equity Interests but not including any convertible debt) or the setting aside of any funds for any of the foregoing purposes and (ii) the making or payment of any other Dividend on or after the Fourth Restatement Effective Date by such Person which does not require or involve a declaration or authorization by such Person.

          “Non-Defaulting Lender” shall mean and include each Lender other than a Defaulting Lender.

          “Non-Defaulting RL Lender” shall mean each RL Lender which is not a Defaulting Lender.

          “Non-Guarantor Subsidiary” shall mean (i) on the Fourth Restatement Effective Date, each Subsidiary of the Borrower listed on Part B of Annex V and (ii) after the Fourth Restatement Effective Date, any Subsidiary of the Borrower that is not at such time a Subsidiary Guarantor.

          “Non-Wholly Owned Subsidiary” shall mean, as to any Person, each Subsidiary of such Person which is not a Wholly-Owned Subsidiary of such Person.

          “Note” shall have the meaning provided in Section 1.05(a).

          “Notice of Borrowing” shall have the meaning provided in Section 1.03(a).

          “Notice of Conversion” shall have the meaning provided in Section 1.06.

          “Obligations” shall mean all amounts, direct or indirect, contingent or absolute, of every type or description, and at any time existing, owing to any Lead Agent, the Administrative Agent, the Collateral Agent, any Letter of Credit Issuer, the Swingline Lender or any Lender pursuant to the terms of this Agreement or any other Credit Document.

          “Original Credit Agreement” shall mean the Credit Agreement, dated as of May 7, 1999, among the Borrower and certain financial institutions, as in effect on the First Restatement Effective Date (immediately prior to giving effect thereto).

          “Original Effective Date” shall mean the “Closing Date” under, and as defined in, the Original Credit Agreement.

          “Original Execution Date” shall mean the “Execution Date” under, and as defined in, the Original Credit Agreement.

          “Participant” shall have the meaning provided in Section 2.03(a).

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          “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

          “Permanent Surplus Cash” shall mean cash on hand and Marketable Investments at the Borrower and its Domestic Subsidiaries that has not been designated to be used to pay income, excise or other taxes or to make settlement payments in respect of tobacco liability, provided that the lesser of (i) $100,000,000 and (ii) the total amount of cash on hand in the cash management systems of the Borrower and its Domestic Subsidiaries, shall be excluded from Permanent Surplus Cash.

          “Permitted Acquisition” shall mean the acquisition by the Borrower or a Wholly-Owned Domestic Subsidiary of the Borrower of an Acquired Entity or Business (including by way of merger of such Acquired Entity or Business with and into the Borrower (so long as the Borrower is the surviving corporation) or a Wholly-Owned Domestic Subsidiary of the Borrower (so long as if such Wholly-Owned Domestic Subsidiary is a Subsidiary Guarantor, such Subsidiary Guarantor is the surviving corporation)), provided that (in each case) (A) the consideration paid or to be paid by the Borrower or such Wholly-Owned Domestic Subsidiary consists solely of cash (including proceeds of Revolving Loans or Swingline Loans), Borrower Common Stock, contingent earn-outs to be paid in cash or Borrower Common Stock, the issuance or incurrence of Indebtedness (including earn-outs) otherwise permitted by Section 8.04 and the assumption/acquisition of any Indebtedness (calculated at face value) which is permitted to remain outstanding in accordance with the requirements of Section 8.04, (B) in the case of the acquisition of 100% of the Equity Interests of any Acquired Entity or Business (including by way of merger), such Acquired Entity or Business shall own no Equity Interests of any other Person unless either (x) such Acquired Entity or Business owns 100% of the Equity Interests of such other Person or (y) if such Acquired Entity or Business owns Equity Interests in any other Person which is a Non-Wholly Owned Subsidiary of such Acquired Entity or Business, (1) such Acquired Entity or Business shall not have been created or established in contemplation of, or for purposes of, the respective Permitted Acquisition, (2) any such Non-Wholly Owned Subsidiary of the Acquired Entity or Business shall have been a Non-Wholly Owned Subsidiary of such Acquired Entity or Business prior to the date of the respective Permitted Acquisition and shall not have been created or established in contemplation thereof and (3) such Acquired Entity or Business and/or its Wholly-Owned Subsidiaries own at least 90% of the total value of all the assets owned by such Acquired Entity or Business and its subsidiaries (for purposes of such determination, excluding the value of the Equity Interests of Non-Wholly Owned Subsidiaries held by such Acquired Entity or Business and its Wholly-Owned Subsidiaries), (C) all of the business, division or product line acquired pursuant to the respective Permitted Acquisition, or the business of the Person acquired pursuant to the respective Permitted Acquisition and its Subsidiaries taken as a whole, is in the United States, provided, however, the respective proposed Permitted Acquisition shall not be required to meet the requirements set forth above in this clause (C) if the Aggregate Consideration payable in connection with the portion of the Acquired Business or Entity acquired pursuant to such Permitted Acquisition that does not meet the requirements of clause (C) (as determined in good faith by the Borrower), when aggregated with the Aggregate Consideration payable in connection with the portions of all other Acquired Businesses or Entities acquired pursuant to Permitted Acquisitions consummated after the Fourth Restatement Effective Date that do not meet the foregoing requirements of this clause (C) (as determined in good faith by the Borrower), does not exceed $100,000,000, (D) after giving effect

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to the respective Permitted Acquisition, the Borrower and its Subsidiaries are in compliance with Section 8.01, (E) in the case of the acquisition of 100% of the Equity Interests of any Acquired Entity or Business, if the respective Acquired Entity or Business so acquired would be a Material Subsidiary after giving effect to such Permitted Acquisition, such Acquired Entity or Business shall become a Subsidiary Guarantor upon the consummation of such Permitted Acquisition and takes all of the actions specified in Section 8.02(h)(y)(II), (F) in the case of a Permitted Acquisition by a Wholly-Owned Domestic Subsidiary that is not a Material Subsidiary but that, after giving effect to such Permitted Acquisition, will become a Material Subsidiary, such Wholly-Owned Domestic Subsidiary shall become a Subsidiary Guarantor upon the consummation of such Permitted Acquisition and take all of the actions specified in Section 8.02(h)(y)(II), and (G) in the case of a Permitted Acquisition by any Credit Party while a Trigger Event is in effect, take all other actions specified in Section 7.10(b) as may be requested by the Administrative Agent. Notwithstanding anything to the contrary contained in the immediately preceding sentence, an acquisition which does not otherwise meet the requirements set forth above in the definition of “Permitted Acquisition” shall constitute a Permitted Acquisition if, and to the extent, the Required Lenders agree in writing, prior to the consummation thereof, that such acquisition shall constitute a Permitted Acquisition for purposes of this Agreement.

          “Permitted Currency Agreement” shall mean any Currency Agreement entered into in the ordinary course of business by the Borrower and/or any Subsidiary of the Borrower with any Lender or Lenders (and/or their affiliates) to the extent consistent with the practices of the Borrower and its Subsidiaries prior to the Fourth Restatement Effective Date or with then current practices in the industry and so long as the entering into of any such Currency Agreement is a bona fide hedging activity and not for speculative purposes.

          “Permitted Encumbrance” shall mean, with respect to any Mortgaged Property, such exceptions to title as are set forth in the Mortgage Policy delivered with respect thereto, all of which exceptions must be acceptable to the Administrative Agent in its reasonable discretion.

          “Permitted Interest Rate Agreements” shall mean, collectively, (i) Interest Rate Agreements entered into in the ordinary course of business by the Borrower and/or any Subsidiary Guarantor with any financial institution that is a Lender (and/or an affiliate of any Lender) at the time of the entering into of any such Interest Rate Agreement, so long as the entering into of any such Interest Rate Agreement is a bona fide hedging activity and not for speculative purposes and (ii) the Existing Interest Rate Swap Agreement.

          “Permitted Liens” shall have the meaning provided in Section 8.03.

          “Permitted Litigation Bonding” shall mean the making of deposits with the proceeds of Loans and/or the issuance of Letters of Credit, in each case for the purposes of bonding litigation judgments entered against any Credit Party after the Fourth Restatement Effective Date, provided that, at the time of the making of any such Loan or issuance of any such Letter of Credit, and after deducting any usage by the Credit Parties of Permanent Surplus Cash in accordance with Section 8.03(f) to effect such bonding of litigation judgments, the amount of Permanent Surplus Cash shall be zero, provided, further, however, that, in the event a bonding company requires its bond to be supported by a letter of credit instead of cash, Letters of Credit will be available for bonding litigation judgments before all such Permanent Surplus Cash has

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been utilized for such purpose, if and only if the Letters of Credit so issued are cash collateralized with the Permanent Surplus Cash otherwise required to be used for such purpose pursuant to cash collateral arrangements in form and substance satisfactory to the Lead Agents.

          “Permitted Obligations” shall mean and include obligations (i) to pay taxes, (ii) to pay import duties, to post customs bonds and otherwise in connection with customs and trade laws, (iii) to purchase equipment or fixtures and otherwise in connection with capital expenditures, (iv) in connection with the importation or purchase of tobacco or other products or goods for use in the day-to-day operations of the Borrower and any Subsidiary of the Borrower consistent with the practices of the Borrower and its Subsidiaries in effect prior to the Fourth Restatement Effective Date or with then current practices in the industry, (v) to make utility payments, (vi) in connection with worker’s compensation obligations or other employee disability obligations, (vii) to provide credit support for any of the foregoing, (viii) in respect of employee loans made in connection with transfers, (ix) to provide credit support for suppliers and distributors in the ordinary course of business, and (x) to support Indebtedness supported by Existing Letters of Credit on the Fourth Restatement Effective Date.

          “Person” shall mean any individual, partnership, limited liability company, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

          “Plan” shall mean any multiemployer or single-employer plan as defined in Section 4001 of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribution of), or at any time during the five calendar years preceding the date of this Agreement was maintained or contributed to by (or to which there is an obligation to contribution of), the Borrower, any Subsidiary of the Borrower or an ERISA Affiliate.

          “Pledge Agreement” shall have the meaning provided in Section 5.01L.

          “Post-Closing Integration Charges” shall mean integration charges actually accrued or recorded by the Borrower and its Subsidiaries during the period commencing on the Fourth Restatement Effective Date and ending on December 31, 2007 in connection with the severance of employees, the relocation of offices, equipment and employees, the payment of professional fees, other Acquisition related integration costs and the amortization of related intangibles following the consummation of the Acquisition; provided that the aggregate amount of such charges (to the extent provided for as an add-back pursuant to the definitions of “Consolidated EBITDA”) shall not exceed $45,000,000 in the aggregate (determined on a pre-tax basis).

          “Pounds Sterling” shall mean freely transferable lawful money of the United Kingdom (expressed in Pounds Sterling).

          “Preferred Equity Interests” as applied to the Equity Interests of any Person, means capital stock of such Person (other than common Equity Interests of such Person) of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of

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such Person, to Equity Interests of any other class of Equity Interests of such Person, and shall include any Qualified Preferred Stock and any Disqualified Preferred Stock.

          “Pricing End Date” shall mean, with respect to any Pricing Start Date for a given Quarterly Pricing Certificate, the earlier to occur of (x) the date on which the next Quarterly Pricing Certificate is delivered to the Administrative Agent or (y) the date which is 45 days following the last day of the Test Period in which such Pricing Start Date occurred.

          “Pricing Start Date” shall have the meaning provided in the definition of “Applicable Margin”.

          “Pro Forma Basis” shall mean, in connection with any calculation of compliance with any financial covenant or financial term, the calculation thereof after giving effect on a pro forma basis to (x) the incurrence of any Indebtedness (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) after the first day of the relevant Calculation Period or Test Period, as the case may be, as if such Indebtedness had been incurred (and the proceeds thereof applied) on the first day of such Test Period or Calculation Period, as the case may be, (y) the permanent repayment of any Indebtedness (other than revolving Indebtedness, except to the extent accompanied by a corresponding permanent commitment reduction) after the first day of the relevant Test Period or Calculation Period, as the case may be, as if such Indebtedness had been retired or repaid on the first day of such Test Period or Calculation Period, as the case may be, and (z) any Permitted Acquisition or any Significant Asset Sale then being consummated as well as any other Permitted Acquisition or any other Significant Asset Sale if consummated after the first day of the relevant Test Period or Calculation Period, as the case may be, and on or prior to the date of the respective Permitted Acquisition or Significant Asset Sale, as the case may be, then being effected, with the following rules to apply in connection therewith:

     (i) all Indebtedness (x) (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance Permitted Acquisitions) incurred or issued after the first day of the relevant Test Period or Calculation Period (whether incurred to finance a Permitted Acquisition, to refinance Indebtedness or otherwise) shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first day of such Test Period or Calculation Period, as the case may be, and remain outstanding through the date of determination and (y) (other than revolving Indebtedness, except to the extent accompanied by a corresponding permanent commitment reduction) permanently retired or redeemed after the first day of the relevant Test Period or Calculation Period, as the case may be, shall be deemed to have been retired or redeemed on the first day of such Test Period or Calculation Period, as the case may be, and remain retired through the date of determination;

     (ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (x) the rate applicable thereto, in the case of fixed rate indebtedness, or (y) the rates which would have been applicable thereto during the respective period when same was deemed outstanding, in the case of floating rate Indebtedness (although interest expense with respect to any Indebtedness for periods while same was actually outstanding during the respective period shall be calculated

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using the actual rates applicable thereto while same was actually outstanding); provided that all Indebtedness (whether actually outstanding or deemed outstanding) bearing interest at a floating rate of interest shall be tested on the basis of the rates applicable at the time the determination is made pursuant to said provisions; and

     (iii) in making any determination of Consolidated EBITDA on a Pro Forma Basis, pro forma effect shall be given to any Permitted Acquisition or any Significant Asset Sale if effected during the respective Calculation Period or Test Period (or thereafter, for purposes of determinations pursuant to Sections 8.09(l) and the definition of “Incremental Commitment Requirements” only) as if same had occurred on the first day of the respective Calculation Period or Test Period, as the case may be, taking into account, in the case of any Permitted Acquisition, factually supportable and identifiable cost savings and expenses which would otherwise be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act, as if such cost savings or expenses were realized on the first day of the respective period.

          “Pro Forma Financial Statements” shall have the meaning provided in Section 5.01I.

          “Qualified Preferred Stock” shall mean any Preferred Equity Interests of the Borrower, so long as the terms of any such Preferred Equity Interests (v) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision prior to the second anniversary of the Term Loan Maturity Date, (w) do not require the cash payment of dividends or distributions, (x) do not contain any covenants (other than periodic reporting requirements), (y) do not grant the holders thereof any voting rights except for (I) voting rights required to be granted to such holders under applicable law and (II) limited customary voting rights on fundamental matters such as mergers, consolidations, sales of all or substantially all of the assets of the Borrower, or liquidations involving the Borrower, and (z) are otherwise reasonably satisfactory to the Lead Agents.

          “Quarterly Payment Date” shall mean the third Business Day following the last day occurring in each of March, June, September and December.

          “Quarterly Pricing Certificate” shall mean a certificate of the Borrower given by an Authorized Officer of the Borrower to the Administrative Agent within 45 days of the last day of any fiscal quarter of the Borrower.

          “RAI Assumption Agreement” shall have the meaning provided in Section 5.01T.

          “RAI Existing Senior Notes Assumption and Indemnification Agreement” shall have the meaning provided in Section 5.01U.

          “Rating Agency” shall mean each of S&P and Moody’s.

          “Real Property” of any Person shall mean all the right, title and interest of such Person in and to land, improvements and fixtures, including leaseholds.

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          “Reference Rate” shall mean, at any time, the higher of (x) the rate which is 1/2 of 1% in excess of the Federal Funds Rate and (y) the Base Rate as in effect from time to time.

          “Reference Rate Loan” shall mean each Term Loan, Revolving Loan or Swingline Loan bearing interest at the rates provided in Section 1.08(a).

          “Refinance” shall mean, as used in relation to any refinancing of outstanding New Senior Notes, Existing Senior Notes or Refinancing Senior Notes, that (i) principal of New Senior Notes, Existing Senior Notes or Refinancing Senior Notes, as the case may be, shall have been refinanced, in whole or in part, with the proceeds of Refinancing Senior Notes or (ii) the Borrower has at all times cash and/or Marketable Investments on its balance sheet (representing cash proceeds from an issuance of Refinancing Senior Notes) (x) which are specifically set aside for purposes of repaying, and are sufficient in amount to repay, the principal of such outstanding New Senior Notes, Existing Senior Notes or Refinancing Senior Notes, as the case may be, deemed “refinanced” with the proceeds of such Refinancing Senior Notes (as indicated by way of a footnote in its financial statements included in the then most recent public filing with the SEC) and (y) if a Trigger Event is in effect, in which the Collateral Agent (on behalf of the Secured Creditors) has a first-priority perfected security interest, subject to Permitted Liens.

          “Refinancing Senior Notes” shall mean one or more issuances of senior notes issued by the Borrower to Refinance New Senior Notes, Existing Senior Notes or any other senior notes theretofore issued as “Refinancing Senior Notes” in reliance on this definition, all of the terms and conditions of which (and of the indenture governing the same) are substantially identical to (or, from the perspective of the Lenders, more favorable than) those applicable to the Initial New Senior Notes (and the New Senior Notes Indenture), without giving effect to any repayment of such Initial New Senior Notes; provided that (i) the final stated maturity of any such senior notes may differ from that of the Initial New Senior Notes, so long as the final stated maturity of any such senior notes shall be no shorter than the date occurring one year after the Term Loan Maturity Date, (ii) the interest rate and principal amount of any such senior notes may differ from that of the Initial New Senior Notes and (iii) the aggregate principal amount of any such senior notes issued at any time to refinance New Senior Notes, Existing Senior Notes or any other senior notes theretofore issued as “Refinancing Senior Notes” in reliance on this definition shall not exceed the aggregate principal amount of the Indebtedness so refinanced; provided, however, that in the case of any such senior notes issued to Refinance (within the meaning of clause (ii) of the definition of “Refinance”) New Senior Notes, Existing Senior Notes or any other senior notes theretofore issued as “Refinancing Senior Notes” in reliance on this definition, the aggregate principal amount of such senior notes may exceed the aggregate principal amount of the Indebtedness so Refinanced, so long as the aggregate principal amount of all senior notes issued in reliance on this proviso to Refinance (within the meaning of clause (ii) of the definition of “Refinance”) New Senior Notes or any other senior notes theretofore issued as “Refinancing Senior Notes” in reliance on this definition (but excluding Existing Senior Notes) does not exceed $500,000,000 at any time outstanding.

          “Register” shall have the meaning provided in Section 12.04(f).

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          “Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

          “Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

          “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

          “Replaced Lender” shall have the meaning provided in Section 1.14.

          “Replacement Lender” shall have the meaning provided in Section 1.14.

          “Reportable Event” shall mean an event described in Section 4043(c) of ERISA with respect to a Plan as to which the 30-day notice requirement has not been waived by the PBGC.

          “Required Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of whose outstanding Term Loans and Revolving Loan Commitments at such time (or, after the termination thereof, outstanding Revolving Loans and RL Percentages of (x) outstanding Swingline Loans at such time and (y) Letter of Credit Outstandings at such time) represents an amount greater than 50% of the sum of (i) all outstanding Term Loans of Non-Defaulting Lenders and (ii) the Total Revolving Loan Commitment in effect at such time less the Revolving Loan Commitments of all Defaulting Lenders at such time (or, after the termination thereof, the sum of then total outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL Percentages of all Non-Defaulting Lenders of the total outstanding Swingline Loans and Letter of Credit Outstandings at such time).

          “Returns” shall have the meaning provided in Section 6.10.

          “Revolving Loan” shall have the meaning provided in Section 1.01(a).

          “Revolving Loan Commitment” shall mean, with respect to each Lender, the amount set forth opposite such Lender’s name in Annex I hereto, as the same may be reduced and/or adjusted from time to time pursuant to Section 1.14, 3.02, 3.03, 9 and/or 12.04(b)(A).

          “Revolving Loan Maturity Date” shall mean May 31, 2011.

          “Revolving Note” shall have the meaning provided in Section 1.05(a).

          “Reynolds Tobacco” shall mean R.J. Reynolds Tobacco Company, a North Carolina corporation.

          “RJR Packaging” shall mean RJR Packaging, LLC.

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          “RJRTH” shall have the meaning provided in the recitals of this Agreement.

          “RJRTH Intercompany Note” shall have the meaning provided in Section 5.01F.

          “RL Lender” shall mean each Lender with a Revolving Loan Commitment or with outstanding Revolving Loans.

          “RL Percentage” shall mean, at any time, for each Lender, the percentage obtained by dividing such Lender’s Revolving Loan Commitment at such time by the Total Revolving Loan Commitment at such time, provided that at any time when the Total Revolving Loan Commitment shall have been terminated, each Lender’s RL Percentage shall be the percentage obtained by dividing such Lender’s outstanding Revolving Loans at such time by the aggregate outstanding Revolving Loans of all Lenders at such time.

          “S&P” shall mean Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc., or any successor thereto.

          “Santa Fe” shall mean Santa Fe Natural Tobacco Company, Inc., a New Mexico corporation.

          “Scheduled Repayment” shall have the meaning provided in Section 4.02(b).

          “Scheduled Repayment Date” shall have the meaning provided in Section 4.02(b).

          “SEC” shall have the meaning provided in Section 7.01(f).

          “SEC Regulation D” shall mean Regulation D as promulgated under the Securities Act of 1933, as amended, as the same may be in effect from time to time.

          “Secured Credit Card Agreement” shall have the meaning provided in the Security Agreement.

          “Secured Creditors” shall mean and include, with respect to any Collateral, (i) all Lenders (including in their capacity as Letter of Credit Issuers, the Swingline Lender, Credit Card Issuers or parties to Hedging Agreements) and their affiliates and other Hedging Agreement parties as provided in the Security Documents and (ii) all holders of New Senior Notes, Existing Senior Notes and Refinancing Senior Notes, in each case, to the extent the Lien sharing provisions of the indenture(s) governing the New Senior Notes, the Existing Senior Notes or the Refinancing Senior Notes, as the case may be, require them to be secured by such Collateral.

          “Security Agreement” shall have the meaning provided in Section 5.01M.

          “Security Document” shall mean and include (i) each of the Security Agreement and the Pledge Agreement entered into on the Fourth Restatement Effective Date (or, thereafter, pursuant to Section 12.19) until the same are terminated in accordance with their terms, (ii) each Mortgage, until the same is terminated in accordance with its terms, (iii) after the execution and delivery thereof, each Additional Security Document, until the same is terminated in accordance

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with its terms and (iii) upon the occurrence of a new Trigger Event after the Fourth Restatement Effective Date, the pledge agreements, security agreements and mortgages entered into (or required to be entered into) pursuant to Section 7.10(b).

          “Significant Asset Sale” shall mean each Asset Sale which generates Net Sale Proceeds of at least $50,000,000.

          “Significant Letter of Credit Issuer” shall mean JPMCB and any other Letter of Credit Issuer which has issued Letters of Credit in an aggregate Stated Amount for all such Letters of Credit equal to at least $5,000,000.

          “SPC” shall have the meaning provided in Section 12.04.

          “Specified Subsidiaries” shall mean GMB and FHS.

          “Specified Agents” shall mean the Administrative Agent and the Syndication Agents.

          “Stated Amount” of any Letter of Credit shall mean the maximum amount available to be drawn thereunder, determined without regard to whether any conditions to drawing could then be met. The Stated Amount of any Letter of Credit denominated in a currency other than U.S. Dollars shall be calculated in accordance with the requirements of Section 12.07(c).

          “Stub Notes” shall mean, collectively, (i) RJRTH’s 8.50% Notes due July 1, 2007 in an initial aggregate principal amount equal to $7,093,000, (ii) RJRTH’s 8.75% Notes due July 15, 2007 in an initial aggregate principal amount equal to $21,814,000 and (iii) RJRTH’s 9.25% Notes due August 15, 2013 in an initial aggregate principal amount equal to $60,077,000, in each case as the same may be amended, modified and/or supplemented from time to time.

          “Subsidiary” of any Person shall mean and include (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (ii) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than a 50% Equity Interest at the time. Unless otherwise expressly provided, all references herein to “Subsidiary” shall mean a Subsidiary of the Borrower.

          “Subsidiary Guarantor” shall mean (i) each Material Subsidiary of the Borrower as of the Fourth Restatement Effective Date (other than NA Holdings) and (ii) each other Subsidiary of the Borrower created, established or acquired after the Fourth Restatement Effective Date which executes and delivers the Subsidiary Guaranty, unless and until such time as the respective Subsidiary ceases to constitute a Subsidiary or is released from all of its obligations under the Subsidiary Guaranty in accordance with the terms and provisions thereof.

          “Subsidiary Guaranty” shall have the meaning provided in Section 5.01J.

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          “Swingline Commitment” shall mean the commitment of the Swingline Lender to make Swingline Loans in aggregate principal amount not to exceed $75,000,000 (as the same may be reduced as provided in Section 3.03(b)).

          “Swingline Lender” shall mean JPMCB, in its capacity as a swingline lender hereunder.

          “Swingline Loans” shall have the meaning provided in Section 1.01(b).

          “Swingline Maturity Date” shall mean the date which is five Business Days prior to the Revolving Loan Maturity Date.

          “Swingline Note” shall have the meaning provided in Section 1.05(a).

          “Syndication Agents” shall mean each of LCPI and Citicorp USA, Inc. acting in its capacity as syndication agent hereunder.

          “Tax Benefit” shall have the meaning provided in Section 4.04(c).

          “Tax Sharing Agreement” shall mean that certain Tax Sharing Agreement, dated as of July 30, 2004, among the Borrower and various of its Subsidiaries, as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

          “Taxes” shall have the meaning provided in Section 4.04(a).

          “Term Loan” shall have the meaning provided in Section 1.01(d).

          “Term Loan Commitment” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Annex I directly below the column entitled “Term Loan Commitment,” as the same may be terminated pursuant to Sections 3.03 and/or 9.

          “Term Loan Maturity Date” shall mean May 31, 2012.

          “Term Note” shall have the meaning provided in Section 1.05(a).

          “Test Period” shall mean each period of four consecutive fiscal quarters then last ended, in each case taken as one accounting period. Notwithstanding anything to the contrary contained above or in Section 13.07 or otherwise required by GAAP, in the case of any Test Period ending prior to the first anniversary of the Fourth Restatement Effective Date, such period shall be a one-year period ending on the last day of the fiscal quarter last ended, with any calculations of Consolidated Fixed Charges and Consolidated EBITDA required in determining compliance with Section 8.07 or 8.08 to be made on a pro forma basis in accordance with, and to the extent provided in, the immediately succeeding sentences. To the extent the respective Test Period (i) includes the fiscal quarter of the Borrower ended June 30, 2005, Consolidated EBITDA for such fiscal quarter shall be deemed to be $661,000,000, (ii) includes the fiscal quarter of the Borrower ended September 30, 2005, Consolidated EBITDA for such fiscal quarter shall be deemed to be $583,000,000, (iii) includes the fiscal quarter of the Borrower

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ended December 31, 2005, Consolidated Fixed Charges and Consolidated EBITDA for such fiscal quarter shall be deemed to be $446,000,000 and $670,000,000, respectively, (iv) includes the fiscal quarter of the Borrower ended March 31, 2006, Consolidated Fixed Charges and Consolidated EBITDA for such fiscal quarter shall be deemed to be $494,000,000 and $665,000,000, respectively and (v) includes the fiscal quarter ended June 30, 2006, Consolidated Fixed Charges and Consolidated EBITDA shall be determined by taking actual Consolidated Fixed Charges or Consolidated EBITDA, as the case may be, determined in accordance with the respective definition therefor for such fiscal quarter (determined on a pro forma basis (in a manner satisfactory to the Lead Agents), as if the Transaction had been consummated prior to the first day of such fiscal quarter); provided that any additional adjustments required by the definition of Pro Forma Basis for occurrences after the Fourth Restatement Effective Date shall also be made.

          “Third Amended and Restated Credit Agreement” shall have the meaning provided in the first recital of this Agreement.

          “Total Commitment” shall mean, at any time, the sum of the Commitments of each Lender at such time.

          “Total Revolving Loan Commitment” shall mean, at any time, the sum of the Revolving Loan Commitments of each of the Lenders at such time.

          “Total Term Loan Commitment” shall mean, at any time, the sum of the Term Loan Commitments of each of the Lenders at such time.

          “Total Unutilized Revolving Loan Commitment” shall mean, at any time, the portion of the Total Revolving Loan Commitment equal to the excess of (x) the Total Revolving Loan Commitment at such time over (y) the sum of (i) the aggregate outstanding principal amount of all Revolving Loans and Swingline Loans at such time and (ii) the Letter of Credit Outstandings at such time.

          “Tranche” shall mean the respective facility and commitments utilized in making Loans hereunder, with there being three separate Tranches, i.e., Term Loans, Revolving Loans and Swingline Loans; provided that for purposes of Sections 1.14, 12.04(b) and 12.12(a) and (b), Revolving Loans and Swingline Loans shall be deemed to constitute part of a single “Tranche.”

          “Transaction” shall mean, collectively, (i) the consummation of the Acquisition and the other transactions contemplated by the Acquisition Documents, (ii) the execution, delivery and performance by each Credit Party of the Initial New Senior Notes Documents to which it is a party, the issuance of the Initial New Senior Notes and the use of proceeds thereof, (iii) the execution, delivery and performance by each Credit Party of the Credit Documents to which it is a party, (iv) the occurrence of the Fourth Restatement Effective Date and the incurrence of Term Loans and other extensions of credit hereunder on such date, (v) the execution and delivery of the RAI Assumption Agreement and the RAI Existing Senior Notes Assumption and Indemnification Agreement, (vi) the issuance of, and the making of any intercompany loans evidenced by, the RJRTH Intercompany Note, and (vii) the payment of all fees and expenses in connection with the foregoing.

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          “Trigger Event” shall mean that the Applicable Corporate Credit Rating issued by each Rating Agency is at least one level below the Minimum Investment Grade Rating or that the Applicable Corporate Credit Rating issued by either Rating Agency is at least two levels below the Minimum Investment Grade Rating.

          “Type” shall mean any type of Loan determined with respect to the interest option applicable thereto, i.e., a Reference Rate Loan or Eurodollar Loan.

          “UCC” shall mean the Uniform Commercial Code.

          “Unfunded Current Liability” of any Plan shall mean the amount, if any, by which the present value of the accrued benefits under such Plan as of the close of its most recent plan year, determined in accordance with Statement of Financial Accounting Standards No. 35, based upon the actuarial assumptions used by such Plan’s actuary in the most recent annual valuation of such Plan, exceeds the fair market value of the assets allocable thereto, determined in accordance with Section 412 of the Code.

          “Unpaid Drawing” shall have the meaning provided in Section 2.04(a).

          “Unutilized Revolving Loan Commitment” shall mean, with respect to any Lender at any time, such Lender’s Revolving Loan Commitment at such time less the sum of (i) the aggregate outstanding principal amount of all Revolving Loans made by such Lender at such time and (ii) such Lender’s RL Percentage of the Letter of Credit Outstandings at such time.

          “U.S. Dollars” shall mean freely transferable lawful money of the United States of America.

          “Wholly-Owned Domestic Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person that is a Domestic Subsidiary of such Person.

          “Wholly-Owned Subsidiary” of any Person shall mean any Subsidiary of such Person to the extent all of the capital stock or other ownership interests in such Subsidiary, other than directors’ or nominees’ qualifying shares, is owned directly or indirectly by such Person.

          “Written” or “in writing” shall mean any form of written communication or a communication by means of telex, telecopier device, telegraph or cable.

          SECTION 11. The Lead Agents.

          11.01 Appointment. Each Lender hereby irrevocably designates and appoints JPMCB and LCPI, as Lead Agents (such term as used in this Section 11 to include each Lead Agent acting as Administrative Agent or Syndication Agent, as applicable, and the Administrative Agent acting as Collateral Agent) for such Lender to act as specified herein and in the other Credit Documents, and each such Lender hereby irrevocably authorizes JPMCB and LCPI, as the Lead Agents for such Lender, to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to the respective Lead Agents by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental

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thereto. Each Lead Agent agrees to act as such upon the express conditions contained in this Section 11. Notwithstanding any provision to the contrary elsewhere in this Agreement, no Lead Agent shall have any duties or responsibilities, except those expressly set forth herein or in the other Credit Documents, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Credit Document or otherwise exist against any Lead Agent. The provisions of this Section 11 are solely for the benefit of the Lead Agents and the Lenders, and no Credit Party shall have any rights as a third party beneficiary of any of the provisions hereof, provided that the Borrower shall have the rights granted to it pursuant to Section 11.09. In performing its functions and duties under this Agreement and each other Credit Document, each Lead Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for either Credit Party. No Lender which is a Syndication Agent (other than LCPI), Documentation Agent, Managing Agent, Co-Agent, Participant, Joint Lead Arranger or Joint Bookrunner (as such Lender may be designated in such capacity pursuant to the signature pages hereto or otherwise) shall have any duties or obligations in its capacity as such under this Agreement.

          11.02 Delegation of Duties. Each Lead Agent may execute any of its duties under this Agreement or any other Credit Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Lead Agent shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care except to the extent otherwise required by Section 11.03.

          11.03 Exculpatory Provisions. No Lead Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Credit Document (except for its or such Person’s own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable decision) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Borrower, any Subsidiary or any of their respective officers contained in this Agreement, any other Credit Document or in any certificate, report, statement or other document referred to or provided for in, or received by any Lead Agent under or in connection with, this Agreement or any other Credit Document or for any failure of the Borrower or any Subsidiary or any of their respective officers to perform its obligations hereunder or thereunder. No Lead Agent shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Borrower or any Subsidiary. No Lead Agent shall be responsible to any Lender for the effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any Credit Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by any Lead Agent to the Lenders or by or on behalf of the Borrower or any Subsidiary to any Lead Agent or any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or Letters of Credit or of the existence or possible existence of any Default or Event of Default.

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          11.04 Reliance by Lead Agents. Each Lead Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile transmission, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Credit Parties), independent accountants and other experts selected by such Lead Agent. Each Lead Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Lead Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Lenders (or to the extent specifically provided in Section 12.12(a), all the Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

          11.05 Notice of Default. No Lead Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Lead Agent has received notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that any Lead Agent receives such a notice, such Lead Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

          11.06 Non-Reliance on Lead Agents and Other Lenders. Each Lender expressly acknowledges that no Lead Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by any Lead Agent hereafter taken, including any review of the affairs of the Borrower or any Subsidiary, shall be deemed to constitute any representation or warranty by any Lead Agent to any Lender. Each Lender represents to each Lead Agent that it has, independently and without reliance upon any Lead Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Borrower and its Subsidiaries and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Lead Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other condition, prospects and creditworthiness of the Borrower and its Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, no Lead Agent shall have any duty or responsibility to provide

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any Lender with any credit or other information concerning the business, operations, assets, property, financial and other conditions, prospects or creditworthiness of the Borrower or any of its Subsidiaries which may come into the possession of such Lead Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

          11.07 Indemnification. The Lenders agree to indemnify each Lead Agent in its capacity as such ratably according to the sum of their outstanding Term Loans and their aggregate Revolving Loan Commitments (or, if the Total Revolving Loan Commitment has been terminated, their aggregate Revolving Loan Commitments as in effect immediately prior to such termination), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, reasonable expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Obligations) be imposed on, incurred by or asserted against such Lead Agent in its capacity as such in any way relating to or arising out of this Agreement or any other Credit Document, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted to be taken by any Lead Agent under or in connection with any of the foregoing, but only to the extent that any of the foregoing is not paid by the Borrower or any of its Subsidiaries; provided that no Lender shall be liable to any Lead Agent for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from such Lead Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). If any indemnity furnished to any Lead Agent for any purpose shall, in the opinion of such Lead Agent, be insufficient or become impaired, such Lead Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section 11.07 shall survive the payment of all Obligations.

          11.08 Lead Agents in Their Individual Capacities. Each Lead Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower and/or any of its Subsidiaries as though such Lead Agent were not a Lead Agent hereunder. With respect to the Loans made by it, Letters of Credit issued by it and all Obligations owing to it, each Lead Agent shall have the same rights and powers under this Agreement and each other Credit Document as any Lender and may exercise the same as though it were not a Lead Agent, and the terms “Lender” and “Lenders” shall include each Lead Agent in its individual capacity.

          11.09 Successor Lead Agents, etc. (a) Each Lead Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents (including, without limitation, its functions and duties as Collateral Agent) at any time by giving 30 Business Days’ prior written notice to the Lenders and, unless a Default or an Event of Default under Section 9.05 then exists, the Borrower. Any such resignation by a Lead Agent hereunder shall also constitute its resignation (if applicable) as a Letter of Credit Issuer and the Swingline Lender, in which case the resigning Lead Agent (x) shall not be required to issue any further Letters of Credit or make any additional Swingline Loans hereunder and (y) shall maintain all of its rights as Letter of Credit Issuer or Swingline Lender, as the case may be, with respect to any Letter of Credit issued by it, or Swingline Loans made by it, prior to the date of such resignation. Such resignation shall take effect upon (i) in the case of the Lead Agent serving

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as Administrative Agent and/or Collateral Agent, the appointment of a successor Administrative Agent and/or Collateral Agent pursuant to clauses (b) and (c) below or as otherwise provided below and (ii) in the case of any other Lead Agent, on such 30^th Business Day following delivery of the notice described above.

          (b) Upon any such notice of resignation by a Lead Agent then serving as Administrative Agent and Collateral Agent, the Required Lenders shall appoint a successor Lead Agent hereunder and/or under the other Credit Documents to act in such capacities which shall be a commercial bank or trust company acceptable to the Borrower, which acceptance shall not be unreasonably withheld or delayed (provided that the Borrower’s approval shall not be required if an Event of Default then exists).

          (c) If a successor Lead Agent shall not have been so appointed within such 30 Business Day period as contemplated by preceding clause (b), the Administrative Agent, with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed, provided that the Borrower’s consent shall not be required if an Event of Default then exists), shall then appoint a successor Lead Agent who shall serve as Administrative Agent and Collateral Agent hereunder and/or under the other Credit Documents until such time, if any, as the Required Lenders appoint a successor Lead Agent to act in such capacities as provided above.

          (d) If no successor Lead Agent has been appointed pursuant to clause (b) or (c) above by the 30th Business Day after the date such notice of resignation was given by such Lead Agent, such Lead Agent’s resignation shall become effective and the Required Lenders shall thereafter perform all the duties of such Lead Agent hereunder and/or under any other Credit Document until such time, if any, as the Lenders appoint a successor Lead Agent as provided above.

          (e) Upon a resignation of any Lead Agent pursuant to this Section 11.09, such Lead Agent shall remain indemnified to the extent provided in this Agreement and the other Credit Documents and the provisions of this Section 11 shall continue in effect for the benefit of such Lead Agent for all of its actions and inactions while serving as such Lead Agent.

          SECTION 12. Miscellaneous.

          12.01 Payment of Expenses, etc. (a) The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and expenses of (x) the Agents, whether or not the transactions herein contemplated are consummated, in connection with the negotiation, preparation, execution and delivery of the Credit Documents and the documents and instruments referred to therein and any amendment, waiver or consent relating thereto (including, without limitation, the reasonable fees and disbursements of White & Case LLP), (y) each Letter of Credit Issuer incurred in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (z) each Lead Agent, each Letter of Credit Issuer, the Swingline Lender and each of the Lenders in connection with the enforcement of or protection of its rights under the Credit Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees and disbursements of counsel for each Lead Agent and for each of the Lenders incurred during any workout, restructuring or

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negotiations in respect of any Credit Event); (ii) pay and hold each of the Lenders harmless from and against any and all present and future stamp and other similar taxes with respect to the foregoing matters and save each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes; and (iii) indemnify each Agent, the Collateral Agent, each Letter of Credit Issuer, the Swingline Lender and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Credit Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the Transaction or any other transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Letter of Credit Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned, leased or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claims, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. To the extent that the undertaking to indemnify, pay or hold harmless any Agent, the Collateral Agent, any Letter of Credit Issuer, the Swingline Lender or any Lender set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrower shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law.

          (b) To the extent that the Borrower fails to pay any amount required to be paid by it to any Agent, the Collateral Agent, any Letter of Credit Issuer or the Swingline Lender under paragraph (a) of this Section, each Lender severally agrees to pay to such Agent, the Collateral Agent, such Letter of Credit Issuer or the Swingline Lender, as the case may be, such Lender’s proportional share (determined (x) using such Lender’s respective “percentage” as used in determining the Required Lenders as if there were no Defaulting Lenders and (y) as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claims, damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent, the Collateral Agent, such Letter of Credit Issuer or the Swingline Lender in its capacity as such.

          (c) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Credit Document or any agreement or instrument

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contemplated thereby, the Transaction, any Loan or Letter of Credit or the use of the proceeds thereof.

          (d) All amounts due under this Section shall be payable promptly after written demand therefor.

          12.02 Right of Setoff. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Lender and each of its Affiliates is hereby authorized at any time or from time to time, to the fullest extent permitted by law, without presentment, demand, protest or other notice of any kind to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special, time or demand, provisional or final) and any other obligations at any time held or owing by such Lender of Affiliate (including, without limitation, by branches and agencies of such Lender wherever located) to or for the credit or the account of any Credit Party against and on account of the Obligations and liabilities of such Credit Party to such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations of such Credit Party purchased by such Lender pursuant to Section 12.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Lender shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

          12.03 Notices. (a) Except as otherwise expressly provided herein (including Section 12.03(b) below), all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile transmission or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered, if to a Credit Party, at the address specified opposite its signature below or in the other relevant Credit Documents, as the case may be; if to any Lender, at its address specified for such Lender on Annex II hereto or its Administrative Questionnaire; or, at such other address as shall be designated by any party in a written notice to the other parties hereto. All such notices and communications shall be telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and shall be effective when received.

          (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Sections 1, 2, 3 or 4 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

          12.04 Benefit of Agreement. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, provided that (i) the Borrower may not assign or transfer any of its interests hereunder,

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except to the extent any such assignment results from the consummation of a transaction permitted under Section 8.02, without the prior written consent of each of the Lenders (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) the rights of each Lender to transfer, assign or grant participations in its rights and/or obligations hereunder shall be limited as set forth below in this Section 12.04. Notwithstanding the foregoing or anything else in this Section 12.04, any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and including further, in the case of any Lender that is a fund, all or any portion of its Notes of Loans to its trustee or to a collateral agent or to another creditor providing credit or credit support to such Lender in support of its obligations to such trustee, such collateral agent or a holder of, or any other representative of a holder of, such obligations, or such other creditor, as the case may be, and this Section shall not apply to any such pledge or assignment of a security interest; provided however that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

          (b) Each Lender shall have the right to transfer, assign or grant participations in all or any part of its remaining rights and obligations hereunder on the basis set forth below in this clause (b).

          (A) Assignments. At any time, each Lender may assign pursuant to an Assignment Agreement substantially in the form of Exhibit E hereto (each, an “Assignment Agreement”) all or a portion of its rights and obligations hereunder (including all or a portion of any of its Commitments and the Loans at the time owing to it) pursuant to this clause (b)(A) to one or more Lenders and/or their affiliates and/or one or more Eligible Transferees, in any such case with the prior written consent (such consent not to be unreasonably withheld or delayed) of the Borrower, the Administrative Agent and each Significant Letter of Credit Issuer, provided that (x) the consent of the Borrower shall not be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee and (y) no consent of the Administrative Agent, any Significant Letter of Credit Issuer or the Borrower shall be required for any assignment of Term Loans. Each assignment shall be subject to the following additional conditions:

     (I) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund of a Lender, or an assignment of the entire remaining amount of the assigning Lender’s Revolving Loan Commitment or Loans of any Tranche, the amount of the Revolving Loan Commitment or Loans of each Tranche of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than (x) $1,000,000 in the case of Term Loans and (y) $5,000,000 in the case of Revolving Loan Commitments (and related Obligations), unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

     (II) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided

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that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Tranche of Commitments or Loans; and

     (III) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

          Any assignment to another Lender pursuant to this clause (b)(A) will become effective upon the payment to the Administrative Agent by (I) either the assigning or the assignee Lender or (II) in the case of an assignment pursuant to Section 1.14, the Replacement Lender, of a nonrefundable assignment fee of $3,500, the satisfaction of clause (III) of the preceding sentence (if applicable), the receipt of any written consents to such assignment required above and the recording by the Administrative Agent of such assignment, and the resultant effects thereof on the Commitments and outstanding Loans of the assigning Lender and the assignee Lender, in the Register, the Administrative Agent hereby agreeing to effect such recordation no later than five Business Days after its receipt of a written notification by the assigning Lender and the assignee Lender of the proposed assignment, provided that the Administrative Agent shall not be required to (but may if it so elects) so record any assignment in the Register on or after the date on which any proposed amendment, modification or supplement in respect of this Agreement has been circulated to the Lenders for approval until the earlier of (x) the effectiveness of such amendment, modification or supplement in accordance with Section 12.12(a) or (y) 30 days following the date on which such proposed amendment, modification or supplement was circulated to the Lenders. Upon the effectiveness of any assignment pursuant to this clause (b)(A), (x) the assignee will become a “Lender” for all purposes of this Agreement and the other Credit Documents with a Commitment and/or outstanding Loans as so recorded by the Administrative Agent in the Register, and to the extent of such assignment, the assigning Lender shall be relieved of its obligations hereunder with respect to the portion of its Commitment and/or Loans being assigned, (y) Annex I shall be deemed to be amended to reflect the Commitment and outstanding Loans of the respective assignee and of the other Lenders and (z) the Borrower shall issue new Notes (in exchange for the Note of the assigning Lender) to the assigning Lender (to the extent such Lender’s Commitment or outstanding Loans, as the case may be, are not reduced to zero as a result of such assignment) and to the assignee Lender, in each case to the extent requested by the assigning Lender or assignee Lender, as the case may be, in conformity with the requirements of Section 1.05 to the extent needed to reflect the revised Commitments and/or outstanding Loans of such Lenders. The Administrative Agent will (x) notify each Letter of Credit Issuer within 5 Business Days of the effectiveness of any assignment hereunder and (y) prepare on the last Business Day of each calendar quarter during which an assignment has become effective pursuant to this clause (b)(A) a new Annex I giving effect to all such assignments effected during such quarter and will promptly provide same to the Borrower and each of the Lenders. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

          (B) Participations. Each Lender may transfer, grant or assign participations in all or any part of such Lender’s interests and obligations hereunder pursuant to this clause (b)(B) to any Eligible Transferee, provided that (i) such Lender shall remain a “Lender” for all purposes of this Agreement and the transferee of such participation shall not constitute a Lender hereunder

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and (ii) no participant under any such participation shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (u) extend the scheduled final maturity of any Loan, Commitment or Note, or any portion thereof, in which such participant is participating, (v) reduce the interest rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) or Fees applicable to any of the Loans, Commitments or Letters of Credit or reduce the principal amount thereof, (w) release Reynolds Tobacco from its Guaranty, (x) at any time Collateral is pledged pursuant to the Security Documents release (other than pursuant to the automatic release provided for in Section 7.10 or as otherwise expressly permitted by the Security Documents) all or substantially all of the Collateral, (y) amend, modify or waive any provision of this clause (B) (other than technical amendments which do not adversely affect the rights of any Lender) or (z) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement. In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against the granting Lender in respect of such participation to be those set forth in the agreement with such Lender creating such participation) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation, provided that such participant shall be entitled to receive additional amounts under Sections 1.10, 1.11, 2.05 and 4.04 on the same basis as if it were a Lender. In addition, each agreement creating any participation must include an agreement by the participant to be bound by the provisions of Section 12.15.

          (c) Notwithstanding any other provisions of this Section 12.04, no transfer or assignment of the interests or obligations of any Lender hereunder or any grant of participations therein shall be permitted if such transfer, assignment or grant would require the Borrower or any Guarantor to file a registration statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any State.

          (b) Each Lender initially party to this Agreement hereby represents, and each Person that becomes a Lender pursuant to an assignment permitted by the preceding clause (b)(A) will upon its becoming party to this Agreement represent, that it is an Eligible Transferee which makes loans in the ordinary course of its business and that it will make or acquire Loans for its own account in the ordinary course of such business, provided that, subject to the preceding clauses (a) through (c), the disposition of any promissory notes or other evidences of or interests in Indebtedness held by such Lender shall at all times be within its exclusive control.

          (e) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (each, an “SPC”) of such Granting Lender, identified as such in writing from time to time by the respective Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Revolving Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to Section 1.01(a), provided that (i) nothing herein shall constitute a commitment to make any Revolving Loan by any SPC and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the respective Granting Lender shall be obligated to make such Revolving Loan pursuant to the terms hereof. The making of a Revolving Loan by an SPC hereunder shall utilize the Revolving Loan Commitment of the respective Granting Lender to the same extent, and as if, such Revolving

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Loan were made by such Granting Lender. Each party hereto hereby agrees that (x) no SPC shall be liable for any payment under this Agreement for which a Lender would otherwise be liable and (y) the Granting Lender for any SPC shall be (and hereby agrees that it is) liable for any payment under this Agreement for which the SPC would be liable in the absence of preceding clause (x). In furtherance of the foregoing, each party hereto hereby agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 12.04, any SPC may (i) with notice to, but without the prior written consent of, the Borrower or the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to its Granting Lender or to any financial institutions (if consented to by the Borrower and the Administrative Agent) providing liquidity and/or credit facilities to or for the account of such SPC to fund the Revolving Loans made by such SPC or to support the securities (if any) issued by such SPC to fund such Revolving Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of a surety, guarantee or credit or liquidity enhancement to such SPC.

          (f) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one its offices a copy of each Assignment Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and Unpaid Drawings owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, each Letter of Credit Issuer and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, any Letter of Credit Issuer and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

          12.05 No Waiver; Remedies Cumulative. No failure or delay on the part of any Lead Agent, the Administrative Agent, any Letter of Credit Issuer or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between any Credit Party and any Lead Agent, the Collateral Agent, the Swingline Lender, any Letter of Credit Issuer or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which any Lead Agent, the Collateral Agent, the Swingline Lender, any Letter of Credit Issuer or any Lender would otherwise have. No notice to or demand on any Credit Party in any case shall entitle such Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Lead Agents, the Collateral Agent, the Swingline Lender, the Letter of Credit Issuers or the Lenders to any other or further action in any circumstances without notice or demand. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by Section

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12.12(a), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality for the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent, any Lender or any Letter of Credit Issuer may have had notice or knowledge of such Default or Event of Default at the time.

          12.06 Payments Pro Rata. (a) The Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of any Credit Party in respect of any Obligations of such Credit Party, it shall, except as otherwise provided in this Agreement or any other Credit Document, distribute such payment to the Lenders pro rata based upon their respective shares, if any, of the Obligations with respect to which such payment was received.

          (b) Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or Lender’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise) which is applicable to the payment of the principal of, or interest on, the Loans or Fees, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligations then owed and due to such Lender bears to the total of such Obligations then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash (without recourse or warranty) from the other Lenders an interest in the Obligations of the respective Credit Party to such Lenders in such amount as shall result in a proportional participation by all of the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

          12.07 Calculations; Computations. (a) The financial statements to be furnished to the Administrative Agent (for the benefit of the Lenders) pursuant hereto shall be made and prepared in accordance with GAAP consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Borrower to the Administrative Agent); provided that, except as otherwise specifically provided herein, all computations determining compliance with Section 8, including definitions used therein, shall utilize accounting principles and policies in effect at the time of the preparation of, and in conformity with those used to prepare, the financial statements for the fiscal year of the Borrower ended December 31, 2005 delivered to the Administrative Agent pursuant to Section 7.01(b), provided that in the event GAAP shall be modified from that in effect at the time of the preparation of such financial statements, the Borrower shall be entitled to utilize GAAP, as so modified, for purposes of such computations to the extent that (x) the Borrower gives the Administrative Agent 30 days’ prior written notice of such proposed modification and (y) prior thereto the Borrower and the Lead Agents shall have agreed upon adjustments, if any, to Sections 8.05, 8.07, 8.08 and 8.13 (and the definitions used therein), the sole purpose of which shall be to give effect to such proposed change (it being understood and agreed that to the extent that the Borrower and the Lead Agents cannot agree on appropriate adjustments to such Sections (or that no adjustments are necessary), the proposed change may not be effected); and provided, further, that if at any time the computations determining compliance with Section 8 (and the definitions used therein) utilize accounting principles different from those utilized in the financial statements furnished to the Administrative Agent pursuant to this Agreement, such

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financial statements shall be accompanied by reconciliation work-sheets. Notwithstanding the foregoing, for purposes of the computations determining compliance with Section 8, all expenses and other charges arising from any settlement of tobacco liability which are required by GAAP to be retroactively applied to a previous fiscal quarter of the Borrower shall instead be accrued in the fiscal quarter in which such expenses and charges occur.

          (b) All computations of interest and Fees hereunder shall be made on the actual number of days elapsed over a year of 360 days (or in the case of Reference Rate Loans determined by reference to the Base Rate, 365/366 days).

          (c) All determinations of the Stated Amount of Letters of Credit and of the principal amount of Unpaid Drawings, in each case to the extent denominated in a currency other than U.S. Dollars, shall be made by converting same into U.S. Dollars at (x) if a Currency Agreement has been entered into by the Borrower and/or any of its Subsidiaries in connection with such Indebtedness, and is in effect at the time of such determination, the rate provided in such Currency Agreement, provided that this clause (x) shall not be applicable (I) unless the Administrative Agent has received sufficient information from the Borrower to determine the exchange rate established by such Currency Agreement and the duration thereof, or (II) to any determination of the Borrower’s obligation to reimburse in U.S. Dollars a Drawing under a Letter of Credit denominated in a currency other than U.S. Dollars, (y) in the case of a determination of the Borrower’s obligation to reimburse in U.S. Dollars a Drawing under a Letter of Credit denominated in a currency other than U.S. Dollars, the spot exchange rate for the currency in question of the Letter of Credit Issuer on the date of such Drawing or (z) if the provisions of the foregoing clauses (x) and (y) are not applicable, the “official” exchange rate, if applicable, or the spot exchange rate for the currency in question calculated by the Administrative Agent on the last Business Day of the month then last ended preceding the date on which any such determination is being made and at such other times as the Administrative Agent elects to make such determination, it being understood that the Administrative Agent shall have no obligation to make any such other determinations. The Administrative Agent will promptly notify the Borrower and each Letter of Credit Issuer of its determinations hereunder.

          12.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (OTHER THAN CERTAIN SECURITY DOCUMENTS EXPRESSLY PROVIDING OTHERWISE) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Credit Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any Lead Agent, the Collateral Agent, any

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Letter of Credit Issuer, the Swingline Lender or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower or its properties in the courts of any jurisdiction.

          (b) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

          (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 12.03. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

          12.09 Counterparts; Severability. (a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent.

          (b) Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any jurisdiction.

          12.10 Execution. The Fourth Amended and Restated Credit Agreement shall be fully executed on the date (the “Fourth Restatement Execution Date”) on which the Borrower, each Lender (as defined in the Third Amended and Restated Credit Agreement) and each Lender shall have signed a copy thereof (whether the same or different copies) and shall have delivered the same to the Administrative Agent at the Administrative Agent’s Office or, in the case of the Lenders, shall have given to the Administrative Agent telephonic (confirmed in writing), written, telex or facsimile notice (actually received) at such office that the same has been signed and mailed to it. The Administrative Agent will give the Borrower and each Lender prompt written notice of the occurrence of the Fourth Restatement Execution Date.

          12.11 Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

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          12.12 Amendment or Waiver. (a) Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the Required Lenders; provided that (x) no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) with Obligations being directly affected thereby, (i) extend any Scheduled Repayment or the scheduled final maturity of any Loan or Note, or any portion thereof, or reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) thereon or Fees (it being understood that any amendment or modification to the financial definitions in this Agreement or to Section 12.07(a) shall not constitute a reduction in the rate of interest or Fees for the purposes of this clause (i)) or reduce the principal amount thereof, or increase the Commitment of any Lender over the amount thereof then in effect (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default, mandatory repayments or a mandatory reduction in the Total Commitment shall not constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase of the Commitment of such Lender), (ii) release any Subsidiary from the Subsidiary Guaranty, except in connection with a sale or other disposition of such Subsidiary permitted by this Agreement, (iii) at any time Collateral is pledged pursuant to the Security Documents release (other than pursuant to the automatic release provided for in Section 7.10 or as otherwise expressly permitted by the Security Documents) all or substantially all of the Collateral, (iv) amend, modify or waive any provision of this Section (other than technical amendments which do not adversely affect the rights of any Lender), or Section 12.06 in a manner that would alter the pro rata sharing of payments required thereby, (v) reduce the percentage specified in the definition of Required Lenders or (vi) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement; and (y) the financial covenants set forth in Sections 8.05, 8.07, 8.08 and 8.13 (and the defined terms used therein) may be adjusted with the consent of the Borrower and the Lead Agents to the extent provided in Sections 7.09 and 12.07(a). No provision of Section 11 may be amended or modified without the consent of any Lead Agent adversely affected thereby. The obligations of the Swingline Lender to make Swingline Loans, the terms of any such Swingline Loans and the obligations of the other Lenders to fund Mandatory Borrowings shall not be amended or modified without the consent of the Swingline Lender. The terms of Section 2 shall not be amended or modified without the consent of any Letter of Credit Issuer adversely affected thereby.

          (b) If, in connection with any proposed change, waiver, discharge or termination of or to any of the provisions of this Agreement as contemplated by clause (x) of the proviso appearing in the first sentence of Section 12.12(a), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained, then the Borrower shall have the right to replace each such non-consenting Lender or Lenders with one or more Replacement Lenders pursuant to Section 1.14, so long as (i) at the time of such replacement, each such Replacement Lender consents to the proposed change, waiver, discharge or termination, and (ii) all non-consenting Lenders whose individual consent is required are treated the same.

          12.13 Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with

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or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation by any such other party or in its behalf and notwithstanding that any Lead Agent, the Administrative Agent, the Collateral Agent, any Letter of Credit Issuer, the Swingline Lender or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Revolving Loan Commitments have not expired or terminated. All indemnities set forth herein including, without limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01 shall survive the execution and delivery of this Agreement and the making of the Loans, the issuances of Letters of Credit, the repayment of the Obligations and the termination of the Total Commitment.

          12.14 Domicile of Loans. Subject to Section 12.04, each Lender may transfer and carry its Loans at, to or for the account of any branch office, subsidiary or affiliate of such Lender; provided that the Borrower shall not be responsible for costs arising under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such transfer (other than a transfer pursuant to Section 1.12) to the extent not otherwise applicable to such Lender prior to such transfer.

          12.15 Confidentiality. (a) Each of the Administrative Agent, the Letter of Credit Issuer and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or participant in, or any prospective assignee of or participant in (which shall be an Eligible Transferee), any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 12.15 or (ii) becomes available to the Administrative Agent, the Letter of Credit Issuer or any Lender on a non-confidential basis from a source other than the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower or any of its Subsidiaries relating to the Borrower, its Subsidiaries or their businesses, other than any such information that is available to the Administrative Agent, the Letter of Credit Issuer or any Lender on a non-confidential basis prior to disclosure by the Borrower or any of its Subsidiaries; provided that, in the case of information received from the Borrower or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the

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same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

          (b) EACH LENDER ACKNOWLEDGES THAT THE INFORMATION AS DEFINED IN SECTION 12.15(a) FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

          (c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS AFFILIATES, THE OTHER CREDIT PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES) AND ITS SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

          12.16 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          12.17 USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Act.

          12.18 Interest Rate Limitation. Notwithstanding anything herein to the contrary, if any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively, the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in

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accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Lender.

          12.19 Post-Closing Actions. Notwithstanding anything to the contrary contained in this Agreement or the other Credit Documents, the parties hereto acknowledge and agree that the actions relating to the Mortgages and Real Property of the Borrower and its Subsidiaries and such other matters described on Annex X shall be completed in accordance with Annex X. The provisions of Annex X shall be deemed incorporated herein by reference as fully as if set forth herein in its entirety.

          All provisions of this Credit Agreement and the other Credit Documents (including, without limitation, all conditions precedent, representations, warranties, covenants, events of default and other agreements herein and therein) shall be deemed modified to the extent necessary to effect the foregoing (and to permit the taking of the actions described above within the time periods required above, rather than as otherwise provided in the Credit Documents). The parties hereto acknowledge and agree that the failure to take any of the actions required above, within the relevant time periods required above, shall give rise to an immediate Event of Default pursuant to this Agreement.

          12.20 Special Provisions Relating to Amendment and Restatement. (a) The Required Lenders under, and as defined in, the Third Amended and Restated Credit Agreement hereby consent to the “refinancing indebtedness” under this Agreement being treated as “indebtedness pursuant to the Credit Agreement” for purposes of the Pledge Agreement, the Security Agreement, the Intercompany Subordination Agreement and the Mortgages. The Borrower, for its part, hereby gives notice that the refinancing indebtedness under this Agreement shall be treated as “issued under the Credit Agreement” for purposes of the Pledge Agreement, Security Agreement, the Intercompany Subordination Agreement and the Mortgages.

          (b) The parties hereto acknowledge and agree that:

     (i) the Borrower and its Subsidiaries (as defined in the Third Amended and Restated Credit Agreement) executed and delivered the Security Documents (as defined in the Third Amended and Restated Credit Agreement) in favor of the Collateral Agent on behalf of the Secured Creditors (as defined in the Third Amended and Restated Credit Agreement) to secure the payment and performance of, inter alia, the Obligations (as defined in the Third Amended and Restated Credit Agreement);

     (ii) the security interests granted to the Collateral Agent on behalf of the Secured Creditors pursuant to the Security Documents (as defined in the Third Amended and Restated Credit Agreement) shall remain outstanding and in full force and effect,

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without interruption or impairment of any kind, in accordance with the terms of such Security Documents and shall continue to secure the Obligations (as defined in such Security Documents);

     (iii) the Obligations represent, among other things, the amendment, restatement, renewal, extension, consolidation and modification of the Obligations (as defined in the Third Amended and Restated Credit Agreement) arising in connection with the Third Amended and Restated Credit Agreement and other Credit Documents (as defined in the Third Amended and Restated Credit Agreement) executed in connection therewith;

     (iv) (a) the Third Amended and Restated Credit Agreement and the other Credit Documents (as defined in the Third Amended and Restated Credit Agreement) executed in connection therewith and the collateral pledged thereunder shall secure, without interruption or impairment of any kind, all existing Indebtedness (as defined in the Third Amended and Restated Credit Agreement) under the Third Amended and Restated Credit Agreement and the other Credit Documents (as defined in the Third Amended and Restated Credit Agreement) executed in connection therewith, as they may be amended, restated, renewed, extended, consolidated and modified hereunder, together with all other Obligations hereunder; (b) all Liens evidenced by the Credit Documents (as defined in the Third Amended and Restated Credit Agreement) executed in connection therewith are hereby ratified, confirmed and continued; and (c) the Credit Documents are intended to restate, renew, extend, consolidate, amend and modify the Third Amended and Restated Credit Agreement and the other Credit Documents (as defined in the Third Amended and Restated Credit Agreement) executed in connection therewith; and

     (v) (a) the provisions of the Third Amended and Restated Credit Agreement and the other Credit Documents (as defined in the Third Amended and Restated Credit Agreement) executed in connection therewith, to the extent restated, renewed, extended, consolidated, amended and modified hereby or the other corresponding Credit Documents, are hereby superseded and replaced by the provisions hereof and of the corresponding other Credit Documents; (b) the Notes restate, renew, extend, consolidate, amend, modify, replace, are substituted for and supersede, but do not extinguish, the Indebtedness (as defined in the Third Amended and Restated Credit Agreement) arising under the Notes (as defined in the Third Amended and Restated Credit Agreement) issued pursuant to the Third Amended and Restated Credit Agreement; and (c) the execution and delivery of the Credit Documents, and the performance by Credit Parties of their respective obligations thereunder shall not constitute a novation.

          (c) By its execution and delivery of this Agreement, each of the Lenders hereby (i) consents to the execution and delivery of the RAI Assumption Agreement by the Borrower and RJRTH and the assignment by RJRTH to the Borrower, and the Borrower’s assumption, of all of RJRTH’s rights and obligations under the Third Amended and Restated Credit Agreement and the other Credit Documents (as defined in the Third Amended and Restated Credit Agreement) to which RJRTH is a party, effected thereby, (ii) authorizes the Administrative Agent (on behalf of such Lender) to execute and acknowledge the RAI Assumption Agreement on its behalf, (iii) consents to the release of the pledge of the capital

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stock of RJRTH held by the Borrower pursuant to the Pledge Agreement (as defined in the Third Amended and Restated Credit Agreement and as in effect immediately prior to the Fourth Restatement Effective Date) (it being understood that the capital stock of RJRTH held by the Borrower shall be re-pledged in favor of the Collateral Agent pursuant to the Pledge Agreement on the Fourth Restatement Effective Date in accordance with the terms of the Pledge Agreement) and (iv) consents to the release of the pledge of the capital stock of Reynolds Tobacco held by RJRTH pursuant to the Pledge Agreement (as defined in the Third Amended and Restated Credit Agreement and as in effect immediately prior to the Fourth Restatement Effective Date) (it being understood that the capital stock of Reynolds Tobacco held by RJRTH shall be re-pledged in favor of the Collateral Agent to secure the RJRTH Intecompany Note Obligations (as defined in the Pledge Agreement) on the Fourth Restatement Effective Date, all as more particularly set forth in the Pledge Agreement).

          SECTION 13. Borrower Guaranty.

          13.01 The Guaranty. In order to induce the Lenders to enter into this Agreement and to extend credit hereunder, to induce the Credit Card Issuers to enter into and/or maintain Secured Credit Card Agreements, to induce the Lenders or any of their respective affiliates to enter into Hedging Agreements and to induce Calyon to maintain the Existing Interest Rate Swap Agreement and, in recognition of the direct benefits to be received by the Borrower from the proceeds of the Loans, the issuance of the Letters of Credit and the entering into and/or maintenance of Secured Credit Card Agreements and Hedging Agreements, the Borrower hereby agrees as follows: the Borrower hereby unconditionally and irrevocably guarantees, as primary obligor and not merely as surety the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of the Guaranteed Obligations to the Guaranteed Creditors. If any or all of the Guaranteed Obligations to the Guaranteed Creditors becomes due and payable hereunder, the Borrower unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand, together with any and all expenses which may be incurred by the Guaranteed Creditors in collecting any of the Guaranteed Obligations. This Borrower Guaranty is a guaranty of payment and not of collection. This Borrower Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. If claim is ever made upon any Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including any Guaranteed Party), then and in such event the Borrower agrees that any such judgment, decree, order, settlement or compromise shall be binding upon the Borrower, notwithstanding any revocation of this Borrower Guaranty or any other instrument evidencing any liability of any other Guaranteed Party, and the Borrower shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee.

          13.02 Bankruptcy. Additionally, the Borrower unconditionally and irrevocably guarantees the payment of any and all of the Guaranteed Obligations to the Guaranteed Creditors whether or not due or payable by any Guaranteed Party upon the occurrence of any of the events

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specified in Section 9.05, and unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on demand.

          13.03 Nature of Liability. The liability of the Borrower hereunder is exclusive and independent of any guaranty of the Guaranteed Obligations whether executed by the Borrower, any other guarantor or by any other party, and the liability of the Borrower hereunder is not affected or impaired by (a) any direction as to application of payment by any Guaranteed Party or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Guaranteed Obligations, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by any Guaranteed Party, or (e) any payment made to the Guaranteed Creditors on the Guaranteed Obligations which any such Guaranteed Creditor repays to any Guaranteed Party pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and the Borrower waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, or (f) any action or inaction of the type described in Section 13.05, or (g) the lack of validity or enforceability of any Credit Document or any other instrument relating thereto.

          13.04 Independent Obligation. No invalidity, irregularity or unenforceability of all or any part of the Guaranteed Obligations shall affect, impair or be a defense to this Borrower Guaranty, and this Borrower Guaranty shall be primary, absolute and unconditional notwithstanding the occurrence of any event or the existence of any other circumstances which might constitute a legal or equitable discharge of a surety or guarantor except payment in full of the Guaranteed Obligations of the Borrower. The obligations of the Borrower hereunder are independent of the obligations of any Guaranteed Party, any other guarantor or any other Person and a separate action or actions may be brought and prosecuted against the Borrower whether or not action is brought against any Guaranteed Party, any other guarantor or any other Person and whether or not any Guaranteed Party, any other guarantor or any other Person be joined in any such action or actions. The Borrower waives, to the full extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by any Guaranteed Party with respect to any Guaranteed Obligations or other circumstance which operates to toll any statute of limitations as to such Guaranteed Party shall operate to toll the statute of limitations as to the Borrower.

          13.05 Authorization. The Borrower authorizes the Guaranteed Creditors without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to:

     (i) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations (including any increase or decrease in the rate of interest thereon) or any liability incurred directly or indirectly in respect thereof, and this Borrower Guaranty made shall apply to the Guaranteed Obligations as so changed, extended, renewed, increased or altered;

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     (ii) take and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, impair, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst;

     (iii) exercise or refrain from exercising any rights against any Guaranteed Party or others or otherwise act or refrain from acting;

     (iv) release or substitute any one or more endorsers, guarantors, any Guaranteed Party or other obligors;

     (v) settle or compromise any of the Guaranteed Obligations or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of any Guaranteed Party to their respective creditors other than the Guaranteed Creditors;

     (vi) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of any Guaranteed Party to the Guaranteed Creditors regardless of what liability or liabilities of such Guaranteed Party remain unpaid;

     (vii) consent to or waive any breach of, or any act, omission or default under, this Agreement, any other Credit Document, any Secured Credit Card Agreement, any Hedging Agreement or any of the instruments or agreements referred to herein or therein, or otherwise amend, modify or supplement this Agreement, any other Credit Document, any Secured Credit Card Agreement, any Hedging Agreement or any of such other instruments or agreements; and/or

     (viii) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of the Borrower from its liabilities under this Borrower Guaranty.

          13.06 Reliance. It is not necessary for the Guaranteed Creditors to inquire into the capacity or powers of any Party or the officers, directors, partners or agents acting or purporting to act on their behalf, and any Guaranteed Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder by the Borrower.

          13.07 Subordination. Any of the indebtedness of any Guaranteed Party now or hereafter owing to the Borrower is hereby subordinated to the Guaranteed Obligations of such Guaranteed Party owing to the Guaranteed Creditors; and if the Administrative Agent so requests at a time when an Event of Default exists, all such indebtedness of such Guaranteed Party to the Borrower shall be collected, enforced and received by the Borrower for the benefit of the Guaranteed Creditors and be paid over to the Administrative Agent on behalf of the Guaranteed Creditors on account of the Guaranteed Obligations of such Guaranteed Party to the Guaranteed Creditors, but without affecting or impairing in any manner the liability of the Borrower under the other provisions of this Borrower Guaranty. Prior to the transfer by the Borrower to any

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Person (other than a Subsidiary Guarantor) of any note or negotiable instrument evidencing any of the indebtedness of any Guaranteed Party to the Borrower, the Borrower shall mark such note or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, the Borrower hereby agrees with the Guaranteed Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Borrower Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash.

          13.08 Waiver. (a) Each Borrower waives any right (except as shall be required by applicable statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed against any Guaranteed Party, any other guarantor or any other party, (ii) proceed against or exhaust any security held from any Party, any other guarantor or any other party or (iii) pursue any other remedy in any Guaranteed Creditor’s power whatsoever. The Borrower waives any defense based on or arising out of any defense of any Guaranteed Party, any other guarantor or any other party, other than payment in full in cash of the Guaranteed Obligations, based on or arising out of the disability of any Guaranteed Party, any other guarantor or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Guaranteed Party other than payment in full in cash of the Guaranteed Obligations. The Guaranteed Creditors may, at their election, foreclose on any security held by the Administrative Agent or any other Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Guaranteed Creditors may have against any Guaranteed Party or any other party, or any security, without affecting or impairing in any way the liability of the Borrower hereunder except to the extent the Guaranteed Obligations of the Borrower have been paid in full in cash. The Borrower waives any defense arising out of any such election by the Guaranteed Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Borrower against any Guaranteed Party or any other party or any security.

          (b) The Borrower waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Borrower Guaranty, and notices of the existence, creation, modification or incurring of new or additional Guaranteed Obligations. The Borrower assumes all responsibility for being and keeping itself informed of each Guaranteed Party’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which the Borrower assumes and incurs hereunder, and agrees that the Guaranteed Creditors shall have no duty to advise the Borrower of information known to it regarding such circumstances or risks.

          (c) Until such time as the Guaranteed Obligations have been paid in full in cash, the Borrower hereby waives all rights of subrogation which it may at any time otherwise have as a result of this Borrower Guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or otherwise) to the claims of the Guaranteed Creditors against any other guarantor of the Guaranteed Obligations and all contractual, statutory or common law rights of

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reimbursement, contribution or indemnity from any Guaranteed Party or any other guarantor which it may at any time otherwise have as a result of this Borrower Guaranty.

          13.09 Payments. All payments made by the Borrower pursuant to this Section 13 shall be made in U.S. Dollars. All payments made by the Borrower pursuant to this Section 13 will be made without setoff, counterclaim or other defense, and shall be subject to the payment provisions applicable to the Borrower in Sections 4.03 and 4.04.

* * *

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          IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

REYNOLDS AMERICAN INC.
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer

Credit Agreement

JPMORGAN CHASE BANK, N.A., Individually and as Administrative Agent, Lead Agent, Joint Lead Arranger and Joint Bookrunner
By:	/s/ Robert T. Sacks
	Name	Robert T. Sacks
	Title:	Managing Director

Credit Agreement

LEHMAN BROTHERS INC., as a Joint Lead Arranger and Joint Bookrunner
By:	/s/ Jeffrey Abt
	Name	Jeffrey Abt
	Title:	Managing Director
LEHMAN COMMERCIAL PAPER INC., Individually and as Syndication Agent
By:	/s/ Jeffrey Abt
	Name	Jeffrey Abt
	Title:	Authorized Signatory

Credit Agreement

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
BAYERISCHE HYPO- UND VEREINSBANK AG, New York Branch
By:	/s/Marianne Weinzinger
	Name: Marianne Weinzinger Title: Director
By:	/s/Richard Cordover
	Name: Richard Cordover Title: Director

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
CITICORP USA, INC. As Syndication Agent and as Lender
By:	/s/Carolyn A. Kee
	Name: Carolyn A. Kee Title: Vice President
CITIBANK, N.A., as Letter of Credit Issuer
By:	/s/Carolyn A. Kee
	Name: Carolyn A. Kee Title: Vice President

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
City National Bank of New Jersey
By:	/s/Louis E. Prezeau
	Name: Louis E. Prezeau Title: President & CEO

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
Farm Credit Bank of Texas
By:	/s/Isaac E. Bennett
	Name: Isaac E. Bennett Title: Vice President

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
Farm Credit Services of Minnesota Valley, PCA dba
FCS Commercial Finance Group
By:	/s/Daniel J. Best
	Name: Daniel J. Best Title: Commercial Loan Officer

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
GENERAL ELECTRIC CAPITAL CORPORATION
By:	/s/Peter DiBiasi
	Name: Peter DiBiasi Title: Duly Authorized Signatory

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
Goldman Sachs Credit Partners
By:	/s/William Archer
	Name: William Archer Title: Authorized Signatory

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
LEHMAN COMMERCIAL PAPER INC.
By:	/s/Janine M. Shugan
	Name: Janine M. Shugan Title: Authorized Signatory

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
MIZUHO CORPORATE BANK, LTD.
By:	/s/James Fayen
	Name: James Fayen Title: Deputy General Manager

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
MORGAN STANLEY BANK
By:	/s/Daniel Twenge
	Name: Daniel Twenge Title: Vice President

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
NATIONAL CITY BANK
By:	/s/Nina Myers
	Name: NINA MYERS Title: ACCOUNT OFFICER

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
Raymond James Bank, FSB
By:	/s/Thomas F. Macina
	Name: Thomas F. Macina Title: Senior Vice President

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Scotiabanc Inc.
By:	/s/William Zarrett
	Name: William Zarrett Title: Managing Director

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
The Bank of Nova Scotia:
By:	/s/Dana Maloney
	Name: Dana Maloney Title: Managing Director

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
The Bank of New York
By:	/s/David C. Siegel
	Name: David C. Siegel Title: Vice President

SIGNATURE PAGE TO THE FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF MAY 31, 2006, AMONG REYNOLDS AMERICAN INC., THE VARIOUS LENDING INSTITUTIONS FROM TIME TO TIME PARTY THERETO, JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, LEHMAN COMMERCIAL PAPER INC. AND CITICORP USA, INC., AS SYNDICATION AGENTS, GENERAL ELECTRIC CAPITAL CORPORATION, AS DOCUMENTATION AGENT, LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC. AND GENERAL ELECTRIC CAPITAL CORPORATION, AS JOINT LEAD ARRANGERS AND LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. AND CITIGROUP GLOBAL MARKETS INC., AS JOINT BOOKRUNNERS
Name of Institution:
Wachovia Bank, National Association
By:	/s/Denis Waltrich
	Name: Denis Waltrich Title: Associate

ANNEX I

LENDERS AND COMMITMENTS

	Revolving Loan		Term
Lender	Commitment		Loan Commitment
JPMorgan Chase Bank, N.A.	$	50,000,000	$	516,666,666.67
Lehman Commercial Paper Inc.	$	50,000,000	$	516,666,666.67
Citicorp USA, Inc.	$	50,000,000	$	516,666,666.66
General Electric Capital Corporation	$	50,000,000
Mizuho Corporate Bank, Ltd.	$	50,000,000
AG First Farm Credit	$	45,000,000
Farm Credit Bank of Texas	$	45,000,000
Morgan Stanley	$	30,000,000
The Bank of Nova Scotia	$	30,000,000
Wachovia Bank, National Association	$	30,000,000
Bank of New York	$	30,000,000
HVB	$	20,000,000
National City Bank	$	15,000,000
Goldman Sachs	$	15,000,000
Raymond James Bank, FSB	$	15,000,000
City National Bank of New Jersey	$	15,000,000
Farm Credit Services of Minnesota Vally, PCA dba FCS Commercial Finace Group	$	10,000,000
Total:	$	550,000,000	$	1,550,000,000

ANNEX II

LENDER ADDRESSES

Lender	Address
JPMorgan Chase Bank, N.A.	270 Park Avenue, Floor 4
	New York, NY 10017
	Attn: Robert T. Sacks
	Tel: 212-270-42118
	Fax: 212-270-6637
	e-mail: robert.sacks@jpmorgan.com
	with a copy to:
	270 Park Avenue, Floor 15
	New York, NY 10017
	Attn: Raju Nanoo
	with a copy to:
	1111 Fannin Street, Floor 10
	Houston, TX 77002-6925
	Attn: Jennifer A. Anyingbo
	Tel: 713-750-2110
	Fax: 713-750-2782
	e-mail: Jennifer.anyigbo@jpmorgan.com
Lehman Commercial Paper Inc.	745 Seventh Avenue
	New York, NY 10019
	Attention: Joylynn A. Jarvis/Janine Shugan
	Telephone: 212-526-6560/212-526-8625
	Facsimile: 212-520-0450/917-522-0139
	E-mail: JJarvis@lehman.com
	jshugan@lehman.com
Citicorp USA, Inc.	400 Perimeter Center Terrace, NE
	Suite 600
	Atlanta, GA 30346
	Attention: Kirk Lakeman
	Telephone: 770-668-8120
	Facsimile: 404-935-9831
	E-mail: kirk.p.lakeman@citigroup.com

EX-10.2

EXHIBIT 10.2

SECOND AMENDED AND RESTATED PLEDGE AGREEMENT

PLEDGE AGREEMENT, dated as of July 15, 2003, as amended and restated as of July 30, 2004, and as further amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, restated, supplemented and/or otherwise modified from time to time, this “Agreement”), made by each of the undersigned in its capacity as a pledgor (together with any other entity that becomes a party hereto pursuant to Section 23 hereof, each, a “Pledgor” and, collectively, the “Pledgors”), in favor of JPMORGAN CHASE BANK, N.A., as Collateral Agent (including any successor collateral agent, the “Pledgee”) for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, terms used herein and defined in the Credit Agreement referred to below shall be used herein as therein defined.

W I T N E S S E T H:

WHEREAS, Reynolds American Inc. (the “Borrower”), the various lending institutions from time to time party thereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative Agent”) have entered into a Credit Agreement, dated as of May 7, 1999, as amended and restated as of November 17, 2000, as further amended and restated as of May 10, 2002, as further amended and restated as of July 30, 2004, and as further amended and restated as of May 31, 2006, providing for the making of Loans to the Borrower and the issuance of, and participation in, Letters of Credit for the account of the Borrower, all as contemplated therein (with (i) the Lenders, the Swingline Lender, each Letter of Credit Issuer, the Administrative Agent, the Lead Agents, the Pledgee and the Collateral Agent being herein called the “Lender Creditors” and (ii) the term “Credit Agreement” as used herein to mean the Credit Agreement described above in this paragraph, as the same may be further amended, modified, extended, renewed, replaced, restated, supplemented and/or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative, lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (x) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (y) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by the Borrower to the Collateral Agent);

WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and/or may in the future from time to time enter into, one or more agreements or arrangements with JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under

the Credit Agreement for any reason (JPMCB, any such affiliate and their respective successors and assigns, each, a “Credit Card Issuer”)) providing for credit card loans made available to certain employees of the Borrower and/or one or more of its Subsidiaries (each such agreement or arrangement with a Credit Card Issuer, a “Secured Credit Card Agreement”);

WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and/or may in the future from time to time enter into, one or more (i) interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements), and/or (ii) foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency or commodity values (each such agreement or arrangement with a Hedging Creditor (as hereinafter defined), together with the Existing Interest Rate Swap Agreement, a “Secured Hedging Agreement”), with any Lender, any affiliate thereof or a syndicate of financial institutions organized by a Lender or an affiliate of a Lender (even if any such Lender ceases to be a Lender under the Credit Agreement for any reason) (any such Lender, affiliate or other such financial institution that participates therein, together with Calyon (as counterparty to the Existing Interest Rate Swap Agreement), and in each case their subsequent successors and assigns, collectively, the “Hedging Creditors”, and together with the Lender Creditors and each Credit Card Issuer, the “Lender Secured Creditors”);

WHEREAS, R.J. Reynolds Tobacco Holdings, Inc., a Wholly-Owned Subsidiary of the Borrower (“RJRTH”) and the Existing Senior Notes Trustee, on behalf of the holders of the Existing Senior Notes, have entered into the Existing Senior Notes Indenture, providing for the issuance of Existing Senior Notes by RJRTH;

WHEREAS, the Borrower and the New Senior Notes Trustee, on behalf of the holders of the New Senior Notes, have entered into the New Senior Notes Indenture, providing for the issuance from time to time of New Senior Notes by the Borrower;

WHEREAS, the Borrower and the Refinancing Senior Notes Trustee, on behalf of the holders of the Refinancing Senior Notes, may from time to time enter into the Refinancing Senior Notes Indenture, providing for the issuance from time to time of Refinancing Senior Notes by the Borrower;

WHEREAS, pursuant to the Subsidiary Guaranty, each Pledgor (other than the Borrower and NA Holdings) has jointly and severally guaranteed to the Lender Secured Creditors the payment when due of the Guaranteed Obligations (as defined in the Subsidiary Guaranty);

WHEREAS, pursuant to the Borrower Guaranty, the Borrower has guaranteed to the Hedging Creditors and the Credit Card Issuers the payment when due of the Guaranteed Obligations;

WHEREAS, each Specified Existing Senior Notes Pledgor (other than RJRTH) has jointly and severally guaranteed to the Existing Senior Notes Creditors the payment when due of principal and interest on the Existing Senior Notes;

WHEREAS, each Specified RAI Senior Notes Pledgor (other than the Borrower) has jointly and severally guaranteed to the New Senior Notes Creditors the payment when due of principal and interest on the New Senior Notes;

WHEREAS, each Specified RAI Senior Notes Pledgor (other than the Borrower) may from time to time jointly and severally guarantee to the Refinancing Senior Notes Creditors the payment when due of principal and interest on the Refinancing Senior Notes;

WHEREAS, RJRTH has issued the RJRTH Intercompany Note in favor of the Borrower as consideration for, inter alia, (i) the loan by the Borrower to RJRTH in an aggregate principal amount of $1,650,000,000 made on the Fourth Restatement Effective Date with the proceeds of the issuance of the Initial New Senior Notes, (ii) the loan by the Borrower to RJRTH in an aggregate principal amount of $1,550,000,000 made on the Fourth Restatement Effective Date with the proceeds of the incurrence of Term Loans under the Credit Agreement, (iii) the guaranty by the Borrower of all amounts owing by RJRTH to the Existing Senior Notes Creditors in respect of the Existing Senior Notes, (iv) the assumption by the Borrower of all indebtedness, liabilities and obligations of RJRTH under the Third Amended and Restated Credit Agreement and the other Credit Documents to which it is a party pursuant to the RAI Assumption Agreement and (v) the Borrower’s agreements in favor of RJRTH under the RAI Existing Senior Notes Assumption and Indemnification Agreement;

WHEREAS, the capital stock of Reynolds Tobacco is being pledged pursuant to this Agreement to secure the RJRTH Intercompany Note Obligations;

WHEREAS, certain of the Pledgors have heretofore entered into a Pledge Agreement, dated as of July 15, 2003, and amended and restated as of July 30, 2004 (as so amended and restated and as the same may be further amended, restated, modified and/or supplemented from time to time to, but not including, the date hereof, the “First Amended and Restated Pledge Agreement”);

WHEREAS, the Pledgors desire to further amend and restate the First Amended and Restated Pledge Agreement in the form of this Agreement;

WHEREAS, the Credit Agreement requires this Agreement be executed and delivered to the Pledgee by the Pledgors and the Secured Credit Card Agreements, the Secured Hedging Agreements, the Existing Senior Notes Indenture, the New Senior Notes Indenture and the RJRTH Intercompany Note require that this Agreement secure the respective Obligations as provided herein;

WHEREAS, each Pledgor desires to execute this Agreement to satisfy the requirements described in the preceding paragraph;

NOW, THEREFORE, in consideration of the benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Pledgee and hereby covenants and agrees with the Pledgee as follows:

1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor for the benefit of the relevant Secured Creditors to secure:

     (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the

automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in connection with each Credit Document to which such Pledgor is a party (including, without limitation, indemnities, fees and interest (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)) and the due performance of and compliance by each Pledgor with the terms of each such Credit Document (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or liabilities with respect to Secured Credit Card Agreements and Secured Hedging Agreements, being herein collectively called the “Credit Document Obligations”);

     (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in connection with each Secured Credit Card Agreement, including, all obligations, if any, of each Pledgor under its Guaranty in respect of Secured Credit Card Agreements (all such obligations and liabilities under this clause (ii) being herein collectively called the “Credit Card Obligations”);

     (iii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in connection with each Secured Hedging Agreement, including, all obligations, if any, of each Pledgor under its Guaranty in respect of Secured Hedging Agreements (all such obligations and liabilities under this clause (iii) being herein collectively called the “Hedging Obligations”);

     (iv) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in connection with each Existing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by each Pledgor with the terms of each such Existing Senior Notes Document (all such obligations and liabilities under this clause (iv), being herein collectively called the “Existing Senior Notes Obligations”);

     (v) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the

automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in connection with each New Senior Note Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by each Pledgor with the terms of each such New Senior Notes Document (all such obligations and liabilities under this clause (v) being herein collectively called the “New Senior Notes Obligations”);

     (vi) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Pledgor, now existing or hereafter incurred under, arising out of or in connection with each Refinancing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by each Pledgor with the terms of each such Refinancing Senior Notes Document (all such obligations and liabilities under this clause (vi), being herein collectively called the “Refinancing Senior Notes Obligations”);

     (vii) if such Pledgor is RJRTH (but, for avoidance of doubt, without limiting the Obligations of RJRTH arising under any other sub-clause of this Section 1), the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all principal and accrued but unpaid interest (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) owing by RJRTH, now existing or hereafter incurred under, arising out of or in connection with the RJRTH Intercompany Note (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of RJRTH at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance of and compliance by RJRTH with the terms of the RJRTH Intercompany Note (all such obligations under this clause (vii) being herein collectively called the “RJRTH Intercompany Note Obligations”);

     (viii) any and all sums advanced by the Pledgee in order to preserve the Collateral and/or its security interest therein;

     (ix) in the event of any proceeding for the collection of the Obligations (as defined below) or the enforcement of this Agreement, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any

exercise by the Pledgee of its rights hereunder, together with reasonable attorneys’ fees and court costs; and

     (x) all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under Section 11 of this Agreement;

all such obligations, liabilities, sums and expenses set forth in clauses (i) through (x) of this Section 1 being herein collectively called the “Obligations”.

2. DEFINITIONS; REPRESENTATIONS. (a) The following capitalized terms used herein shall have the definitions specified below:

“Additional Senior Notes” shall have the meaning provided in the Credit Agreement.

“Adverse Claim” has the meaning given such term in Section 8-102(a)(1) of the UCC.

“Agreement” shall have the meaning set forth in the first paragraph of this Agreement.

“Applicable Obligations” shall mean (i) for each Pledgor that is a Specified RAI Senior Notes Pledgor but not a Specified Existing Senior Notes Pledgor, all the Obligations other than the Existing Senior Notes Obligations and the RJRTH Intercompany Note Obligations, (ii) for RJRTH (unless and until it becomes a Specified RAI Senior Notes Pledgor), all the Obligations other than the New Senior Notes Obligations and the Refinancing Senior Notes Obligations, (iii) for each Pledgor that is both a Specified RAI Senior Notes Pledgor and a Specified Existing Senior Notes Pledgor, all the Obligations other than the RJRTH Intercompany Note Obligations, and (iv) for each Pledgor (other than RJRTH) that is neither a Specified RAI Senior Notes Pledgor nor a Specified Existing Senior Notes Pledgor, all the Obligations other than the Existing Senior Notes Obligations, the New Senior Notes Obligations, the Refinancing Senior Notes Obligations and the RJRTH Intercompany Note Obligations, provided that (x) the Existing Senior Notes Obligations shall be excluded from the Applicable Obligations of a Specified Existing Senior Notes Pledgor, to the extent the Existing Senior Notes Documents do not require the Existing Senior Notes Obligations to be secured pursuant to this Agreement (or, in the case of the Applicable Obligations of the Borrower, to the same extent the Existing Senior Notes Obligations are excluded from the Applicable Obligations of RJRTH as provided above in this clause (x)), (y) the New Senior Notes Obligations shall be excluded from the Applicable Obligations of a Specified RAI Senior Notes Pledgor, to the extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured pursuant to this Agreement, and (z) the Refinancing Senior Notes Obligations shall be excluded from the Applicable Obligations of a Specified RAI Senior Notes Pledgor, to the extent the Refinancing Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured pursuant to this Agreement.

“Borrower” shall have the meaning provided in the recitals to this Agreement.

          “CA Termination Date” shall have the meaning set forth in Section 18 hereof.

          “Certificated Security” has the meaning given such term in Section 8-102(a)(4) of the UCC.

          “Class” shall have the meaning provided in Section 20 hereof.

          “Clearing Corporation” has the meaning given such term in Section 8-102(a)(5) of the UCC.

          “Collateral” shall have the meaning provided in Section 3.1 hereof.

          “Collateral Accounts” means any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited.

          “Collateral Proceeds” shall have the meaning provided in Section 9 hereof.

“Credit Agreement” shall have the meaning provided in the recitals to this Agreement.

“Credit Card Issuer” shall have the meaning provided in the recitals to this Agreement.

“Credit Card Obligations” shall have the meaning provided in Section 1 hereof.

“Credit Document Obligations” shall have the meaning provided in Section 1 hereof.

“Designated Existing Senior Notes Collateral” shall mean, with respect to any Specified Existing Senior Notes Pledgor, Collateral owned by such Specified Existing Senior Notes Pledgor consisting of (i) any shares of stock, indebtedness or other obligations of a Subsidiary of RJRTH held by or owing to such Specified Existing Senior Notes Pledgor (other than the Borrower), (ii) any Principal Property of such Specified Existing Senior Notes Pledgor (other than the Borrower), or (iii) in the case of the Borrower, at any time prior to the time RJRTH becomes a Specified RAI Senior Notes Pledgor, the RJRTH Intercompany Note and all of the Borrower’s rights under this Agreement in its capacity as the RJRTH Intercompany Note Creditor (including its right to receive proceeds from any sale or other disposition of the capital stock of Reynolds Tobacco to repay amounts owing under the RJRTH Intercompany Note).

“Designated RAI Senior Notes Collateral” shall mean, with respect to any Specified RAI Senior Notes Pledgor, Collateral owned by such Specified RAI Senior Notes Pledgor consisting of (i) any Principal Property of such Specified RAI Senior Notes Pledgor, (ii) in the case of RJRTH, at any time on or after the time RJRTH becomes a Specified RAI Senior Notes Pledgor, the capital stock of Reynolds Tobacco, (iii) at any time on or after the time RJRTH becomes a Specified RAI Senior Notes Pledgor, all indebtedness and other obligations owing by Reynolds Tobacco owned or held by such Specified RAI Senior Notes Pledgor or (iv) in the case of the Borrower, at any time prior to the time RJRTH becomes a Specified RAI Senior Notes Pledgor, the RJRTH Intercompany Note and all of the Borrower’s rights under this Agreement in its capacity as the RJRTH Intercompany Note Creditor (including its right to receive proceeds from any sale or other disposition of the capital stock of Reynolds Tobacco to repay amounts owing under the RJRTH Intercompany Note).

          “Event of Default” shall mean and include (i) any Event of Default under the Credit Agreement, (ii) any “event of default” under the Existing Senior Notes Documents, the New Senior Notes Documents or the Refinancing Senior Notes Documents and (iii) any payment

default (after the expiration of any applicable grace period) under any Secured Credit Card Agreement or any Secured Hedging Agreement.

          “Exchange Senior Notes” shall have the meaning provided in the Credit Agreement.

“Excluded Domestic Entities” shall mean and include each Subsidiary of RJRTH (other than Reynolds Tobacco).

“Excluded Foreign Entities” shall mean and include one or more direct Subsidiaries of any Pledgor that is not a Domestic Subsidiary and is (x) a Subsidiary of RJRTH or (y) designated as an “Excluded Foreign Entity” by the Borrower pursuant to a written notice delivered to the Pledgee; provided that if at the time of the delivery (or required delivery) of the financial statements of the Borrower pursuant to Section 7.01(a) or (b) of the Credit Agreement, either (i) the aggregate book value of the assets of any Excluded Foreign Entity (determined on a consolidating basis) as at the last day of the fiscal quarter or fiscal year, as the case may be, to which such financial statements relate is equal to or greater than $100,000,000 or (ii) the net sales of any Excluded Foreign Entity (determined on a consolidating basis) as at the last day of the fiscal quarter or fiscal year, as the case may be, to which such financial statements relate is equal to or greater than $100,000,000 (provided that such net sales shall be determined on a pro forma basis for the 12 months last ended when determining whether any Person that is the survivor of any merger or consolidation or that is the transferee of any property or assets from other Subsidiaries of the Borrower is a Material Subsidiary), then on the 90th day following the delivery (or required delivery) of such financial statements, such entity shall cease to be an “Excluded Foreign Entity” for purposes of this Agreement.

“Excluded Investment Entities” shall mean and include (i) Targacept, Inc., a Delaware corporation, (ii) Technology Concepts & Design, Inc., a Virginia corporation, (iii) Intellilink Services, Inc., a Georgia corporation, (iv) Large Scale Biology Corporation and (v) preferred stock and/or “income notes” of any investment vehicle owned by the Borrower or any of its Subsidiaries, so long as (x) such investment vehicle invests solely in debt securities; and (y) either: (I) such preferred stock and/or “income notes” of such investment vehicle are owned by the Borrower or its Subsidiaries on the Fourth Restatement Effective Date; or (II) the aggregate amount of cash used to acquire such preferred stock and/or “income notes” after the Fourth Restatement Effective Date does not exceed $35,000,000.00.

“Excluded RJRTH Foreign Subsidiary” shall mean any Subsidiary of RJRTH that is not a Domestic Subsidiary of RJRTH.

“Existing Senior Notes” shall mean, collectively, (i) RJRTH’s 6.50% Notes due June 1, 2007 in an initial aggregate principal amount equal to $300,000,000 (ii) RJRTH’s 7.875% Notes due May 15, 2009 in an initial aggregate principal amount equal to $200,000,000, (iii) RJRTH’s 6.50% Notes due July 15, 2010 in an initial aggregate principal amount equal to $300,000,000, (iv) RJRTH’s 7.25% Notes due June 1, 2012 in an initial aggregate principal amount equal to $450,000,000, and (v) RJRTH’s 7.30% Notes due July 15, 2015 in an initial aggregate principal amount equal to $200,000,000, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“Existing Senior Notes Creditors” shall mean the Existing Senior Notes Trustee and the holders of the Existing Senior Notes.

“Existing Senior Notes Documents” shall mean the Existing Senior Notes and the Existing Senior Notes Indenture.

“Existing Senior Notes Indenture” shall mean, collectively, (i) the indenture, dated as of May 20, 2002, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee and (ii) the indenture, dated as of May 15, 1999, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“Existing Senior Notes Obligations” shall have the meaning provided in Section 1 hereof.

“Existing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the under the Existing Senior Notes Indenture.

“Financial Asset” has the meaning given such term in Section 8-102(a)(9) of the UCC, provided that the term “Financial Asset” shall not include (i) any capital stock or other equity interests of any Excluded Domestic Entity or any Excluded Investment Entity or (ii) any Margin Stock.

“Hedging Creditors” shall have the meaning provided in the recitals to this Agreement.

“Hedging Obligations” shall have the meaning provided in Section 1 hereof.

“Indemnitees” shall have the meaning set forth in Section 11 hereof.

“Initial New Senior Notes” shall mean, collectively, (i) the Borrower’s 7.25% Senior Secured Notes due 2013 in an initial aggregate principal amount equal to $625,000,000, (ii) the Borrower’s 7.625% Senior Secured Notes due 2016 in an initial aggregate principal amount equal to $775,000,000 and (iii) the Borrower’s 7.75% Senior Secured Notes due 2018 in an initial aggregate principal amount equal to $250,000,000, in each case issued pursuant to the New Senior Notes Indenture, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“Instrument” has the meaning given such term in Section 9-102(a)(47) of the UCC.

“Investment Property” has the meaning given such term in Section 9-102(a)(49) of the UCC, provided that the term “Investment Property” shall not include (i) any capital stock or other Equity Interests of any Excluded Domestic Entity, any Excluded Investment Entity or any Excluded RJRTH Foreign Subsidiary or (ii) any Margin Stock.

“Lender Creditors” shall have the meaning provided in the recitals to this Agreement.

“Lender Secured Creditors” shall have the meaning provided in the recitals to this Agreement.

“Lenders” shall have the meaning provided in the recitals to this Agreement.

“Limited Liability Company Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interests in other limited liability companies), at any time owned or represented by any Limited Liability Company Interest.

“Limited Liability Company Interest” shall mean the entire limited liability company interest at any time directly owned by each Pledgor in any limited liability company; provided that the term “Limited Liability Company Interest” shall not include any limited liability company interest of any Excluded Domestic Entity, any Excluded Investment Entity or any Excluded RJRTH Foreign Subsidiary (with any limited liability company the equity interests of which are required to be included as “Limited Liability Company Interests” hereunder being herein called a “Pledged LLC”).

“LSB Note” shall mean that certain Non-Recourse Secured Promissory Note, dated May 14, 1997, made by Technology Directors II, LLC to R.J. Reynolds Tobacco Company (as assignee of Reynolds Technologies, Inc.) as amended from time to time, in an initial aggregate principal amount of $15,000,000.

“New Senior Notes” shall mean (i) the Initial New Senior Notes, (ii) the Exchange Senior Notes and (iii) the Additional Senior Notes, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“New Senior Notes Creditors” shall mean the New Senior Notes Trustee and the holders of the New Senior Notes.

“New Senior Notes Documents” shall mean the New Senior Notes and the New Senior Notes Indenture.

“New Senior Notes Indenture” shall mean the Indenture, dated as of May 31, 2006, among the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“New Senior Notes Obligations” shall have the meaning provided in Section 1 hereof.

“New Senior Notes Trustee” shall mean the trustee under the New Senior Notes Indenture.

“Notes” shall mean all promissory notes at any time issued to, or held by, any Pledgor, provided that the term “Note” shall not include the LSB Note.

“Noticed Event of Default” shall have the meaning provided in Section 5 hereof.

“Notified Non-Credit Agreement Event of Default” means (i) the acceleration of the maturity of any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes or the failure to pay at maturity any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, or the occurrence of any bankruptcy or insolvency Event of Default under the Existing Senior Notes

Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, (ii) any Event of Default under a Secured Credit Card Agreement or (iii) any Event of Default under a Secured Hedging Agreement, in the case of any event described in clause (i), (ii) or (iii) to the extent the Existing Senior Notes Trustee, New Senior Notes Trustee or the Refinancing Senior Notes Trustee, the relevant Credit Card Issuer or the relevant Hedging Creditor, as the case may be, has given written notice to the Collateral Agent that a “Notified Non-Credit Agreement Event of Default” exists; provided that such written notice may only be given if such Event of Default is continuing and, provided further, that any such Notified Non-Credit Agreement Event of Default shall cease to exist (I) once there is no longer any Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture, the Refinancing Senior Notes Indenture, the respective Secured Credit Card Agreement or the respective Secured Hedging Agreement, as the case may be, in existence, (II) in the case of an Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, after all Existing Senior Notes Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be, have been repaid in full, (III) in the case of an Event of Default under a Secured Credit Card Agreement or Secured Hedging Agreement, such Secured Credit Card Agreement or Secured Hedging Agreement, as the case may be, has been terminated and all Credit Card Obligations or Hedging Obligations, as the case may be, thereunder have been repaid in full, (IV) in the case of an Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, if the Existing Senior Notes Creditors, the New Senior Notes Creditors or the Refinancing Senior Notes Creditors, as the case may be, holding at least a majority of the aggregate principal amount of the outstanding Existing Senior Notes, New Senior Notes or the Refinancing Senior Notes, as the case may be, at such time have rescinded such written notice and (V) in the case of an Event of Default under a Secured Credit Card Agreement or Secured Hedging Agreement, the requisite Credit Card Issuers with Credit Card Obligations or Hedging Creditors with Hedging Obligations, as the case may be, thereunder at such time have rescinded such written notice.

“Obligations” shall have the meaning provided in Section 1 hereof.

“Partnership Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interests in other partnerships), at any time owned or represented by any Pledged Partnership or represented by any Partnership Interest.

“Partnership Interest” shall mean the entire partnership interests (whether general and/or limited partnership interests) at any time directly owned by each Pledgor in any partnership; provided that the term “Partnership Interest” shall not include any partnership interest of any Excluded Domestic Entity, any Excluded Investment Entity or any Excluded RJRTH Foreign Subsidiary (with any partnership the partnership interests of which are required to be included as “Partnership Interests” hereunder being herein called a “Pledged Partnership”).

“Pledged Entity” shall mean each Pledged Partnership and each Pledged LLC.

“Pledged Notes” shall mean all Notes at any time pledged or required to be pledged hereunder.

“Pledged Limited Liability Company Interests” shall mean all Limited Liability Company Interests at any time pledged or required to be pledged hereunder.

“Pledged LLC” shall have the meaning provided in the definition of “Limited Liability Company Interest”.

“Pledged Partnership” shall have the meaning provided in the definition of “Partnership Interest”.

“Pledged Partnership Interests” shall mean all Partnership Interests at any time pledged or required to be pledged hereunder.

“Pledgee” shall have the meaning provided in the first paragraph of this Agreement.

“Pledgor” shall have the meaning provided in the first paragraph of this Agreement.

“Principal Property” shall have the meaning provided in the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture (in each case as in effect on the date hereof), as the context may require.

          “Proceeds” has the meaning given such term in Section 9-102(a)(64) of the UCC.

          “Pro Rata Share” shall have the meaning provided in Section 9 hereof.

“RAI Senior Notes Obligations” shall mean, collectively, the New Senior Notes Obligations and the Refinancing Senior Notes Obligations.

“Refinancing Senior Notes” shall have the meaning provided in the Credit Agreement.

“Refinancing Senior Notes Creditors” shall mean the Refinancing Senior Notes Trustee and the holders of the Refinancing Senior Notes.

“Refinancing Senior Notes Documents” shall mean, collectively, the Refinancing Senior Notes and the Refinancing Senior Notes Indenture.

“Refinancing Senior Notes Indenture” shall mean one or more indentures entered into from time to time providing for the issuance of Refinancing Senior Notes by the Borrower, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“Refinancing Senior Notes Obligations” shall have the meaning provided in Section 1 hereof.

“Refinancing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the Refinancing Senior Notes Indenture.

          “Requisite Creditors” shall have the meaning provided in Section 20 hereof.

“Restricted Pledgor” shall mean Lane and Santa Fe.

          “RJRTH” shall have the meaning provided in the recitals to this Agreement.

          “RJRTH Intercompany Note” shall mean that certain intercompany promissory note, dated May 31, 2006, issued by RJRTH in favor of the Borrower as consideration for , inter alia, (i) the loan by the Borrower to RJRTH in an aggregate principal amount of $1,650,000,000 made on the Fourth Restatement Effective Date with the proceeds of the issuance of the Initial New Senior Notes, (ii) the loan by the Borrower to RJRTH in an aggregate principal amount of $1,550,000,000 made on the Fourth Restatement Effective Date with the proceeds of the incurrence of Term Loans, , (iii) the guaranty by the Borrower of all amounts owing by RJRTH to the Existing Senior Notes Creditors in respect of the Existing Senior Notes, (iv) the assumption by the Borrower of all indebtedness, liabilities and obligations of RJRTH under the Third Amended and Restated Credit Agreement and the other Credit Documents to which it is a party pursuant to the RAI Assumption Agreement and (v) the Borrower’s agreements in favor of RJRTH under the RAI Existing Senior Notes Assumption and Indemnification Agreement, as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “RJRTH Intercompany Note Creditor” shall mean the Borrower, in its capacity as obligee under the RJRTH Intercompany Note.

          “RJRTH Intercompany Note Obligations” shall have the meaning provided in Section 1 hereof.

          “Secured Credit Card Agreements” shall have the meaning set forth in the recitals to this Agreement.

          “Secured Creditors” shall mean, collectively, the Lender Secured Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors, the Refinancing Senior Notes Creditors and the RJRTH Intercompany Note Creditor.

          “Secured Debt Agreements” shall have the meaning provided in Section 5 hereof.

“Secured Hedging Agreement” shall have the meaning provided in the recitals to this Agreement.

          “Securities Account” has the meaning given such term in Section 8-501(a) of the UCC.

          “Security” and “Securities” has the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event also include all Stock and all Notes, provided that the terms “Security” and “Securities” shall not include (i) any capital stock or other equity interests of any Excluded Domestic Entity, any Excluded Investment Entity or any Excluded RJRTH Foreign Subsidiary; (ii) any Margin Stock; or (iii) excess capital stock of a Foreign Corporation not required to be pledged hereunder as a result of the application of the first proviso appearing in the definition of Stock.

          “Security Entitlement” has the meaning given such term in Section 8-102(a)(17) of the UCC.

“Specified Existing Senior Notes Pledgor” shall mean the Borrower, RJRTH and each other Pledgor with Existing Senior Notes Obligations that is a Restricted Subsidiary (as defined in the Existing Senior Notes Indenture).

“Specified RAI Senior Notes Pledgor” shall mean the Borrower and each Pledgor with RAI Senior Notes Obligations that is a Restricted Subsidiary (as defined in the New Senior Notes Indenture). For avoidance of doubt, NA Holdings is not a “Specified RAI Senior Notes Pledgor”.

“Stock” shall mean (i) all of the issued and outstanding shares of stock of any corporation (other than a corporation that is not organized under the laws of the United States or any State or territory thereof (a “Foreign Corporation”)) at any time directly owned by any Pledgor, and (ii) all of the issued and outstanding shares of capital stock of any Foreign Corporation at any time directly owned by any Pledgor, provided that such Pledgor shall not be required to pledge hereunder the capital stock of a Foreign Corporation if more than 65% of the total combined voting power of all classes of capital stock of any Foreign Corporation entitled to vote are pledged hereunder (after giving effect to the pledge of capital stock of such Foreign Corporation by other Pledgors hereunder), provided further that the term “Stock” shall not include (i) any capital stock of any Excluded Domestic Entity, any Excluded Investment Entity or any Excluded RJRTH Foreign Subsidiary, (ii) any Margin Stock and (iii) excess capital stock of a Foreign Corporation not required to be pledged hereunder as a result of the application of the preceding proviso.

          “Subsequent Effective Date” shall have the meaning set forth in Section 18 hereof.

          “Termination Date” shall have the meaning set forth in Section 18 hereof.

          “UCC” means the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific sections or sub-sections of the UCC are references to such sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof.

“Uncertificated Security” has the meaning given such term in Section 8-102(a)(18) of the UCC.

“Unrestricted Secured Creditor” shall mean each Secured Creditor other than the RJRTH Intercompany Note Creditor.

(b) Each Pledgor represents and warrants that on the date hereof (or, if later, the date it first becomes party hereto) and on any Subsequent Effective Date: (a) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed on Annex A hereto; (b) the Stock held by such Pledgor consists of the number and type of shares of the stock of the corporations as described in Annex B hereto; (c) such Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as set forth in Annex B hereto; (d) the Notes held by such Pledgor consist of the promissory notes described in Annex C hereto; (e) the Limited Liability Company Interests held by such Pledgor consists of the number and type of interest of the respective Pledged LLC as described in Annex D hereto; (f) such Limited Liability Company Interests held by such Pledgor constitute the percentage of the issued and outstanding equity interests of the respective Pledged LLC as set forth in Annex D hereto for such Pledgor; (g) except for such immaterial exceptions set forth on Annexes B and C as may be reasonably

acceptable to the Pledgee, each such Pledgor is the holder of record and sole beneficial owner of the Stock, the Notes, the Limited Liability Company Interests, the Partnership Interests and the Securities identified on Annex G hereto; (h) the Partnership Interests held by such Pledgor consists of the number and type of interest of the respective Pledged Partnership as described in Annex E hereto; (i) the Partnership Interests held by such Pledgor constitutes that percentage of the entire Partnership Interest of the respective Pledged Partnership as is set forth in Annex E hereto for such Pledgor; (j) such Pledgor owns or possesses no other Securities except as described on Annexes B, C, D, E and G hereto; and (k) such Pledgor has complied with the respective procedures set forth in Section 3.2(a) with respect to each item of Collateral described in Annexes B through E hereto and Annex G hereto that is required by this Agreement to be pledged to the Pledgee on the date hereof (or the respective Subsequent Effective Date).

3. PLEDGE OF SECURITIES, ETC.

3.1 Pledge. To secure the Applicable Obligations of such Pledgor and for the purposes set forth in Section 1, each Pledgor does hereby grant, pledge and assign to the Pledgee for the benefit of the relevant Secured Creditors, and does hereby create a continuing security interest in favor of the Pledgee for the benefit of the relevant Secured Creditors in, all of the right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the “Collateral”):

     (i) each of the Collateral Accounts, including any and all assets of whatever type or kind deposited by such Pledgor in such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, moneys, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing;

     (ii) all Securities owned by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities;

     (iii) all Limited Liability Company Interests owned by such Pledgor from time to time and all of such Pledgor’s right, title and interest in each limited liability company to which such interests relate, whether now existing or hereafter acquired, including, without limitation:

     (1) all the capital thereof and its interest in all profits, income, surpluses, losses, Limited Liability Company Assets, distributions and other payments to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests;

     (2) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability

company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;

     (3) all of its claims, rights, powers, privileges, authority, options, security interest, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests;

     (4) all present and future claims, if any, of any of such Pledgor against any such Pledged LLC for moneys loaned or advanced, for services rendered or otherwise;

     (5) all of such Pledgor’s rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of any of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Limited Liability Company Interest and any such Pledged LLC, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing (with all of the foregoing rights to be exercisable only upon the occurrence and during the continuation of a Noticed Event of Default); and

     (6) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

     (iv) all Partnership Interests owned by such Pledgor from time to time and all of such Pledgor’s right, title and interest in each partnership to which such interests relate, whether now existing or hereafter acquired, including, without limitation:

     (1) all of the capital thereof and its interest in all profits, income, surplus, losses, Partnership Assets, distributions and other payments to which such Pledgor shall at any time be entitled in respect of any such Partnership Interest;

     (2) all other payments due or to become due to such Pledgor in respect of any such Partnership Interest, whether under any partnership agreement or

otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;

     (3) all of its claims, rights, powers, privileges, authority, options, security interest, liens and remedies, if any, under any partnership or other agreement or at law or otherwise in respect of any such Partnership Interest;

     (4) all present and future claims, if any, of such Pledgor against any Pledged Partnership for moneys loaned or advanced, for services rendered or otherwise;

     (5) all of such Pledgor’s rights under any partnership agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to any Partnership Interest, including any power, if any, to terminate, cancel or modify any general or limited partnership agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Partnership Interest and any Pledged Partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect, or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing (with all of the foregoing rights to be exercisable only upon the occurrence and during the continuation of a Noticed Event of Default);

     (6) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

     (v) all Financial Assets and Investment Property owned by such Pledgor from time to time;

     (vi) in the case of the Borrower, the RJRTH Intercompany Note and all rights of the Borrower hereunder in its capacity as the RJRTH Intercompany Note Creditor (including all rights to receive proceeds from any sale or other disposition of the capital stock of Reynolds Tobacco pledged to secure RJRTH Intercompany Note Obligations);

     (vii) all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; and

     (viii) all Proceeds of any and all of the foregoing.

; provided that, notwithstanding the foregoing, (1) the Collateral that secures the Existing Senior Notes Obligations of a Specified Existing Senior Notes Pledgor shall be limited to Designated Existing Senior Notes Collateral owned by such Specified Existing Senior Notes Pledgor, all of

which Collateral shall also ratably secure all other Applicable Obligations of such Specified Existing Senior Notes Pledgor, and the Collateral Proceeds with respect to any item of Collateral owned by a Specified Existing Senior Notes Pledgor that are to be applied to the Existing Senior Notes Obligations shall be limited to Collateral Proceeds resulting from the sale, other disposition of or other realization upon, and other moneys received in respect of, the Designated Existing Senior Notes Collateral of such Specified Existing Senior Notes Pledgor, with such Collateral Proceeds to also be applied ratably to all other Applicable Obligations of such Specified Existing Senior Notes Pledgor, (2) the Collateral that secures the RAI Senior Notes Obligations of a Specified RAI Senior Notes Pledgor shall be limited to Designated RAI Senior Notes Collateral owned by such Specified RAI Senior Notes Pledgor, all of which Collateral shall also ratably secure all other Applicable Obligations of such Specified RAI Senior Notes Pledgor, and the Collateral Proceeds with respect to any item of Collateral owned by a Specified RAI Senior Notes Pledgor that are to be applied to the RAI Senior Notes Obligations shall be limited to Collateral Proceeds resulting from the sale, other disposition of or other realization upon, and other moneys received in respect of, the Designated RAI Senior Notes Collateral of such Specified RAI Senior Notes Pledgor, with such Collateral Proceeds to also be applied ratably to all other Applicable Obligations of such Specified RAI Senior Notes Pledgor, (3) the Collateral that secures the RJRTH Intercompany Note Obligations of RJRTH shall be limited to the capital stock of Reynolds Tobacco owned by RJRTH, and the Collateral Proceeds with respect to the capital stock of Reynolds Tobacco owned by RJRTH that are to be applied to the RJRTH Intercompany Note Obligations shall be limited to Collateral Proceeds from the sale, other disposition of or other realization upon, and other moneys received in respect of, such capital stock of Reynolds Tobacco, (4) prior to (but not after) the time RJRTH becomes a Specified RAI Senior Notes Pledgor, the capital stock of Reynolds Tobacco shall not secure any Obligations other than the RJRTH Intercompany Note Obligations, (5) at any time prior to the exchange of at least 51% in aggregate principal amount of each series of Existing Senior Notes for Exchange Senior Notes as contemplated by the definition of “Exchange Senior Notes” in the Credit Agreement (and the elimination of the lien covenant in the Existing Senior Notes Indenture as consented to by the requisite holders of the Existing Senior Notes), the term “Collateral” as used herein shall not include any indebtedness or other obligations owing by a Subsidiary of RJRTH to RJRTH or any of its Subsidiaries, (6) at any time on and after RJRTH becomes a Specified RAI Senior Notes Pledgor, the capital stock of Reynolds Tobacco owned by RJRTH shall cease to secure the RJRTH Intercompany Note Obligations, and (7) in the case of any sale, assignment, transfer or grant of a security interest hereunder by a Restricted Pledgor only, the term “Collateral” shall not include any Collateral (determined as provided herein without regard to this clause (7)) of such Restricted Pledgor other than (x) Collateral of the type described in clause (i) of Section 3.1 and (y) all other Collateral of the type which may be perfected by the filling of a UCC-1 financing statement in any relevant jurisdiction.

          3.2. Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions for the benefit of the Pledgee and the other relevant Secured Creditors as set forth below as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral, provided that, notwithstanding the foregoing, (i) in the case of Collateral consisting of an Uncertificated Security, Limited Liability Company

Interest or Partnership Interest of a Person which is not a Subsidiary of such Pledgor and a security interest in which is to be perfected by taking an action specified in sub-clause (ii) or (iv)(2) below, such Pledgor shall have 30 days after it obtains such Collateral to take the respective action required by said sub-clause, (ii) in the case of Collateral a security interest in which is to be perfected by taking an action specified in sub-clause (iii) below, such Pledgor shall have 90 days after the Fourth Restatement Effective Date (or, if such Collateral is acquired after the Fourth Restatement Effective Date, the date it obtains such Collateral) to take the respective action required by said sub-clause, (iii) in the case of any Security, Stock, Limited Liability Company Interest or Partnership Interest of an Excluded Foreign Entity, such Pledgor owning the same shall only be required to take the respective action specified below on the date such Excluded Foreign Entity ceases to qualify as an “Excluded Foreign Entity” in accordance with the definition thereof and (iv) in the case of any Security, Stock, Limited Liability Company Interest or Partnership Interest of any Domestic Subsidiary of the Borrower which is not (or is not required pursuant to the terms of the Credit Agreement to be) a Credit Party owned by such Pledgor, such Pledgor shall not be required (until such time, if any, as such Subsidiary shall become a Credit Party) to take any of the actions specified in clause (i), (ii), (iii) or (iv) below, so long as such Pledgor has taken all actions required by Section 3.2(b)(ii) below with respect to such Collateral:

     (i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall deliver such Certificated Security to the Pledgee, indorsed to the Pledgee or indorsed in blank;

     (ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall cause the issuer of such Uncertificated Security (or, in the case of an issuer that is not a Subsidiary of such Pledgor, will use reasonable efforts to cause such issuer) to duly authorize and execute, and deliver to the Pledgee, an agreement for the benefit of the Pledgee and the other relevant Unrestricted Secured Creditors substantially in the form of Annex F hereto (appropriately completed to the reasonable satisfaction of the Pledgee and with such modifications, if any, as shall be reasonably satisfactory to the Pledgee) pursuant to which, subject to Section 5 hereof, such issuer agrees to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interest and Limited Liability Company Interest issued by such issuer) originated by any other Person other than a court of competent jurisdiction; provided that in the case of an Uncertificated Security issued by a Person that is organized under the laws of a jurisdiction other than the United States or any state thereof, such Pledgor shall enter into a Foreign Pledge Agreement and comply with the requirements of Section 16(d) as if said Person had been (but then ceased to be) an Excluded Foreign Entity,

     (iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), the respective Pledgor shall promptly notify the Pledgee thereof and shall promptly take (x) all actions required (i) to comply with the applicable rules of such Clearing Corporation and (ii) to perfect the security interest of the Pledgee

under applicable law (including, in any event, under Sections 9-314(a) and (b), 9-106 and 8-106(d) of the UCC) and (y) such other actions as the Pledgee deems reasonably necessary or desirable to effect the foregoing;

     (iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Interest credited on the books of a Clearing Corporation), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii) hereof;

     (v) with respect to any Note, delivery of such Note to the Pledgee, indorsed to the Pledgee or indorsed in blank; and

     (vi) with respect to cash proceeds, (i) establishment by the Pledgee of a cash account in the name of such Pledgor over which the Pledgee shall have exclusive and absolute control and dominion (and no withdrawals or transfers may be made therefrom by any Person except with the prior written consent of the Pledgee) and (ii) deposit of such cash in such cash account.

          (b) In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Collateral:

     (i) with respect to all Collateral of such Pledgor whereby or with respect to which the Pledgee may obtain “control” thereof within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), the respective Pledgor shall take all actions as may be reasonably requested from time to time by the Pledgee so that “control” of such Collateral is obtained and at all times held by the Pledgee; and

     (ii) each Pledgor shall from time to time cause appropriate financing statements (on Form UCC-1 or other appropriate form) under the Uniform Commercial Code as in effect in the various relevant States, covering all Collateral hereunder (with the form of such financing statements to be satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee has a security interest in all Investment Property and other Collateral which is perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-312(a) of the UCC).

          3.3. Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend or similar distribution or otherwise) any additional Collateral at any time or from time to time after the date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, the respective Pledgor will promptly thereafter take (or

cause to be taken) all action with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Pledgee (i) a certificate executed by a principal executive officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the relevant Unrestricted Secured Creditors entitled thereto) hereunder and (ii) supplements to Annexes A through E hereto as are reasonably necessary to cause such annexes to be complete and accurate at such time, provided that unless specifically requested by the Collateral Agent, such updated Annexes shall not be required to include any after-acquired Securities pledged to the Pledgee pursuant to the procedures set forth in Section 3.2(a)(iii). Notwithstanding the foregoing, no Pledgor shall be required at any time to pledge hereunder any Stock which will result in more than 65% of the total combined voting power of all classes of capital stock of any Foreign Corporation entitled to vote being pledged hereunder.

3.4. Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral.

4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank or, following a Noticed Event of Default which is continuing, in favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee.

5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until a Noticed Event of Default shall have occurred and be continuing, each Pledgor shall be entitled to exercise all voting rights attaching to any and all Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that no vote shall be cast or any consent, waiver or ratification given or any action taken which would violate, result in breach of any covenant contained in, or be inconsistent with, any of the terms of this Agreement, the Credit Agreement, any other Credit Document, any Existing Senior Notes Document, any New Senior Notes Document, any Refinancing Senior Notes Document, any Secured Credit Agreement or any Secured Hedging Agreement (collectively, the “Secured Debt Agreements”), or which would have the effect of impairing in any material respect the value of the Collateral or any material part thereof or impairing the position or interests of the Pledgee or any other Secured Creditor therein, provided however, each Pledgor shall be permitted to amend and/or modify intercompany notes constituting Collateral in the ordinary course of business and consistent with past practices. All such rights of a Pledgor to vote and to give consents, waivers and ratifications shall cease in case a Noticed Event of Default shall occur and be continuing and Section 7 hereof shall become applicable. As used herein, a “Noticed Event of Default” shall mean (i) an Event of Default with respect to a Credit Party under Section 9.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Pledgee has given the Borrower notice that such Event of Default constitutes a “Noticed Event of Default”.

6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until a Noticed Event of Default shall have occurred and be continuing, all cash dividends, distributions, cash Proceeds or other amounts payable in respect of the Collateral shall be paid to the respective Pledgor; provided that

all dividends or other amounts payable in respect of the Collateral which are determined by the Pledgee, to represent in whole or in part an extraordinary, liquidating or other distribution in return of capital not permitted by the Credit Agreement shall be paid, to the extent so determined to represent an extraordinary, liquidating or other distribution in return of capital, to the Pledgee and retained by it as part of the Collateral (unless such cash dividends are applied to repay the Obligations pursuant to Section 9 of this Agreement). The Pledgee shall also be entitled to receive directly, and to retain as part of the Collateral:

     (i) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (other than cash) paid or distributed by way of dividend or otherwise in respect of the Collateral;

     (ii) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including cash) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and

     (iii) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate, partnership or other reorganization.

Nothing contained in this Section 6 shall limit or restrict in any way the Pledgee’s right to receive proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All dividends, distributions or other payments which are received by the respective Pledgor contrary to the provisions of this Section 6 or Section 7 shall be received in trust for the benefit of the Pledgee and shall be forthwith paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement).

7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. In case a Noticed Event of Default shall have occurred and be continuing, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement or by any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, including, without limitation, all the rights and remedies of a secured party upon default under the Uniform Commercial Code as in effect in any relevant jurisdiction, and the Pledgee shall be entitled, without limitation, to exercise any or all of the following rights, which each Pledgor hereby agrees to be commercially reasonable:

     (i) to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 to such Pledgor;

     (ii) to transfer all or any part of the Collateral into the Pledgee’s name or the name of its nominee or nominees;

     (iii) to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon);

     (iv) to vote all or any part of the Collateral (in each case whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so);

     (v) at any time or from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance or advertisement or to redeem or otherwise (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Pledgee in its reasonable discretion may determine, provided that at least 10 days’ notice of the time and place of any such sale shall be given to such Pledgor. The Pledgee shall not be obligated to make such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each purchaser at any such sale shall hold the property so sold absolutely free from any claim or right on the part of any Pledgor, and each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of all Secured Creditors (or certain of them) may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Pledgee nor any other Unrestricted Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall it be under any obligation to take any action whatsoever with regard thereto; and

     (vi) to set-off any and all Collateral against any and all Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations.

8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the Pledgee provided for in this Agreement or any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. Unless otherwise required by the Credit Documents, no notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar other circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured Creditor to any other further action in any circumstances without demand or notice. By accepting the benefits of this Agreement, the Secured Creditors expressly acknowledge and agree that (x) this Agreement may be enforced only by the action of

the Pledgee acting upon the instructions of the Required Lenders or, if the CA Termination Date has occurred, the holders of a majority of the outstanding principal amount of all remaining Obligations, provided that if prior to the CA Termination Date a payment default with respect to at least $300,000,000 principal amount in the aggregate of Existing Senior Notes, New Senior Notes and/or Refinancing Senior Notes has continued for at least 180 days (and such defaulted payment has not been received pursuant to a drawing under any letter of credit), the holders of a majority of the outstanding principal amount of the Indebtedness subject to such payment default or defaults can direct the Pledgee to commence and continue enforcement of the Liens created hereunder, which the Pledgee shall comply with subject to receiving any indemnity which it reasonably requests, provided further that the Pledgee shall thereafter comply only with the directions of the Required Lenders as to how to carry out such enforcement so long as such directions are not adverse to the aforesaid directions of the holders of Indebtedness subject to such payment default or defaults and (y) no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies shall be exercised exclusively by the Pledgee for the benefit of the Secured Creditors as their interests may appear upon the terms of this Agreement.

9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee upon any sale, other disposition of or other realization upon any Collateral pursuant to the terms of this Agreement, together with all other moneys received by the Pledgee hereunder (collectively, the “Collateral Proceeds”), shall be applied (subject to the payment rules set forth more specifically in Section 9(c) below) as follows:

     (i) first, to the payment of all Obligations owing to the Pledgee of the type described in clauses (viii), (ix) and (x) of Section 1 herein;

     (ii) second, to the extent proceeds of the sale, other disposition of or other realization upon any item of Collateral remain after the application pursuant to preceding clause (i), an amount equal to the outstanding Applicable Obligations secured by such item of Collateral shall be paid to the Secured Creditors as their interests may appear, with (x) each Secured Creditor receiving an amount equal to its outstanding Applicable Obligations secured by such item of Collateral or, if the proceeds are insufficient to pay in full all such Applicable Obligations, its Pro Rata Share of the amount so remaining to be distributed and (y) in the case of the Credit Document Obligations, the Existing Senior Notes Obligations, the New Senior Notes Obligations, the Refinancing Senior Notes Obligations and the RJRTH Intercompany Note Obligations included in such Applicable Obligations, any such amount to be applied (1) first to the payment of interest in respect of the unpaid principal amount of Loans, Existing Senior Notes, New Senior Notes, Refinancing Senior Notes or the RJRTH Intercompany Note, as the case may be, (2) second to the payment of principal of Loans, Existing Senior Notes, New Senior Notes, Refinancing Senior Notes or the RJRTH Intercompany Note, as the case may be, and (3) third to the other Credit Document Obligations, Existing Senior Notes Obligations, New Senior Notes Obligations, Refinancing Senior Notes Obligations or RJRTH Intercompany Note Obligations, as the case may be; and

     (iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), to the relevant Pledgor or, to the extent directed by such Pledgor or a court of competent jurisdiction, to whomever may be lawfully entitled to receive such surplus.

(b) For purposes of this Agreement, “Pro Rata Share” shall mean when calculating a Secured Creditor’s portion of any distribution or amount pursuant to clause (a) above, the amount (expressed as a percentage) equal to a fraction the numerator of which is the then outstanding amount of the relevant Applicable Obligations secured by the relevant item of Collateral owed such Secured Creditor and the denominator of which is the then outstanding amount of all Applicable Obligations secured by the relevant item of Collateral.

(c) All payments required to be made to (i) the Lender Creditors hereunder shall be made to the Administrative Agent for the account of the respective Lender Creditors, (ii) the Credit Card Issuers hereunder shall be made to the Credit Card Issuer(s) under the applicable Secured Credit Card Agreement, (iii) the Hedging Creditors hereunder shall be made to the paying agent under the applicable Secured Hedging Agreement or, in the case of Secured Hedging Agreements without a paying agent, directly to the applicable Hedging Creditors, (iv) the Existing Senior Notes Creditors hereunder shall be made to the Existing Senior Notes Trustee for the account of the respective Existing Senior Notes Creditors, (v) the New Senior Notes Creditors hereunder shall be made to the New Senior Notes Trustee for the account of the respective New Senior Notes Creditors, (vi) the Refinancing Senior Notes Creditors hereunder shall be made to the Refinancing Senior Notes Trustee for the account of the respective Refinancing Senior Notes Creditors and (vii) the RJRTH Intercompany Note Creditor hereunder shall be made to the other Secured Creditors as otherwise provided above in Section 9(a)(ii) (for purposes of such Section, treating amounts which would (in the absence of the pledge by the Borrower of the Collateral described in clause (vi) of Section 3.1) be paid to the RJRTH Intercompany Note Creditor as Collateral pledged to secure the Applicable Obligations of such other Secured Creditors) (or, in the circumstances contemplated by Section 9(a)(iii), to the RJRTH Intercompany Note Creditor).

(d) For purposes of applying payments received in accordance with this Section 9, the Pledgee shall be entitled to rely upon (i) the Administrative Agent for a determination of the outstanding Credit Document Obligations, (ii) any Credit Card Issuer for a determination of the outstanding Credit Card Obligations owed to such Credit Card Issuer, (iii) any Hedging Creditor for a determination of the outstanding Hedging Obligations owed to such Hedging Creditor, (iv) the Existing Senior Notes Trustee for a determination of the outstanding Existing Senior Notes Obligations, (v) the New Senior Notes Trustee for a determination of the outstanding New Senior Notes Obligations, (vi) the Refinancing Senior Notes Trustee for a determination of the outstanding Refinancing Senior Notes Obligations and (vii) the RJRTH Intercompany Note Creditor for a determination of the outstanding RJRTH Intercompany Note Obligations. Unless it has actual knowledge (including by way of written notice from a Secured Creditor) to the contrary, the Administrative Agent under the Credit Agreement, in furnishing information pursuant to the preceding sentence, and the Pledgee, in acting hereunder, shall be entitled to assume that no Credit Document Obligations other than principal, interest and regularly accruing fees are owing to any Lender Creditor.

(e) It is understood and agreed that each Pledgor shall remain liable to the extent of any deficiency between (x) the amount of the Obligations for which it is responsible directly or as a Guarantor that are satisfied with proceeds of the Collateral and (y) the aggregate outstanding amount of such Obligations.

10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof.

11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify and hold harmless the Pledgee and each other Unrestricted Secured Creditor and their respective successors, assigns, employees, agents and affiliates (individually, an “Indemnitee,” and collectively the “Indemnitees”) from and against any and all claims, demands, losses, judgments and liabilities (including liabilities for penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee for all reasonable costs and expenses, including reasonable attorneys’ fees, in each case growing out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding any claims, demands, losses, judgments and liabilities or expenses to the extent incurred by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision)). In no event shall the Pledgee be liable, in the absence of gross negligence or willful misconduct on its part, for any matter or thing in connection with this Agreement other than to account for moneys or other property actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

12. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to make the Pledgee or any other Unrestricted Secured Creditor liable as a general partner or limited partner of any Pledged Partnership or a member of any Pledged LLC and the Pledgee or any other Unrestricted Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall not have any of the duties, obligations or liabilities of a general partner or limited partner of any Pledged Partnership or a member of any Pledged LLC. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of the respective Pledged Partnership Interest, Pledged Limited Liability Company Interest or Security pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Unrestricted Secured Creditor and/or any Pledgor.

(b) Except as provided in the last sentence of paragraph (a) of this Section, the Pledgee, by accepting this Agreement, did not intend to become a general partner or limited partner of any Pledged Partnership or a member of any Pledged LLC or otherwise be deemed to be a co-venturer with respect to any Pledgor, any Pledged Partnership or any Pledged LLC., either before or after an Event of Default shall have occurred. The Pledgee shall have only those powers set

forth herein and shall assume none of the duties, obligations or liabilities of a general partner or limited partner of any Pledged Partnership or a member of any Pledged LLC or of any Pledgor.

(c) Neither the Pledgee nor any other Unrestricted Secured Creditor shall be obligated to perform or discharge any obligation of any Pledgor as a result of the collateral assignment hereby effected.

(d) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral.

13. FURTHER ASSURANCES. (a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgor’s own expense, file and refile under the Uniform Commercial Code such financing statements, continuation statements and other documents in such offices as the Pledgee may reasonably deem necessary or appropriate and wherever required or permitted by law in order to perfect and preserve the Pledgee’s security interest in the Collateral hereunder and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Pledgee such additional conveyances, assignments, agreements and instruments as the Pledgee may reasonably require or reasonably deem advisable to carry into effect the purposes of this Agreement or to further assure and confirm unto the Pledgee its rights, powers and remedies hereunder or thereunder.

(b) Each Pledgor hereby appoints the Pledgee, such Pledgor’s attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time after the occurrence and during the continuance of an Event of Default, in the Pledgee’s reasonable discretion to take any action and to execute any instrument which the Pledgee may reasonably deem necessary or advisable to accomplish the purposes of this Agreement.

14. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Annex M to the Security Agreement, the terms of which shall be deemed incorporated herein by reference as fully as if same were set forth herein in their entirety (for such purpose, treating each reference to the “Security Agreement” as a reference to this Agreement, each reference to the “Collateral Agent” as a reference to the Pledgee, each reference to an “Assignor” as a reference to a “Pledgor” and each reference to a “Secured Creditor” and a “Secured Debt Agreement” as a reference to a “Secured Creditor” or a “Secured Debt Agreement”, as the case may be, as defined herein).

15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein if prohibited by the terms of this Agreement or any other Secured Debt Agreement.

16. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS. (a) Each Pledgor represents, warrants and covenants that:

     (i) it is the legal, record and beneficial owner of, and has good and marketable title to, all Collateral consisting of one or more Securities pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation, security interest, charge, option or other encumbrance whatsoever, except the liens and security interests created by this Agreement and Permitted Liens;

     (ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement without the consent of any other Person;

     (iii) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable in accordance with its terms, except to the extent that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or law);

     (iv) except to the extent already made or obtained, no consent of any other party (including, without limitation, any stockholder, member, limited or general partner or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement, (b) the validity or enforceability of this Agreement, (c) the perfection or enforceability of the Pledgee’s security interest in the Collateral (other than with respect to the Equity Interests of an Excluded Foreign Entity) or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein;

     (v) neither the execution, delivery or performance of this Agreement or any other Secured Debt Agreement to which it is a party violates (a) any material provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or domestic or foreign governmental authority, (b) the certificate of incorporation, certificate of formation, certificate of partnership, partnership agreement, limited liability company agreement (or equivalent organizational documents) or by-laws, as the case may be, of such Pledgor or of any securities issued by such Pledgor or any of its Subsidiaries, or (c) any indenture, mortgage, lease, deed of trust, credit agreement, loan agreement, agreement or other instrument to which such Pledgor or any of its Subsidiaries is a party or which purports to be binding upon such Pledgor or any of its Subsidiaries or upon any of their respective assets and will not result in the creation or

imposition of any lien or encumbrance on any of the assets of such Pledgor or any of its Subsidiaries except as contemplated by this Agreement;

     (vi) all the Collateral consisting of Securities, Pledged Limited Liability Company Interests and Pledged Partnership Interests have been duly and validly issued, are fully paid and non-assessable and are subject to no options to purchase or similar rights;

     (vii) to Pledgor’s knowledge, each of the Pledged Notes constitute, or, when executed by the obligor thereof, will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or law);

     (viii) the pledge, assignment and delivery to the Pledgee of the Collateral consisting of Certificated Securities (other than the Certificated Securities (x) of the Excluded Foreign Entities and (y) required to be pledged pursuant to the procedures set forth in Section 3.2(a)(iii)) and Pledged Notes pursuant to this Agreement, creates a valid and perfected first security interest in such Collateral and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities;

     (ix) it is not in default in the payment of any portion of any mandatory capital contribution, if any, required to be made under any partnership agreement or limited liability company agreement to which such Pledgor is a party, and such Pledgor is not in violation of any other material provisions of any partnership agreement or limited liability company agreement to which such Pledgor is a party, or otherwise in default or violation thereunder; no Partnership Interest or Limited Liability Company Interest is subject to any defense, offset or counterclaim, nor have any of the foregoing been asserted or alleged against such Pledgor by any Person with respect thereto;

     (x) it shall not withdraw as a partner of any Pledged Partnership or member of any Pledged LLC, or file or pursue or take any action which may, directly or indirectly, cause a dissolution or liquidation of or with respect to any Pledged Entity or seek a partition of any property of any Pledged Entity, except as permitted by the Credit Agreement;

     (xi) the Pledged Partnership Interests or Pledged Limited Liability Company Interests of such Pledgor, as the case may be, constitute, and will at all times hereafter continue to constitute, in the aggregate, all of the partnership interests or membership interests, as the case may be, of each Pledged Entity of such Pledgor and no Pledged Entity shall create any options or rights or other agreements to sell or otherwise transfer, or sell or otherwise transfer, any Partnership Interests or Limited Liability Company Interests;

     (xii) each partnership agreement and limited liability company agreement is the legal, valid and binding obligation of the parties thereto, enforceable in accordance with its terms and, together with this Agreement, contains the entire agreement between the parties thereto relating to the subject matter thereof; and

     (xiii) “control” (as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over all Collateral consisting of Securities (including Notes which are Securities) with respect to which such “control” may be obtained pursuant to Section 8-106 of the UCC, in each such case to the extent required by the terms of this Agreement.

(b) Each Pledgor covenants and agrees that it will defend the Pledgee’s right, title and security interest in and to the Securities and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Pledgee as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Pledgee and the other Secured Creditors.

(c) Each Pledgor covenants and agrees that it will take no action which would violate or be inconsistent with any of the terms of any Secured Debt Agreement, or which would have the effect of impairing the position or interests of the Pledgee or any other Secured Creditor under any Secured Debt Agreement except as permitted by the Credit Agreement.

(d) Any Pledgor which owns an equity interest in an Excluded Foreign Entity covenants and agrees that on the date on which such entity ceases to qualify as an “Excluded Foreign Entity” in accordance with the definition thereof, (i) such Pledgor shall have duly authorized, executed and delivered to the Pledgee a pledge agreement, in form and substance satisfactory to the Pledgee, governed by the laws of the jurisdiction of organization of such Excluded Foreign Entity and covering (subject to the pledge limitations in subclause (ii) of the definition of the term “Stock”) the equity interests of such Excluded Foreign Entity owned by such Pledgor (as amended, restated, modified and/or supplemented from time to time in accordance with the terms thereof and of the Credit Agreement, each such pledge agreement, a “Foreign Pledge Agreement”), (ii) such Foreign Pledge Agreement shall be in full force and effect and shall have been duly recorded or filed in such manner and in such places as required by the law of the jurisdiction governing such Foreign Pledge Agreement to establish, perfect, preserve and protect the pledge in favor of the Collateral Agent, (iii) all taxes, fees and other charges payable in connection with the such Foreign Pledge Agreement (including the recordation thereof) shall have been paid in full and (iv) the Pledgee shall have received such other evidence that all actions necessary or, in the opinion of the Pledgee, desirable, to perfect and/or render enforceable the security interest purported to be created by such Foreign Pledge Agreement have been taken (including, without limitation, the delivery of an opinion from local counsel acceptable to the Pledgee in form, scope and substance reasonably satisfactory to the Pledgee).

(e) Each Pledgor represents and warrants as of the date of each Credit Event under the Credit Agreement, that the fair market value of the Margin Stock held by the Pledgors as of the date of such Credit Event does not exceed $50,000,000.

17. PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation:

     (i) any renewal, extension, amendment or modification of, or addition or supplement to or deletion from any of the Secured Debt Agreements, or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof;

     (ii) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument or this Agreement;

     (iii) any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee;

     (iv) any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or

     (v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Pledgor or any Subsidiary of such Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.

18. TERMINATION; RELEASE. (a) After the Termination Date (as defined below), this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination) and the Pledgee, at the request and expense of the respective Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement as provided above, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Pledgee and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Pledgee hereunder. As used in this Agreement, (i) “CA Termination Date” shall mean the date upon which the Total Commitment has been terminated, no Letter of Credit or Note under the Credit Agreement is outstanding and all other Credit Document Obligations have been paid in full in cash (other than arising from indemnities for which no request for payment has been made) and (ii) “Termination Date” shall mean the date upon which (x) the CA Termination Date shall have occurred and (y) if (but only if) a Notified Non-Credit Agreement Event of Default shall have occurred and be continuing on the CA Termination Date (and after giving effect thereto), either (I) such Notified Non-Credit Agreement Event of Default shall have been cured or waived by the requisite holders of the relevant Obligations subject to such Notified Non-Credit Agreement Event of Default or (II) all Secured Credit Card Agreements and Secured Hedging Agreements (if any) giving rise to a Notified Non-Credit Agreement Event of Default shall have been terminated and all Obligations subject to such Notified Non-Credit Agreement Event of Default shall have been paid in full (other than arising from indemnities for which no request for payment has been made).

(b) So long as no Notified Non-Credit Agreement Event of Default has occurred and is continuing, in the event that (x) prior to the CA Termination Date (i) any part of the Collateral is sold or otherwise disposed of in connection with a sale or other disposition permitted by Section 8.02 of the Credit Agreement (it being agreed for such purposes that a release will be deemed “permitted by Section 8.02 of the Credit Agreement” if the proposed transaction constitutes an exception to Section 8.02 of the Credit Agreement) or (ii) all or any part of the Collateral is released at the direction of the Required Lenders (or all the Lenders if required by Section 12.12 of the Credit Agreement), and the proceeds of such sale or disposition or from such release (if any) are applied in accordance with the terms of the Credit Agreement to the extent required to be so applied or (y) on and after the CA Termination Date, any part of the Collateral is sold or otherwise disposed of without violating the Existing Senior Notes Documents, the New Senior Notes Documents, the Refinancing Senior Notes Documents, the Secured Credit Card Agreements and the Secured Hedging Agreements, the Pledgee, at the request and expense of the respective Pledgor will release such Collateral from this Agreement, duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in possession of the Pledgee and has not theretofore been released pursuant to this Agreement (it being understood and agreed that upon the release of all or any portion of the Collateral by the Collateral Agent at the direction of the Lenders as provided above, the Lien on the Collateral in favor of the Collateral Agent for the benefit of the Credit Card Issuer, the Hedging Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors, the Refinancing Senior Notes Creditors and the RJRTH Intercompany Note Creditor shall automatically be released).

(c) In addition to the foregoing, all Collateral shall be automatically released (subject to reinstatement upon the occurrence of a new Trigger Event, with each date of such reinstatement, a “Subsequent Effective Date”) in accordance with Section 7.10(i) of the Credit Agreement.

(d) At any time that the relevant Pledgor desires that the Pledgee take any action to give effect to any release of Collateral pursuant to the foregoing Section 18(a), (b) or (c), it shall deliver to the Pledgee a certificate signed by an authorized officer describing the Collateral to be released and certifying its entitlement to a release pursuant to the applicable provisions of Sections 18(a), (b) or (c) and in such case the Pledgee, at the request and expense of such Pledgor, will execute such documents as required to duly release such Collateral and to assign, transfer and deliver to such Pledgor or its designee (without recourse and without any representation or warranty) such of the Collateral as is then being released and as may be in the possession of the Pledgee. The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with (or which the Pledgee in good faith believes to be in accordance with) this Section 18. Upon any release of Collateral pursuant to Section 18(a), (b) or (c), so long as no Noticed Event of Default is then in existence, none of the Secured Creditors shall have any continuing right or interest in such Collateral, or the proceeds thereof (subject to reinstatement rights upon the occurrence of a new Trigger Event in the case of a release pursuant to Section 18(c)).

19. NOTICES, ETC. All notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile transmission or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered (including by way of overnight courier):

     (i) if to any Pledgor, at its address set forth opposite its signature below;

     (ii) if to the Pledgee, at:

JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, New York 10017
Attention: Raju Nanoo
Tel: 212-270-2272
Fax: 212-270-5120

     (iii) if to any Lender (other than the Pledgee), at such address as such Lender shall have specified in the Credit Agreement;

     (iv) if to any Credit Card Issuer, at such address as such Credit Card Issuer shall have specified in writing to the Pledgors and the Pledgee;

     (v) if to any Hedging Creditor, at such address as such Hedging Creditor shall have specified in writing to the Pledgors and the Pledgee;

     (vi) if to any Existing Senior Notes Creditor, at such address of the Existing Senior Notes Trustee as the Existing Senior Notes Trustee shall have specified in writing to the Pledgors and the Pledgee;

     (vii) if to any New Senior Notes Creditor, at such address of the New Senior Notes Trustee as the New Senior Notes Trustee shall have specified in writing to the Pledgors and the Pledgee;

     (viii) if to any Refinancing Senior Notes Creditor, at such address of the Refinancing Senior Notes Trustee as the Refinancing Senior Notes Trustee shall have specified in writing to the Pledgors and the Pledgee;

or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. Except as otherwise expressly provided herein, all such notices and communications shall be deemed to have been duly given or made when received.

20. WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Pledgee (with the consent of (x) if prior to the CA Termination Date, the Required Lenders or, to the extent required by Section 12.12 of the Credit Agreement, all of the Lenders and (y) if on and after the CA Termination Date, the holders of at least a majority of the outstanding principal amount of the Obligations remaining outstanding), and each Pledgor affected thereby (it being understood that the addition or release of any Pledgor hereunder shall not constitute a change, waiver, discharge or variance affecting any Pledgor other than the Borrower and the Pledgor so added or released), provided that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Unrestricted Secured Creditors (and not all Unrestricted Secured Creditors in a like or similar manner) shall require the written consent of

the Requisite Creditors of such Class of Unrestricted Secured Creditors; provided, however, that technical modifications may be made to this Agreement without the consent of a given Class of Unrestricted Secured Creditors affected thereby if such modifications are intended to conform the Collateral pledge requirements of this Agreement with the pledge requirements of the relevant Secured Debt Agreements to which such Class of Unrestricted Secured Creditors is a party. For the purpose of this Agreement, the term “Class” shall mean each class of Unrestricted Secured Creditors, i.e., whether (1) the Lender Creditors as holders of the Credit Document Obligations, (2) the Credit Card Issuers as holders of the Credit Card Obligations, (3) the Hedging Creditors as holders of the Hedging Obligations, (4) the Existing Senior Notes Creditors as holders of the Existing Senior Notes Obligations, (5) the New Senior Notes Creditors as holders of the New Senior Notes Obligations or (6) the Refinancing Senior Notes Creditors as holders of the Refinancing Senior Notes Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of any Class shall mean each of (1) with respect to each of the Credit Document Obligations, the Required Lenders, (2) with respect to the Credit Card Obligations, the holders of at least a majority of all Credit Card Obligations outstanding from time to time, (3) with respect to the Hedging Obligations, the holders of at least a majority of all Hedging Obligations outstanding from time to time, (4) with respect to the Existing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Existing Senior Notes, (5) with respect to the New Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the New Senior Notes and (6) with respect to the Refinancing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Refinancing Senior Notes.

21. MISCELLANEOUS. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 18, (ii) be binding upon each Pledgor, its successors and assigns, and (iii) inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the Pledgee, the other Secured Creditors and their respective successors, transferees and assigns. This Agreement shall be construed and enforced in accordance with and governed by the law of the State of New York. The headings of the several sections and subsections in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto.

22. WAIVER OF JURY TRIAL. Each party hereto irrevocably waives all right to a trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement or the transactions contemplated hereby.

23. ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of the Borrower that is required to become a party to this Agreement after the date hereof pursuant to the requirements of the Credit Agreement shall become a Pledgor hereunder by (x) executing a counterpart hereof and/or an assumption agreement in form and substance satisfactory to the Collateral Agent, (y) delivering supplements to Annexes A through E hereto, as are necessary to cause such Annexes to be complete and accurate with respect to such additional Pledgor on such date and (z) taking all actions as specified in this Agreement, in each case with all documents

required above to be delivered to the Collateral Agent and with all documents and action required above to be taken to the reasonable satisfaction of the Collateral Agent.

24. NO THIRD PARTY BENEFICIARIES. This Agreement is entered into solely for the benefit of the parties hereto and their respective successors and assigns and for the benefit of the Secured Creditors from time to time and their respective successors and assigns and, except for the Secured Creditors and their successors and assigns, there shall be no third party beneficiaries hereof, nor shall any Person other than the parties hereto and their respective successors and assigns, and the Secured Creditors and their respective successors and assigns, be entitled to enforce the provisions hereof or have any claims against any party hereto (or any Secured Creditor) or their successors and assigns arising from, or under, this Agreement.

25. SPECIAL PROVISIONS AND WAIVERS RELATING TO THE RJRTH INTERCOMPANY NOTE CREDITOR.

(a) In the event that the RJRTH Intercompany Note Creditor institutes, commences, consents or otherwise becomes subject to any insolvency or liquidation proceeding, the RJRTH Intercompany Note Creditor unconditionally, irrevocably and immediately agrees to limited relief from the automatic stay under Section 362(a) of the Bankruptcy Code so as to allow the Collateral Agent and the other Secured Creditors the ability to exercise their rights under this Agreement with respect to the Collateral (other than the RJRTH Intercompany Note). The RJRTH Intercompany Note Creditor hereby agrees that it shall not, in any manner, oppose or otherwise delay any motion seeking limited relief from the automatic stay solely to effectuate the intent of, and the agreements set forth in, the preceding sentence.

          (b) The RJRTH Intercompany Note Creditor agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any insolvency or liquidation proceeding), (i) the validity or enforceability of this Agreement or any Obligation hereunder or (ii) the validity, perfection, priority or enforceability of the Liens, mortgages, assignments and security interests granted pursuant to this Agreement with respect to the Obligations.

          (c) So long as the discharge of the Obligations hereunder has not occurred, whether or not any insolvency or liquidation proceeding has been commenced by or against the Borrower or any other Assignor, the RJRTH Intercompany Note Creditor will not exercise or seek to exercise any rights or remedies (including setoff) with respect to the RJRTH Intercompany Note or institute or commence, or join with any Person in commencing, any action or proceeding with respect to such rights or remedies (including any action of foreclosure, enforcement, collection or execution and any insolvency or liquidation proceeding), and will not contest, protest or object to any foreclosure proceeding or action brought by the Collateral Agent of any other Secured Creditor or any other exercise by the Collateral Agent or any other Secured Creditor of any rights and remedies relating to the Collateral under this Agreement or otherwise, or object to the forbearance by the Collateral Agent or any other Secured Creditor from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Collateral.

          (d) The RJRTH Intercompany Note Creditor agrees that it will not take or receive any Collateral or any proceeds of Collateral in connection with the exercise of any right or remedy (including setoff) with respect to the RJRTH Intercompany Note, unless and until the discharge of Obligations has occurred.

          (e) The RJRTH Intercompany Note Creditor, (i) agrees that it will not take any action that would hinder, delay, limit or prohibit any exercise of remedies under this Agreement, including any collection, sale, lease, exchange, transfer or other disposition of the RJRTH Intercompany Note, whether by foreclosure or otherwise, or that would limit, invalidate, avoid or set aside any Lien or subordinate the priority of the Obligations and (ii) hereby waives any and all rights it may have to object to the manner in which the Collateral Agent or any other Secured Creditor seeks to enforce or collect the Obligations or the Liens granted in any of the Collateral, regardless of whether any action or failure to act by or on behalf of the Collateral Agent or any other Secured Creditor is adverse to the interest of the RJRTH Intercompany Note Creditor.

          (f) Until the discharge of Obligations occurs, the RJRTH Intercompany Note Creditor, hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent of the Collateral Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the RJRTH Intercompany Note Creditor, for the purpose of carrying out the terms of this Section 25, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Section 25, including any endorsements or other instruments of transfer or release.

          (g) Until the discharge of the Obligations has occurred, the RJRTH Intercompany Note Creditor agrees that it shall not seek relief, pursuant to Section 362(d) of the Bankruptcy Code or otherwise, from the automatic stay of Section 362(a) of the Bankruptcy Code or from any other stay in any insolvency or liquidation proceeding in respect of the RJRTH Intercompany Note.

          (h) The RJRTH Intercompany Note Creditor agrees that it shall not (i) oppose, object to or contest (or join with or support any third party opposing, objecting to or contesting) (a) any request by the Collateral Agent or any other Secured Creditor for adequate protection in any insolvency or liquidation proceeding (or any granting of such request) or (b) any objection by the Collateral Agent or any other Secured Creditor to any motion, relief, action or proceeding based on the Collateral Agent or any other Secured Creditor claiming a lack of adequate protection or (ii) seek or accept any form of adequate protection under any of Sections 362, 363 and/or 364 of the Bankruptcy Code with respect to the RJRTH Intercompany Note.

          (i) Nothing contained herein shall prohibit or in any way limit the Collateral Agent or any other Secured Creditor from objecting on any basis in any insolvency or liquidation proceeding or otherwise to any action taken by the RJRTH Intercompany Note Creditor including the seeking by the RJRTH Intercompany Note Creditor of adequate protection.

          (j) The RJRTH Intercompany Note Creditor waives any claim it may hereafter have against the Collateral Agent or any other Secured Creditor arising out of the election by the Collateral Agent or any other Secured Creditor of the application to the claims of the Collateral Agent or any other Secured Creditor of Section 1111(b)(2) of the Bankruptcy Code, and/or out of any cash collateral or post-petition financing arrangement or out of any grant of a security interest in connection with the RJRTH Intercompany Note in any insolvency or liquidation proceeding.

          (k) The RJRTH Intercompany Note Creditor agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the RJRTH Intercompany Note.

          (l) The parties hereto acknowledge and agree that it is their intent that the Obligations (other than the RJRTH Intercompany Note Obligations) and the security therefor constitute a separate and distinct class (and separate and distinct claims) from the RJRTH Intercompany Note Obligations (and the security therefor).

          (m) Nothing in this Section 25 is intended as a waiver by the Borrower of any of its rights in its capacity as an obligor or “debtor” under any of the Secured Debt Documents (as opposed to its rights as a secured creditor in its capacity as the RJRTH Intercompany Note Creditor).

          (n) Notwithstanding the foregoing, the provisions of this Section 25 shall cease to be operative on and after the date on which RJRTH becomes a Specified RAI Senior Notes Pledgor, and the RJRTH Intercompany Note Obligations cease to be secured by the capital stock of Reynolds Tobacco.

26. AMENDMENT AND RESTATEMENT. Each of the Collateral Agent and each of the Pledgors hereby acknowledges and agrees that from and after the Fourth Restatement Effective Date, this Agreement amends, restates and supersedes the First Amended and Restated Pledge Agreement in its entirety.

*       *       *

          IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

REYNOLDS AMERICAN INC.,      as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer

R.J. REYNOLDS TOBACCO HOLDINGS,       INC., as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer

R. J. REYNOLDS TOBACCO COMPANY,      as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer

RJR ACQUISITION CORP.,      as a Pledgor
By:	/s/ McDara P. Folan, III
	Name:	McDara P. Folan, III
	Title:	Vice President & Assistant Secretary

GMB, INC.,      as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Treasurer

FHS, INC.,      as a Pledgor
By:	/s/ Kathryn A. Premo
	Name:	Kathryn A. Premo
	Title:	Treasurer

R. J. REYNOLDS TOBACCO CO.,      as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

CONWOOD COMPANY, L.P., as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

CONWOOD SALES CO., L.P., as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

ROSSWIL LLC, as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

CONWOOD HOLDINGS, INC., as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

NA HOLDINGS, INC., as a Pledgor
By:	/s/ McDara P. Folan, III
	Name:	McDara P. Folan, III
	Title:	President

SANTA FE NATURAL TOBACCO      COMPANY, INC., as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Assistant Treasurer

LANE LIMITED, as a Pledgor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Assistant Treasurer

Acknowledged And Agreed:

JPMORGAN CHASE BANK, N.A.,
      as Collateral Agent and Pledgee

By	/s/ Robert T. Sacks
	Name:	Robert T. Sacks
	Title:	Managing Director

ANNEX F

Form of Agreement Regarding Uncertificated Securities, Limited Liability
Company Interests and Partnership Interests

          AGREEMENT (as amended, modified or supplemented from time to time, this “Agreement”), dated as of ___ ___, ___, among the undersigned pledgor (the “Pledgor”), JPMorgan Chase Bank, N.A., not in its individual capacity but solely as Collateral Agent (the “Pledgee”), and                     , as the issuer of the Uncertificated Securities, Limited Liability Company Interests and/or Partnership Interests (each as defined below) (the “Issuer”).

W I T N E S S E T H :

          WHEREAS, the Pledgor, certain of its affiliates and the Pledgee have entered into a Pledge Agreement, dated as of July 15, 2003, as amended and restated as of July 30, 2004, and as further amended and restated as of May [___], 2006, (as so amended and restated and as further amended, modified, restated and/or supplemented from time to time, the “Pledge Agreement”), under which, among other things, in order to secure the payment of the Obligations (as defined in the Pledge Agreement), the Pledgor will pledge to the Pledgee for the benefit of the Secured Creditors (as defined in the Pledge Agreement), and grant a security interest in favor of the Pledgee for the benefit of the Secured Creditors in, all of the right, title and interest of the Pledgor in and to any and all (1) “uncertificated securities” (as defined in Section 8-102(a)(18) of the Uniform Commercial Code, as adopted in the State of New York) (“Uncertificated Securities”), (2) Partnership Interests (as defined in the Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the Pledge Agreement), in each case issued from time to time by the Issuer, whether now existing or hereafter from time to time acquired by the Pledgor (with all of such Uncertificated Securities, Partnership Interests and Limited Liability Company Interests being herein collectively called the “Issuer Pledged Interests”); and

          WHEREAS, the Pledgor desires the Issuer to enter into this Agreement in order to protect the security interest of the Pledgee under the Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control of the Issuer Pledge Interests and to provide for the rights of the parties under this Agreement;

          NOW THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

          1. The Pledgor hereby irrevocably authorizes and directs the Issuer, and the Issuer hereby agrees, to comply with any and all instructions and orders originated by the Pledgee (and its successors and assigns) regarding any and all of the Issuer Pledged Interests without the further consent by the registered owner (including the Pledgor), and, after receiving a notice from the Pledgee stating that an “Event of Default” has occurred and is continuing, not to comply with any instructions or orders regarding any or all of the Issuer Pledged Interests originated by any person or entity other than the Pledgee (and its successors and assigns) or a court of competent jurisdiction.

ANNEX F
Page 2

          2. The Issuer hereby certifies that (i) no notice of any security interest, lien or other encumbrance or claim affecting the Issuer Pledged Interests (other than the security interest of the Pledgee) has been received by it, and (ii) the security interest of the Pledgee in the Issuer Pledged Interests has been registered in the books and records of the Issuer.

          3. The Issuer hereby represents and warrants that (i) the pledge by the Pledgor of, and the granting by the Pledgor of a security interest in, the Issuer Pledged Interests to the Pledgee, for the benefit of the Secured Creditors, does not violate the charter, by-laws, partnership agreement, membership agreement or any other agreement governing the Issuer or the Issuer Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and nonassessable.

          4. All notices, statements of accounts, reports, prospectuses, financial statements and other communications to be sent to the Pledgor by the Issuer in respect of the Issuer will also be sent to the Pledgee at the following address:

JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, New York 10017
Attention: Raju Nanoo
Tel: 212-270-2272
Fax: 212-270-5120

          5. Until the Pledgee shall have delivered written notice to the Issuer that all of the Obligations have been paid in full and this Agreement is terminated, the Issuer will, upon receiving notice from the Pledgee stating that an “Event of Default” has occurred and is continuing, send any and all redemptions, distributions, interest or other payments in respect of the Issuer Pledged Interests from the Issuer for the account of the Pledgor only by wire transfers to an account to be designated by the Pledgee.

          6. Except as expressly provided otherwise in Sections 4 and 5, all notices, shall be sent or delivered by mail, telegraph, telex, telecopy, cable or overnight courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Pledgee, the Pledgor or the Issuer shall not be effective until received by the Pledgee, the Pledgor or the Issuer, as the case may be. All notices and other communications shall be in writing and addressed as follows:

          (a) if to the Pledgor, at:

Attention:                     
Telephone No.:
Fax No.:

ANNEX F
Page 3

          (b) if to the Pledgee, at:

JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, New York 10017
Attention: Raju Nanoo
Tel: 212-270-2272
Fax: 212-270-5120

          (c) if to the Issuer, at:

or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. As used in this Section 6, “Business Day” means any day other than a Saturday, Sunday, or other day in which banks in New York are authorized to remain closed.

          7. This Agreement shall be binding upon the successors and assigns of the Pledgor and the Issuer and shall inure to the benefit of and be enforceable by the Pledgee and its successors and assigns. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in the manner whatsoever except in writing signed by the Pledgee, the Issuer and the Pledgor.

          8. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflict of laws.

ANNEX F
Page 4

          IN WITNESS WHEREOF, the Pledgor, the Pledgee and the Issuer have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written.

[                                                            ], as Pledgor
By
	Name:
	Title:

JPMORGAN CHASE BANK, N.A. not in its individual capacity but solely as Collateral Agent and Pledgee
By
	Name:
	Title:

[                                        ], the Issuer
By
	Name:
	Title:

EX-10.3

EXHIBIT 10.3

SECOND AMENDED AND RESTATED SECURITY AGREEMENT

among

REYNOLDS AMERICAN INC.,

R.J. REYNOLDS TOBACCO HOLDINGS, INC.,

VARIOUS SUBSIDIARIES OF

REYNOLDS AMERICAN INC.

and

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent

Dated as of May 31, 2006

TABLE OF CONTENTS

		Page
ARTICLE I	SECURITY INTERESTS		3
1.1	Grant of Security Interests		3
1.2	Power of Attorney		6
ARTICLE II	GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS		6
2.1	Necessary Filings		6
2.2	No Liens		6
2.3	Other Financing Statements		6
2.4	Chief Executive Office; Records		7
2.5	Location of Inventory and Equipment		7
2.6	Legal Names; Organizational Identification Number; Trade Names; Change of Name; etc.		7
2.7	Recourse		8
2.8	Jurisdiction and Type of Organization		8
2.9	Collateral in the Possession of a Bailee		8
2.10	As-Extracted Collateral; Timber-to-be-Cut		8
ARTICLE III	SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS		9
3.1	Additional Representations and Warranties		9
3.2	Maintenance of Records		9
3.3	Modification of Terms; etc.		9
3.4	Collection		10
3.5	Direction to Account Debtors; etc.		10
3.6	Instruments		10
3.7	Further Actions		10
3.8	Assignors Remain Liable Under Receivables and Contracts		11
3.9	Deposit Accounts; Etc.		11
3.10	Letter-of-Credit Rights		12
3.11	Commercial Tort Claims		12
3.12	Chattel Paper		13
ARTICLE IV	SPECIAL PROVISIONS CONCERNING TRADEMARKS		13
4.1	Additional Representations and Warranties		13
4.2	Licenses and Assignments		14
4.3	Infringements		14
4.4	Preservation of Marks		14
4.5	Maintenance of Registration		14
4.6	Future Registered Marks		14
4.7	Remedies		14

(i)

		Page
ARTICLE V	SPECIAL PROVISIONS CONCERNING TRADE SECRET RIGHTS, PATENTS AND COPYRIGHTS		15
5.1	Additional Representations and Warranties		15
5.2	Licenses and Assignments		16
5.3	Infringements		16
5.4	Maintenance of Patents or Copyrights		16
5.5	Prosecution of Patent or Copyright Application		16
5.6	Other Patents and Copyrights		16
5.7	Remedies		17
ARTICLE VI	PROVISIONS CONCERNING ALL COLLATERAL		17
6.1	Protection of Collateral Agent’s Security		17
6.2	Further Actions		18
6.3	Financing Statements		18
6.4	Additional Information		18
ARTICLE VII	REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT		18
7.1	Remedies; Obtaining the Collateral Upon Default		18
7.2	Remedies; Disposition of the Collateral		20
7.3	Waiver of Claims		21
7.4	Application of Proceeds		22
7.5	Remedies Cumulative		23
7.6	Discontinuance of Proceedings		23
ARTICLE VIII	INDEMNITY		24
8.1	Indemnity		24
8.2	Indemnity Obligations Secured by Collateral; Survival		25
ARTICLE IX	DEFINITIONS		25
ARTICLE X	MISCELLANEOUS		37
10.1	Notices		37
10.2	Waiver; Amendment		38
10.3	Obligations Absolute		39
10.4	Successors and Assigns		39
10.5	Headings Descriptive		39
10.6	Severability		39
10.7	Governing Law		39
10.8	Assignors’ Duties		39
10.9	Termination; Release		39
10.10	Collateral Agent		41
10.11	Counterparts		41
10.12	Additional Assignors		41
10.13	No Third Party Beneficiaries		42
10.14	Amendment and Restatement		42

(ii)

	Page
SCHEDULE OF CHIEF EXECUTIVE OFFICES; RECORD LOCATIONS		1

(iii)

ANNEX A	Schedule of Chief Executive Offices; Record Locations
ANNEX B	Schedule of Equipment and Inventory Locations
ANNEX C	Schedule of Legal Names, Trade and Fictitious Names, Etc.
ANNEX D	Schedule of Marks and Applications
ANNEX E	Schedule of Patents and Patent Applications
ANNEX F	Schedule of Copyrights and Copyright Applications
ANNEX G	Assignment of Security Interest in United States Patents and Trademarks
ANNEX H	Assignment of Security Interest in United States Copyrights
ANNEX I	Schedule of Type of Organization and Jurisdiction of Organization
ANNEX J	Schedule of Deposit Accounts
ANNEX K	Description of Commercial Tort Claims
ANNEX L	Form of Control Agreement Regarding Deposit Accounts
ANNEX M	Collateral Agent

Security Agreement

SECOND AMENDED AND RESTATED SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of July 15, 2003, as amended and restated as of July 30, 2004, and as further amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, restated, supplemented and/or otherwise modified from time to time, this “Agreement”), among each of the undersigned (together with any other entity that becomes a party hereto pursuant to Section 10.12 hereof, each, an “Assignor” and, collectively, the “Assignors”) and JPMORGAN CHASE BANK, N.A., as Collateral Agent (in such capacity, together with any successor collateral agent, the “Collateral Agent”) for the Secured Creditors (as defined below). Capitalized terms used herein shall have the meaning specified in Article IX herein or, if not defined therein, as specified in the Credit Agreement referred to below.

W I T N E S S E T H:

WHEREAS, Reynolds American Inc. (the “Borrower”), the various lending institutions from time to time party thereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative Agent”), have entered into a Credit Agreement, dated as of May 7, 1999, as amended and restated as of November 17, 2000, as further amended and restated as of May 10, 2002, as further amended and restated as of July 30, 2004, and as further amended and restated as of May 31, 2006, providing for the making of Loans to the Borrower and the issuance of, and participation in, Letters of Credit for the account of the Borrower, all as contemplated therein (with (i) the Lenders, the Swingline Lender, each Letter of Credit Issuer, the Administrative Agent, the other Agents, the Pledgee (as defined in the Pledge Agreement) and the Collateral Agent being herein called the “Lender Creditors” and (ii) the term “Credit Agreement” as used herein to mean the Credit Agreement described above in this paragraph, as the same may be further amended, modified, extended, renewed, replaced, restated, supplemented and/or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative, lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (x) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (y) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by the Borrower to the Collateral Agent);

WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and/or may in the future from time to time enter into, one or more agreements or arrangements with JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under the Credit Agreement for any reason (JPMCB and any such affiliate and their respective successors and assigns, each, a “Credit Card Issuer”)), providing for credit card loans to be made available to certain employees of the Borrower and/or one or more of its Subsidiaries (each such agreement or arrangement with a Credit Card Issuer, a “Secured Credit Card Agreement”);

WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and/or may in the future from time to time enter into, one or more (i) interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements), and/or (ii) foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency or commodity values (each such agreement or arrangement with a Hedging Creditor (as hereinafter defined), together with the Existing Interest Rate Swap Agreement, a “Secured Hedging Agreement”), with any Lender, or any affiliate thereof or a syndicate of financial institutions organized by a Lender or an affiliate of a Lender (even if any such Lender ceases to be a Lender under the Credit Agreement for any reason) (any such Lender, affiliate or other such financial institution that participates therein, together with Calyon (as counterparty to the Existing Interest Rate Swap Agreement), and in each case their subsequent successors and assigns, collectively, the “Hedging Creditors”, and together with the Lender Creditors and each Credit Card Issuer, the “Lender Secured Creditors”);

WHEREAS, R.J. Reynolds Tobacco Holdings, Inc., a Wholly-Owned Subsidiary of the Borrower (“RJRTH”) and the Existing Senior Notes Trustee, on behalf of the holders of the Existing Senior Notes, have entered into the Existing Senior Notes Indenture, providing for the issuance of Existing Senior Notes by RJRTH;

WHEREAS, the Borrower and the New Senior Notes Trustee, on behalf of the holders of the New Senior Notes, have entered into the New Senior Notes Indenture, providing for the issuance from time to time of New Senior Notes by the Borrower;

WHEREAS, the Borrower and the Refinancing Senior Notes Trustee, on behalf of the holders of the Refinancing Senior Notes, may from time to time enter into the Refinancing Senior Notes Indenture, providing for the issuance from time to time of Refinancing Senior Notes by the Borrower;

WHEREAS, pursuant to the Subsidiary Guaranty, each Assignor (other than the Borrower) has jointly and severally guaranteed to the Lender Secured Creditors the payment when due of the Guaranteed Obligations (as defined in the Subsidiary Guaranty);

WHEREAS, pursuant to the Borrower Guaranty, the Borrower has guaranteed to the Hedging Creditors and the Credit Card Issuers the payment when due of the Guaranteed Obligations;

WHEREAS, each Specified Existing Senior Notes Assignor (other than RJRTH) has jointly and severally guaranteed to the Existing Senior Notes Creditors the payment when due of principal and interest on the Existing Senior Notes;

WHEREAS, each Specified RAI Senior Notes Assignor (other than the Borrower) has jointly and severally guaranteed to the New Senior Notes Creditors the payment when due of principal and interest on the New Senior Notes;

WHEREAS, each Specified RAI Senior Notes Assignor (other than the Borrower) may from time to time jointly and severally guarantee to the Refinancing Senior Notes Creditors the payment when due of principal and interest on the Refinancing Senior Notes;

WHEREAS, certain of the Assignors have heretofore entered into a Security Agreement, dated as of July 15, 2003, and amended and restated as July 30, 2004 (as so amended and restated and as the same may further amended, restated, modified and/or supplemented from time to time, but not including, the date hereof, the “First Amended and Restated Security Agreement”);

WHEREAS, the Assignors desire to further amend and restate the First Amended and Restated Security Agreement in the form of this Agreement;

WHEREAS, the Credit Agreement requires this Agreement be executed and delivered to the Collateral Agent by the Assignors, and the Secured Hedging Agreements, the Existing Senior Notes Indenture and the New Senior Notes Indenture, require that this Agreement secure the respective Obligations as provided herein;

WHEREAS, each Assignor desires to execute this Agreement to satisfy the conditions described in the preceding paragraph;

NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties and hereby covenants and agrees as follows:

ARTICLE I

SECURITY INTERESTS

          1.1 Grant of Security Interests. (a) As security for the prompt and complete payment and performance when due of all of its Applicable Obligations, each Assignor does hereby sell, assign and transfer unto the Collateral Agent, and does hereby grant to the Collateral Agent for the benefit of the relevant Secured Creditors as their interests may appear, a continuing security interest in, all of the right, title and interest of such Assignor in, to and under all of the following, whether now existing or hereafter from time to time acquired:

     (i) each and every Receivable;

     (ii) all Contracts, together with all Contract Rights arising thereunder;

     (iii) all Inventory;

     (iv) all Equipment;

     (v) all Marks, together with the registrations and right to all renewals thereof, and the goodwill of the business of such Assignor symbolized by the Marks;

     (vi) the Cash Collateral Account established for such Assignor and all moneys, securities and instruments deposited or required to be deposited in such Cash Collateral Account;

     (vii) all Patents and Copyrights and all reissues, renewals or extensions thereof;

     (viii) all computer programs of such Assignor and all intellectual property rights therein and all other proprietary information of such Assignor, including, but not limited to, Trade Secrets Rights;

     (ix) all insurance policies;

     (x) all other Goods, General Intangibles, Chattel Paper (including without limitation all Tangible Chattel Paper and all Electronic Chattel Paper), Documents and Instruments;

     (xi) all Permits;

     (xii) all cash;

     (xiii) all Commercial Tort Claims;

     (xiv) all Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts maintained by such Assignor with any Person and all moneys, securities, Instruments and other investments deposited or required to be deposited in any of the foregoing;

     (xv) all Investment Property;

     (xvi) all Letter-of-Credit Rights (whether or not the respective letter of credit is evidenced by a writing);

     (xvii) all Software and all Software licensing rights, all writings, plans, specifications and schematics, all engineering drawings, customer lists, goodwill and licenses, and all recorded data of any kind or nature, regardless of the medium of recording;

     (xviii) all Supporting Obligations; and

     (xix) all Proceeds and products of any and all of the foregoing (all of the above, including this clause (xix), collectively, the “Collateral”);

provided that notwithstanding the foregoing, (x) the Collateral that secures the Existing Senior Notes Obligations of a Specified Existing Senior Notes Assignor shall be limited to Designated Existing Senior Notes Collateral owned by such Specified Existing Senior Notes Assignor, all of

which Collateral shall also ratably secure all other Applicable Obligations of such Specified Existing Senior Notes Assignor, and the Collateral Proceeds with respect to any item of Collateral owned by a Specified Existing Senior Notes Assignor that are to be applied to the Existing Senior Notes Obligations shall be limited to Collateral Proceeds from the sale, other disposition of or other realization upon, and other moneys received in respect of, the Designated Existing Senior Notes Collateral of such Specified Existing Senior Notes Assignor, with such Collateral Proceeds to also be applied ratably to all other Applicable Obligations of such Specified Existing Senior Notes Assignor and (y) the Collateral that secures the RAI Senior Notes Obligations of a Specified RAI Senior Notes Assignor shall be limited to Designated RAI Senior Notes Collateral owned by such Specified RAI Senior Notes Assignor, all of which Collateral shall also ratably secure all other Applicable Obligations of such Specified RAI Senior Notes Assignor, and the Collateral Proceeds with respect to any item of Collateral owned by a Specified RAI Senior Notes Assignor that are to be applied to the RAI Senior Notes Obligations shall be limited to Collateral Proceeds from the sale, other disposition of or other realization upon, and other moneys received in respect of, the Designated RAI Senior Notes Collateral of such Specified RAI Senior Notes Assignor, with such Collateral Proceeds to also be applied ratably to all other Applicable Obligations of such Specified RAI Senior Notes Assignor.

(b) Notwithstanding anything contained herein to the contrary, (i) the term “Collateral” as used herein shall not include any Copyright, Mark, Patent, Trade Secret, computer program or Software to the extent such property is subject to a license or agreement the terms of which prohibit an assignment of, or the granting of a security interest in, any Assignor’s rights thereunder or such Assignor’s grant of a security interest pursuant to this Agreement would give any party thereto (other than such Assignor) the right to terminate its obligations thereunder; provided that the foregoing limitation shall not affect, limit, restrict or impair the grant by an Assignor of the security interest pursuant to this Agreement in any account or any money or other amounts due or to become due under any such Copyright, Mark, Patent, Trade Secret, computer program or Software or such license or agreement governing the same, (ii) the term “Collateral” as used herein shall not include (x) the RJRTH Intercompany Note and any Contract Rights or General Intangibles of the Borrower arising under the Pledge Agreement in its capacity as RJRTH Intercompany Note Creditor, (y) any Equity Interests owned or held by any Assignor and (z) at any time prior to the exchange of at least 51% in aggregate principal amount of each series of Existing Senior Notes for Exchange Senior Notes pursuant to the Existing Senior Notes Exchange (and the elimination of the lien covenant in the Existing Senior Notes Indenture as consented to by the requisite holders of the Existing Senior Notes), all indebtedness and other obligations owing by a Subsidiary of RJRTH to RJRTH or any of its Subsidiaries and (iii) in the case of any sale, assignment, transfer or grant of a security interest hereunder by a Restricted Assignor only, the term “Collateral” shall not include any Collateral (determined as provided herein without regard to this clause (iii)) of such Restricted Assignor other than (x) Collateral of the type described in clauses (v), (vi), (vii), (viii) and (xix) of Section 1.1(a) and (y) all other Collateral of the type which may be perfected by the filling of a UCC-1 financing statement in any relevant jurisdiction.

          (c) The security interest of the Collateral Agent under this Agreement extends to all Collateral of the kind which is the subject of this Agreement which any Assignor may acquire at any time during the continuation of this Agreement.

          1.2 Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Collateral Agent may deem to be necessary or advisable in the premises, which appointment as attorney is coupled with an interest.

ARTICLE II

GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:

          2.1 Necessary Filings. All filings, registrations and recordings necessary or appropriate to create, preserve, protect and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of all the Collateral have been accomplished or shall have been accomplished within 45 days of a new Trigger Event occurring after the Fourth Restatement Effective Date (or, in the case of Collateral constituting Excluded Unperfected Collateral, on the date on which such Collateral ceases to qualify as such in accordance with the definition of Excluded Unperfected Collateral) and the security interest granted to the Collateral Agent pursuant to this Agreement in and to all of the Collateral (other than Excluded Unperfected Collateral) constitutes, upon satisfaction of such filings, registrations and recordings, a perfected security interest therein superior and prior to the rights of all other Persons therein (other than any such rights pursuant to any Permitted Liens that have a priority as provided under applicable law) and subject to no other Liens (other than Permitted Liens) and is entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests.

          2.2 No Liens. Such Assignor is, and as to all Collateral acquired by it from time to time after the date hereof such Assignor will be, the owner of all Collateral free from any Lien, security interest, encumbrance or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein (other than in connection with Permitted Liens) adverse to the Collateral Agent.

          2.3 Other Financing Statements. As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens and financing statements filed pursuant to the same liens as Permitted Liens) and at all times prior to the Termination Date, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the

Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or as permitted by the Credit Agreement.

          2.4 Chief Executive Office; Records. As of the date hereof, the chief executive office of such Assignor is located at the address or addresses indicated on Annex A hereto. Such Assignor will not move its chief executive office except to such new location as such Assignor may establish in accordance with the last sentence of this Section 2.4. The originals of all documents evidencing all Receivables and Contract Rights and Trade Secret Rights of such Assignor and the only original books of account and records of such Assignor relating thereto are, and will continue to be, kept at such chief executive office and/or one or more of the locations shown on Annex A, or at such new locations as such Assignor may establish in accordance with the last sentence of this Section 2.4. All Receivables and Contract Rights and Trade Secret Rights of such Assignor are, and will continue to be, maintained at, and controlled and directed (including, without limitation, for general accounting purposes) from, the office locations described above, or such new locations as such Assignor may establish in accordance with the last sentence of this Section 2.4. Such Assignor shall not establish new locations for such chief executive offices until (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice (or such lesser notice as shall be acceptable to the Collateral Agent in the case of a new record location to be established in connection with newly acquired Contracts) of its intention to do so, clearly describing such new location and providing such other information in connection therewith as the Collateral Agent may reasonably request, and (ii) with respect to such new location, it shall have taken all action, reasonably satisfactory to the Collateral Agent, to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.

          2.5 Location of Inventory and Equipment. All Inventory and Equipment held on the date hereof by each Assignor (other than immaterial amounts of Inventory and Equipment) is located at one of the locations shown on Annex B attached hereto, is in transit between such locations, or is in transit to customers.

          2.6 Legal Names; Organizational Identification Number; Trade Names; Change of Name; etc. The exact legal name of each Assignor, and the organizational identification number (if any) of each Assignor, as of the date hereof, is listed on Annex C hereto for such Assignor. No Assignor has or operates in any jurisdiction under, or in the five years preceding the date hereof has had or has operated in any jurisdiction under, any trade names, fictitious names or other names except its legal name and such other trade or fictitious names as are listed on Annex C hereto for such Assignor. No Assignor shall change its legal name, organizational identification number (if any) or assume or operate in any jurisdiction under any trade, fictitious or other name except its legal name, organizational identification number and those trade names in each case listed on Annex C hereto for such Assignor and those that may be established in accordance with the immediately succeeding sentence of this Section 2.6. No Assignor shall change its legal name or organizational identification number or assume or operate in any jurisdiction under any new trade, fictitious or other name or operate under any existing name in any additional jurisdiction until (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice of its intention so to do, clearly describing such new name and/or jurisdiction and, in the case of a new name, the jurisdictions in which such new name shall be used and providing such other information in connection therewith as the

Collateral Agent may reasonably request, (ii) with respect to such new name and/or jurisdiction, it shall have taken all action necessary, or in the reasonable opinion of the Collateral Agent, desirable to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect and (iii) the Collateral Agent shall have received evidence that all other actions (including, without limitation, the payment of all filing fees and taxes, if any, payable in connection with such filings) have been taken, in order to perfect (and maintain the perfection and priority of) the security interest granted hereby. In addition, to the extent that any Assignor does not have an organizational identification number on the date hereof and later obtains one, such Assignor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.

          2.7 Recourse. This Agreement is made with full recourse to such Assignor and pursuant to and upon all the warranties, representations, covenants, and agreements on the part of such Assignor contained herein, in the other Credit Documents and the other Secured Debt Agreements, and otherwise in writing in connection herewith or therewith.

          2.8 Jurisdiction and Type of Organization. The jurisdiction of organization of each Assignor, and the type of organization of each Assignor, as of the date hereof, is listed on Annex I hereto for such Assignor. No Assignor shall change its jurisdiction of organization or its type of organization until (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice of intention so to do, clearly describing such new jurisdiction of organization and/or type of organization and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new jurisdiction of organization and/or type of organization, it shall have taken all actions reasonably requested by the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.

          2.9 Collateral in the Possession of a Bailee. If any Inventory or other Goods (other than immaterial amounts of Inventory and Equipment) are at any time in the possession of a bailee, the respective Assignor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its reasonable best efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of the respective Assignor. The Collateral Agent agrees with the Assignors that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to any such bailee.

          2.10 As-Extracted Collateral; Timber-to-be-Cut. As of the date hereof, no Unrestricted Assignor owns, or expects to acquire, any property which constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date hereof any Unrestricted Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Unrestricted Assignor shall furnish the Collateral Agent with prompt written

notice thereof (which notice shall describe in reasonable detail the As-Extracted Collateral and/or Timber-to-be-Cut and the locations thereof) and shall take all actions as may be deemed reasonably necessary or desirable by the Collateral Agent to perfect the security interest of the Collateral Agent therein.

ARTICLE III

SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS

          3.1 Additional Representations and Warranties. As of the time when each of its Receivables arises, each Assignor shall be deemed to have represented and warranted that such Receivable, and all material records, papers and documents relating thereto (if any) are genuine and in all material respects what they purport to be, and that all papers and documents (if any) relating thereto (i) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes) and (ii) will, to the knowledge of such Assignor, evidence true and valid obligations of the account debtor named therein.

          3.2 Maintenance of Records. Each Assignor will keep and maintain at its own cost and expense satisfactory and complete records of its Receivables and Contracts, and such Assignor will make the same available to the Collateral Agent for inspection, at such Assignor’s own cost and expense, at any and all reasonable times (i.e., during normal business hours) and upon reasonable prior notice to such Assignor. If requested by the Collateral Agent while an Event of Default is in existence, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Receivables and Contract Rights (including, without limitation, copies of all documents evidencing the Receivables and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor). If the Collateral Agent so directs, upon the occurrence and during the continuance of an Event of Default, such Assignor shall legend, in form and manner reasonably satisfactory to the Collateral Agent, the Receivables and Contracts, as well as books, records and documents of such Assignor evidencing or pertaining to such Receivables with an appropriate reference to the fact that such Receivables and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.

          3.3 Modification of Terms; etc. No Assignor shall rescind or cancel any indebtedness evidenced by any Receivable or under any Contract, or modify any term thereof or make any adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Receivable or Contract, or interest therein, without the prior written consent of the Collateral Agent, except (i) as permitted by Section 3.4 hereof and (ii) in accordance with such Assignor’s reasonable business practices. Each Assignor will duly fulfill all obligations on its part to be fulfilled under or in connection with all material Receivables and Contracts and will do nothing to impair the rights of the Collateral Agent in the Receivables or Contracts.

          3.4 Collection. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Receivables or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Receivable or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Receivable or under such Contract, except that, so long as no Event of Default is then in existence in respect of which the Collateral Agent has given notice that this exception is no longer applicable, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Receivables and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with sound business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services. The reasonable costs and expenses (including, without limitation, attorneys’ fees) of collection, whether incurred by any Assignor or the Collateral Agent, shall be borne by such Assignor.

          3.5 Direction to Account Debtors; etc. Upon the occurrence and during the continuance of a Noticed Event of Default, and if the Collateral Agent so directs any Assignor, to the extent permitted by applicable law, such Assignor agrees (x) to cause all payments on account of the Receivables and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Receivables and/or under any Contracts to make payments with respect thereto as provided in preceding clause (x) and (z) that the Collateral Agent may enforce collection of any Receivables or Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as the Assignor. The Collateral Agent may apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account in the manner provided in Section 7.4 of this Agreement. The reasonable costs and expenses (including reasonable attorneys’ fees) of collection, whether incurred by any Assignor or the Collateral Agent, shall be borne by such Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor; provided that, the failure of the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.5.

          3.6 Instruments. If any Assignor owns or acquires any Instrument, such Assignor will within 30 Business Days notify the Collateral Agent thereof, and upon request by the Collateral Agent promptly deliver such Instrument (other than checks payable to any Assignor and processed in the ordinary course of business) to the Collateral Agent appropriately endorsed to the order of the Collateral Agent as further security hereunder.

          3.7 Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be necessary or required under the Federal Assignment of Claims Act, relating to its Receivables, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require to give effect to the purposes of this Agreement.

          3.8 Assignors Remain Liable Under Receivables and Contracts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Receivables and each Contract to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with the terms of the agreement giving rise to such Receivables or such Contract. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) or any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Receivable or such Contract pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Receivable (or any agreement giving rise thereto) or any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Receivable (or any agreement giving rise thereto) or any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

          3.9 Deposit Accounts; Etc. (a) No Unrestricted Assignor maintains, or at any time after the date hereof shall establish or maintain, any demand, time, savings, passbook or similar account, except for such accounts maintained with a bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in accordance with Section 9-304 of the UCC) is within a State of the United States, provided that an Unrestricted Assignor may maintain or establish an account or accounts outside of the United States on terms, and in circumstances, reasonably acceptable to the Collateral Agent, so long as (i) the aggregate amount of cash in all such accounts maintained outside the United States (exclusive of any amounts deposited in any such account representing monies from revenue generated exclusively from operations outside the United States) shall not exceed $150,000,000 and (ii) the aggregate amount of cash in all such accounts maintained outside the United States in excess of the amount permitted in preceding clause (i) does not exceed an amount reasonably satisfactory to the Collateral Agent (each such account outside the United States meeting the foregoing requirements, a “Non-U.S. Deposit Account”). Annex J hereto accurately sets forth, as of the date of this Agreement, for each Unrestricted Assignor, each Deposit Account maintained by such Unrestricted Assignor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account is maintained, and the jurisdiction of the respective Bank with respect to such Deposit Account. For each Perfected Deposit Account, the respective Unrestricted Assignor shall cause the bank with which the Perfected Deposit Account is maintained to execute and deliver to the Collateral Agent, within 60 days after the Fourth Restatement Effective Date or, if later, at the time of the establishment of the respective Perfected Deposit Account, a “control agreement” in the form of Annex L hereto (appropriately completed), with such changes thereto as may be approved by the Collateral Agent (such approval not to be unreasonably withheld). If any bank with which a Perfected Deposit Account is maintained refuses to, or does not, enter into such a “control agreement”, then the respective Unrestricted Assignor shall promptly (and in any event within 60 days after the Fourth Restatement Effective Date or, if later, 60 days after the opening of such account) close the respective Perfected Deposit Account and transfer all balances therein to the Cash Collateral Account or another Perfected Deposit Account meeting the requirements of this Section 3.9. If any bank with which a Perfected Deposit Account is maintained refuses to subordinate all its

claims with respect to such Perfected Deposit Account to the Collateral Agent’s security interest therein on terms satisfactory to the Collateral Agent, then the Collateral Agent, at its option, may (x) require that such Perfected Deposit Account be terminated in accordance with the immediately preceding sentence or (y) agree to a “control agreement” without such subordination, provided that in such event the Collateral Agent may at any time, at its option, subsequently require that such Perfected Deposit Account be terminated (within 60 days after notice from the Collateral Agent) in accordance with the requirements of the immediately preceding sentence.

          (b) After the date hereof, no Unrestricted Assignor shall establish any new demand, time, savings, passbook or similar account, except for Perfected Deposit Accounts established and maintained with banks and meeting the requirements of preceding clause (a). At the time any such Perfected Deposit Account is established, the appropriate “control agreement” shall be entered into in accordance with the requirements of preceding clause (a) and the respective Unrestricted Assignor shall furnish to the Collateral Agent a supplement to Annex J hereto containing the relevant information with respect to the respective Perfected Deposit Account and the bank with which same is established.

          3.10 Letter-of-Credit Rights. If any Unrestricted Assignor is at any time a beneficiary under a letter of credit with a stated amount of $1,000,000 or more, such Unrestricted Assignor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, such Unrestricted Assignor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, use its reasonable best efforts to (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of such letter of credit, with each Unrestricted Assignor and the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in this Agreement after the occurrence and during the continuance of a Noticed Event of Default (it being understood and agreed that at any time prior to the occurrence of a Noticed Event of Default, such proceeds shall be directed to the relevant Assignor).

          3.11 Commercial Tort Claims. All Commercial Tort Claims of each Unrestricted Assignor and any events or circumstances that would reasonably be expected to give rise to any Commercial Tort Claims of each Unrestricted Assignor as of the date of this Agreement are described in Annex K hereto. If any Unrestricted Assignor shall at any time and from time to time after the date hereof become aware of any Commercial Tort Claims or events or circumstances that would reasonably be expected to give rise to a Commercial Tort Claim of such Unrestricted Assignor, in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $1,000,000 or more, such Unrestricted Assignor shall (i) promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest in all such Commercial Tort Claims and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agent and (ii) perform all actions reasonably requested by the Collateral Agent to perfect such security interest in such Commercial Tort Claims.

     3.12 Chattel Paper. Upon the request of the Collateral Agent made at any time or from time to time, each Unrestricted Assignor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper held or owned by such Unrestricted Assignor. Furthermore, if requested by the Collateral Agent, each Unrestricted Assignor shall promptly take all actions which are reasonably practicable so that the Collateral Agent has “control” of all Electronic Chattel Paper in accordance with the requirements of Section 9-105 of the UCC. Each Unrestricted Assignor will promptly (and in any event within 10 days) following any request by the Collateral Agent, deliver all of its Tangible Chattel Paper to the Collateral Agent.

ARTICLE IV

SPECIAL PROVISIONS CONCERNING TRADEMARKS

          4.1 Additional Representations and Warranties. Each Assignor represents and warrants as of the date hereof that it is the true and lawful owner of the United States Patent and Trademark Office registrations, and applications for registrations, of the Marks listed in Annex D, Part I attached hereto. Annex D lists or otherwise describes all the United States Patent and Trademark Office, or the equivalent office thereof in any foreign country, registrations and applications for registrations, of the Marks that such Assignor now uses in connection with its business. Each Assignor represents and warrants as of the date hereof that the material registrations listed on Annex D Part I are valid, subsisting, have not been cancelled and that such Assignor is not aware of any third-party claim that any of said material registrations or applications for material registration with respect to a Mark is invalid or unenforceable or is not aware that there is any reason that any of said material registrations or applications for registration with respect to a Mark is invalid or unenforceable, or that there is any reason that any of said applications will not pass to registration. Each Assignor represents and warrants as of the date hereof that except with respect to those marks set forth in Annex D, Part II, it owns, or otherwise has the right to use all material Marks that it uses. Each Assignor further warrants as of the date hereof that it is not aware of any third party claiming that such Assignor’s use of a Mark material to the operation of the Assignor’s business violates in any material respect any property right of that party. Each Assignor represents and warrants that upon the recordation of an Assignment of Security Interest in United States Trademarks and Patents in the form of Annex G hereto in the United States Patent and Trademark Office, together with filings on Form UCC-1 pursuant to this Agreement, all filings, registrations and recordings necessary or appropriate to perfect the security interest granted to the Collateral Agent in the United States Marks covered by this Agreement under federal law will have been accomplished. Each Assignor agrees to execute such an Assignment of Security Interest in United States Trademarks and Patents covering all of such Assignor’s right, title and interest in each United States Mark, and the associated goodwill, of such Assignor, and to record the same. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of a Noticed Event of Default, any document which may be required by the United States Patent and Trademark Office in order to effect an absolute assignment of all such Assignor’s right, title and interest in each United States Mark owned by an Assignor, and record the same.

          4.2 Licenses and Assignments. Subject to the provisions of Sections 4.4 and 4.5, each Assignor hereby agrees not to divest itself of any right under a Mark other than in the ordinary course of business absent prior written approval of the Collateral Agent.

          4.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who may be infringing or otherwise violating in any material respect any of such Assignor’s rights in and to any Mark material to the operation of its business, or with respect to any party claiming that such Assignor’s use of any Mark material to the operation of its business violates in any material respect any property right of that party. Each Assignor further agrees, to prosecute diligently any Person infringing in any material respect any Mark owned by such Assignor in a manner consistent with its past practice and in accordance with reasonable business practices.

          4.4 Preservation of Marks. Each Assignor agrees to use or license the use of its Marks in interstate commerce during the time in which this Agreement is in effect, sufficiently to preserve such Marks as trademarks or service marks registered under the laws of the United States or the relevant foreign jurisdiction; provided, that no Assignor shall be obligated to preserve any Mark in the event such Assignor determines, in its reasonable business judgment, that the preservation of such Mark is no longer necessary in the conduct of its business.

          4.5 Maintenance of Registration. Each Assignor shall, at its own expense, diligently process all documents required to maintain trademark registrations, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office or equivalent governmental agency in any foreign jurisdiction for all of its Marks (excluding unregistered Marks), and shall pay all fees and disbursements in connection therewith, and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent; provided, that no Assignor shall be obligated to maintain any Mark or prosecute any such application for registration in the event that such Assignor determines, in its reasonable business judgment, that such Mark or application is no longer necessary in the conduct of its business.

          4.6 Future Registered Marks. If any Mark registration issues hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office or equivalent governmental agency in any foreign jurisdiction, at the time of the delivery (or required delivery) of the annual or quarterly financial information of the Borrower to the Lenders pursuant to Section 7.01(a) or (b), as the case may be, of the Credit Agreement, such Assignor shall deliver a copy of the related registration certificate, and a grant of security in such mark to the Collateral Agent, confirming the grant thereof hereunder, the form of such confirmatory grant to be substantially the same as the form of Annex G hereof or in such other form as may be reasonably acceptable to the Collateral Agent.

          4.7 Remedies. If a Noticed Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in and to each of

the Marks, together with all trademark rights and rights of protection to the same, vested, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the relevant Secured Creditors pursuant to a trademark security agreement in form and substance satisfactory to the Collateral Agent, executed by such Assignor and filed on the date hereof, pursuant to which all of such Assignor’s rights, title and interest in and to the Marks are assigned to the Collateral Agent for the benefit of the relevant Secured Creditors; (ii) take and use or sell the Marks and the goodwill of such Assignor’s business symbolized by the Marks and the right to carry on the business and use the assets of such Assignor in connection with which the Marks have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks in any manner whatsoever, directly or indirectly, and, if requested by the Collateral Agent, change such Assignor’s corporate name to eliminate therefrom any use of any Mark and execute such other and further documents that the Collateral Agent may request to further confirm this and to transfer ownership of the Marks and registrations and any pending trademark application in the United States Patent and Trademark Office or any equivalent governmental agency or office in any foreign jurisdiction to the Collateral Agent.

ARTICLE V

SPECIAL PROVISIONS CONCERNING
TRADE SECRET RIGHTS, PATENTS AND COPYRIGHTS

          5.1 Additional Representations and Warranties. Except as set forth in the Annexes attached hereto, each Assignor represents and warrants as of the date hereof that it is the true and lawful owner or licensee of all rights in (i) all Trade Secrets, (ii) the Patents of such Assignor listed in Annex E attached hereto and that said Patents constitute all the patents and applications for patents that such Assignor now owns and (iii) the Copyrights of such Assignor listed in Annex F attached hereto and that said Copyrights constitute all the registered copyrights and applications for copyright registrations that such Assignor now owns. Except as set forth on Annex F, each Assignor further warrants as of the date hereof that it is not aware of any third party claim that such Assignor’s use of any patent or any copyright material to the operation of the Assignor’s business infringes or will infringe any material patent or any material copyright owned by or licensed to any third party or that such Assignor has misappropriated any material Trade Secret owned by or licensed to any third party. Each Assignor represents and warrants that upon the recordation of an Assignment of Security Interest in United States Trademarks and Patents in the form of Annex G hereto in the United States Patent and Trademark Office and the recordation of an Assignment of Security Interest in United States Copyrights in the form of Annex H hereto in the United States Copyright Office, together with filings on Form UCC-1 pursuant to this Agreement, all filings, registrations and recordings necessary or appropriate to perfect the security interest granted to the Collateral Agent in the United States Patents and United States Copyrights covered by this Agreement under federal law will have been accomplished. Upon obtaining any Patent, each Assignor agrees to execute an Assignment of Security Interest in United States Trademarks and Patents covering all right, title and interest in each United States Patent of such Assignor and to record the same, and upon obtaining any registration of a Copyright, to execute such an Assignment of Security Interest in United States Copyrights covering all right, title and interest in each such registered United States Copyright of

such Assignor and to record the same. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by the U.S. Patent and Trademark Office or equivalent governmental agency in any foreign jurisdiction or the U.S. Copyright Office or equivalent governmental agency in any foreign jurisdiction in order to effect an absolute assignment of all right, title and interest in each Patent and Copyright, and to record the same.

          5.2 Licenses and Assignments. Subject to the provisions of Sections 5.4 and 5.5, each Assignor hereby agrees not to divest itself of any right under a Patent or Copyright other than in the ordinary course of business absent prior written approval of the Collateral Agent.

          5.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any material infringement or other violation of such Assignor’s rights in any Patent or Copyright, in each case material to its business, or with respect to any claim that the practice of any Patent or the use of any work of authorship with respect to which there exists a Copyright, in each case material to its business, violates in any material respect any property right of a third party or with respect to any misappropriation of any Trade Secret material to its business or any claim that the practice of any Trade Secret material to its business violates any property right of a third party. To the extent consistent with its past practice and in accordance with reasonable business practices, each Assignor further agrees, to prosecute diligently any Person materially infringing any Patent or Copyright owned by such Assignor or any Person misappropriating any Trade Secret.

          5.4 Maintenance of Patents or Copyrights. At its own expense, each Assignor shall make timely payment of all post-issuance fees required to maintain in force rights under each of its Patents and Copyrights; provided, that no Assignor shall be obligated to maintain any Patent in the event such Assignor determines, in its reasonable business judgment, that the maintenance of such Patent is no longer necessary in the conduct of its business.

          5.5 Prosecution of Patent or Copyright Application. At its own expense, each Assignor shall diligently prosecute all applications for (i) Patents of such Assignor listed on Annex E hereto and (ii) Copyrights listed on Annex F hereto, and, in each case, shall not abandon any such application prior to exhaustion of all administrative and judicial remedies, absent written consent of the Collateral Agent, provided that no Assignor shall be obligated to maintain any Patent or Copyright in the event such Assignor determines it is no longer necessary in the conduct of its business.

          5.6 Other Patents and Copyrights. At the time of the delivery (or required delivery) of the annual or quarterly financial information of the Borrower to the Lenders pursuant to Section 7.01(a) or (b), as the case may be, of the Credit Agreement, the relevant Assignor shall deliver to the Collateral Agent information of the type required by Annex E or Annex F hereto (as applicable) relating to each newly acquired or issued Patent or Copyright and each newly filed application for a Patent or Copyright, as the case may be, with a grant of security as to such Patent or Copyright, as the case may be, confirming the grant thereof hereunder, the form of such confirmatory grant to be substantially in the form of Annex G or

Annex H, as the case may be, hereto; provided, that no Assignor (i) shall be obligated to prosecute any application in the event such Assignor determines, in its reasonable business judgment, that such application is no longer necessary in the conduct of its business and (ii) shall be obligated to provide a copy of a Patent application or any other information with respect to an application for a Patent or Copyright registration (other than the application date and filing number and such other identifying information necessary to perfect a security interest in the respective Patent or Copyright) if such Assignor reasonably believes such information is confidential or such disclosure would materially impair or prejudice Assignor’s rights under such application or registration.

          5.7 Remedies. If a Noticed Event of Default shall occur and be continuing, the Collateral Agent may by written notice to the relevant Assignor take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in each of the Patents and Copyrights vested, in which event such right, title and interest shall immediately vest in the Collateral Agent for the benefit of the relevant Secured Creditors, pursuant to a patent security agreement or copyright security agreement, as the case may be, in form and substance satisfactory to the Collateral Agent, executed by such Assignor and filed on the date hereof, pursuant to which all of such Assignor’s right, title, and interest to such Patents and Copyrights are assigned to the Collateral Agent for the benefit of the relevant Secured Creditors; (ii) take and practice, use or sell the Patents and Copyrights; (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such other and further documents as the Collateral Agent may request further to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the relevant Secured Creditors.

ARTICLE VI

PROVISIONS CONCERNING ALL COLLATERAL

          6.1 Protection of Collateral Agent’s Security. Each Assignor will at all times keep its Inventory and Equipment insured in favor of the Collateral Agent, at its own expense, to the extent required by the Credit Agreement; copies of all policies or certificates with respect to such insurance (i) shall be endorsed to the Collateral Agent’s reasonable satisfaction for the benefit of the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss payee and the Collateral Agent and the other relevant Secured Creditors as additional insureds), (ii) shall state that such insurance policies shall not be cancelled or materially revised without at least 30 days’ (or at least 10 days’ in the case of nonpayment of premium) prior written notice thereof by the insurer to the Collateral Agent and (iii) shall be deposited with the Collateral Agent. If any Assignor shall fail to insure such Inventory or Equipment to the extent required by the Credit Agreement, or if any Assignor shall fail to so endorse and deposit copies of all policies or certificates with respect thereto, the Collateral Agent shall have the right (but shall be under no obligation), upon prior written notice to such Assignor, to procure such insurance and such Assignor agrees to reimburse the Collateral Agent for all reasonable costs and expenses of procuring such insurance. Except as otherwise provided in the Credit Agreement, the Collateral Agent shall apply any proceeds of such insurance required after a Noticed Event of Default in accordance with Section 7.4 (it being understood that so long as no

Noticed Event of Default has occurred and is continuing, the Collateral Agent will release any interest it has in the proceeds of any casualty insurance to the Assignors). Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay its Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor.

          6.2 Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral.

          6.3 Financing Statements. Each Assignor agrees to execute and deliver to the Collateral Agent such financing statements, in form acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or desirable in the reasonable opinion of the Collateral Agent to establish and maintain a valid, enforceable, first priority perfected security interest in the Collateral (subject to the Permitted Liens) as provided herein and the other rights and security contemplated hereby all in accordance with the Uniform Commercial Code as enacted in any and all relevant jurisdictions or any other relevant law. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements (including, without limitation, (x) financing statements which list the Collateral specifically and/or “all assets” as collateral and (y) “in lieu of” financing statements) without the signature of such Assignor where permitted by law.

          6.4 Additional Information. Each Assignor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 10 days after its receipt of the respective request) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it shall promptly (and in any event within 10 days after its receipt of the respective request) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent.

ARTICLE VII

REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

          7.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, if a Noticed Event of Default shall have occurred and be continuing, then and in every such

case, subject to any mandatory requirements of applicable law then in effect, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and under the other provisions of this Agreement, shall have all rights as a secured creditor under the Uniform Commercial Code in all relevant jurisdictions and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and may also:

     (i) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor’s premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor;

     (ii) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Receivables and the Contracts) constituting the Collateral to make any payment required by the terms of such instrument or agreement directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral;

     (iii) instruct all banks which have entered into a control agreement with the Collateral Agent to transfer all moneys, securities and instruments held by such depository bank to the Cash Collateral Account and withdraw all moneys, securities and instruments in the Cash Collateral Account for application to the Obligations in accordance with Section 7.4 hereof;

     (iv) sell, assign or otherwise liquidate, or direct such Assignor to sell, assign or otherwise liquidate, any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, and take possession of the proceeds of any such sale or liquidation;

     (v) take possession of the Collateral or any part thereof, by directing such Assignor in writing to deliver the same to the Collateral Agent at any place or places reasonably designated by the Collateral Agent, in which event such Assignor shall at its own expense:

     (A) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent,

     (B) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2, and

     (C) while the Collateral shall be so stored and kept, provide such guards, other security and maintenance services as shall be necessary to protect the same and to preserve and maintain them in good condition;

     (vi) license or sublicense whether on an exclusive or nonexclusive basis, any Marks, Patents or Copyrights included in the Collateral for such term and on such

conditions and in such manner as the Collateral Agent shall in its sole judgment determine;

     (vii) apply any moneys constituting Collateral or proceeds thereof in accordance with Section 8.4; and

     (viii) take any other action as specified in clauses (1) through (5), inclusive, of Section 9-607 of the UCC.

it being understood that such Assignor’s obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of said obligation. By accepting the benefits of this Agreement and each other Security Document, the Secured Creditors expressly acknowledge and agree that (x) this Agreement and each other Security Document may be enforced only by the action of the Collateral Agent acting upon the instructions of the Required Lenders or, if the CA Termination Date has occurred, the holders of a majority of the outstanding principal amount of all remaining Obligations, provided that if prior to the CA Termination Date a payment default with respect to at least $300,000,000 principal amount in the aggregate of Existing Senior Notes, New Senior Notes and/or Refinancing Senior Notes has continued for at least 180 days (and such defaulted payment has not been received pursuant to a drawing under any letter of credit), the holders of a majority of the outstanding principal amount of the Indebtedness subject to such payment default or defaults can direct the Collateral Agent to commence and continue enforcement of the Liens created hereunder, which the Collateral Agent shall comply with subject to receiving any indemnity which it reasonably requests, provided further that the Collateral Agent shall thereafter comply only with the directions of the Required Lenders as to carrying out such enforcement so long as such directions are not adverse to the aforesaid directions of the holders of Indebtedness subject to such payment default or defaults, and (y) no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or any other Security Document or to realize upon the security to be granted hereby or thereby, it being understood and agreed that such rights and remedies shall be exercised exclusively by the Collateral Agent for the benefit of the Secured Creditors as their interest may appear upon the terms of this Agreement and the other Security Documents.

          7.2 Remedies; Disposition of the Collateral. Upon the occurrence and continuance of a Noticed Event of Default, any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair which the Collateral Agent shall determine to be commercially reasonable. Any such disposition which shall be a private sale or other private proceedings permitted by such requirements shall be made upon not less than ten (10) days’ written notice to the relevant Assignor specifying the time at which such disposition is to

be made and the intended sale price or other consideration therefor, and shall be subject, for the ten (10) days after the giving of such notice, to the right of the relevant Assignor or any nominee of such Assignor to acquire the Collateral involved at a price or for such other consideration at least equal to the intended sale price or other consideration so specified. Any such disposition which shall be a public sale permitted by such requirements shall be made upon not less than ten (10) days’ written notice to the relevant Assignor specifying the time and place of such sale and, in the absence of applicable requirements of law, shall be by public auction (which may, at the Collateral Agent’s option, be subject to reserve), after publication of notice of such auction not less than 10 days prior thereto in one newspaper in general circulation in the City of New York and one newspaper in general circulation in Winston Salem, North Carolina. To the extent permitted by any such requirement of law, the Collateral Agent on behalf of the Secured Creditors (or certain of them) may bid for and become the purchaser (by bidding in the Obligations or otherwise) of the Collateral or any item thereof, offered for sale in accordance with this Section without accountability to the relevant Assignor (except to the extent of surplus money received as provided in Section 7.4). If, under mandatory requirements of applicable law, the Collateral Agent shall be required to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be reasonably practicable in view of such mandatory requirements of applicable law.

          7.3 Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and such Assignor hereby further waives, to the extent permitted by law:

     (i) all damages occasioned by such taking of possession or any such disposition except any damages which are the direct result of the Collateral Agent’s gross negligence or wilful misconduct;

     (ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and

     (iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.

Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity

against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor.

          7.4 Application of Proceeds. (a) All moneys collected by the Collateral Agent upon any sale, other disposition of or other realization upon any Collateral, together with all other moneys received by the Collateral Agent hereunder (collectively, the “Collateral Proceeds”), shall be applied as follows:

     (i) first, to the payment of all Obligations owing to the Collateral Agent of the type described in clauses (vii), (viii) and (ix) of the definition of “Obligations” contained in Article IX hereof;

     (ii) second, to the extent proceeds of the sale, any disposition of or other realization upon any item of Collateral remain after the application pursuant to preceding clause (i), an amount equal to the outstanding Applicable Obligations secured by such item of Collateral shall be paid to the Secured Creditors as their interests may appear, with (x) each Secured Creditor receiving an amount equal to its outstanding Applicable Obligations secured by such item of Collateral or, if the proceeds are insufficient to pay in full all such Applicable Obligations, its Pro Rata Share of the amount so remaining to be distributed and (y) in the case of the Credit Document Obligations, the Existing Senior Notes Obligations, the New Senior Notes Obligations and the Refinancing Senior Notes Obligations included in such Applicable Obligations, any such amount to be applied (1) first to the payment of interest in respect of the unpaid principal amount of Loans, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, as the case may be, (2) second to the payment of principal of Loans, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, as the case may be, and (3) third to the other Credit Document Obligations, Existing Senior Notes Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be; and

     (iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), to the relevant Assignor or, to the extent directed by such Assignor or a court of competent jurisdiction, to whomever may be lawfully entitled to receive such surplus.

          (b) For purposes of this Agreement, “Pro Rata Share” shall mean when calculating a Secured Creditor’s portion of any distribution or amount pursuant to Section 7.4(a), the amount (expressed as a percentage) equal to a fraction the numerator of which is the then outstanding amount of the relevant Applicable Obligations secured by the relevant item of Collateral owed such Secured Creditor and the denominator of which is the then outstanding amount of all Applicable Obligations secured by the relevant item of Collateral.

          (c) All payments required to be made to the (i) Lender Creditors hereunder shall be made to the Administrative Agent for the account of the respective Lender Creditors, (ii) Credit Card Issuers hereunder shall be made to the Credit Card Issuer(s) under the applicable Secured Credit Card Agreement, (iii) Hedging Creditors hereunder shall be made to the paying agent under the applicable Secured Hedging

Agreement or, in the case of Secured Hedging Agreements without a paying agent, directly to the applicable Hedging Creditors, (iv) Existing Senior Notes Creditors hereunder shall be made to the Existing Senior Notes Trustee for the account of the respective Existing Senior Notes Creditors, (v) New Senior Notes Creditors hereunder shall be made to the New Senior Notes Trustee for the account of the respective New Senior Notes Creditors, and (vi) Refinancing Senior Notes Creditors hereunder shall be made to the Refinancing Senior Notes Trustee for the account of the respective Refinancing Senior Notes Creditors.

          (d) For purposes of applying payments received in accordance with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent for a determination of the outstanding Credit Document Obligations, (ii) any Credit Card Issuer for a determination of the outstanding Credit Card Obligations owed to such Credit Card Issuer, (iii) any Hedging Creditor for a determination of the outstanding Hedging Obligations owed to such Hedging Creditor, (iv) the Existing Senior Notes Trustee for a determination of the outstanding Existing Senior Notes Obligations, (v) the New Senior Notes Trustee for a determination of the outstanding New Senior Notes Obligations, and (vi) the Refinancing Senior Notes Trustee for a determination of the outstanding Refinancing Senior Notes Obligations. Unless it has actual knowledge (including by way of written notice from a Secured Creditor) to the contrary, the Administrative Agent under the Credit Agreement, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Credit Document Obligations other than principal, interest and regularly accruing fees are owing to any Lender Creditor.

          (e) It is understood that each Assignor shall remain liable to the extent of any deficiency between (x) the amount of the obligations for which it is liable directly or as a Guarantor that are satisfied with proceeds of the Collateral and (y) the aggregate outstanding amount of such Obligations.

          7.5 Remedies Cumulative. Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given under this Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity, or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of exercise of one shall not be deemed a waiver of the right to exercise of any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence therein. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover expenses, including attorneys’ fees, and the amounts thereof shall be included in such judgment.

          7.6 Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or

abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted (except to the extent of a determination adverse to the Collateral Agent in such a proceeding).

ARTICLE VIII

INDEMNITY

          8.1 Indemnity. (a) Each Assignor jointly and severally agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, permitted assigns, employees, agents and servants (hereinafter in this Section 8.1 referred to individually, as “Indemnitee,” and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments and any and all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) (for the purposes of this Section 8.1 the foregoing are collectively called “expenses”) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, or the documents executed in connection herewith or in any other way connected with the enforcement of any of the terms of, or the preservation of any rights hereunder, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for expenses, losses, damages or liabilities to the extent caused by the gross negligence or wilful misconduct of such Indemnitee. Each Assignor agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, loss, damage, penalty, claim, demand, action, judgment or suit, such Assignor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify such Assignor of any such assertion of which such Indemnitee has knowledge.

          (b) Without limiting the application of Section 8.1(a), each Assignor agrees, jointly and severally, to pay, or reimburse the Collateral Agent for (if the Collateral Agent shall have incurred fees, costs or expenses because such Assignor shall have failed to comply with its obligations under this Agreement) any and all reasonable fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agent’s Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other reasonable fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the

Collateral Agent’s interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral. Any reference in this Agreement, to “fees of counsel” or other similar phraseology shall mean the actual and reasonable fees incurred at customary and reasonable hourly rates in the jurisdiction in which the services of such counsel are performed, not pursuant to any statutory formula or percentage calculation.

          (c) Without limiting the application of Section 8.1(a) or (b), each Assignor jointly and severally agrees to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any material misrepresentation by an Assignor in this Agreement, or in any statement or writing contemplated by or made or delivered pursuant to or in connection with this Agreement.

          (d) If and to the extent that the obligations of any Assignor under this Section 8.1 are unenforceable for any reason, each Assignor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

          8.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all the Notes issued under the Credit Agreement, the termination of all Secured Hedging Agreements, the full payment of all Existing Senior Notes issued under the Existing Senior Notes Indenture, the full payment of all New Senior Notes issued under the New Senior Notes Indenture, the full payment of all Refinancing Senior Notes issued under the Refinancing Senior Notes Indenture and the payment of all of the other Obligations and notwithstanding the discharge thereof.

ARTICLE IX

DEFINITIONS

The following terms shall have the meanings herein specified unless the context otherwise requires. Such definitions shall be equally applicable to the singular and plural forms of the terms defined.

“Additional Senior Notes” shall have the meaning provided in the Credit Agreement.

“Administrative Agent” shall have the meaning provided in the recitals to this Agreement.

“Agreement” shall mean this Security Agreement, as the same may be modified, supplemented or amended from time to time in accordance with its terms.

“As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

          “Assignor” shall have the meaning specified in the first paragraph of this Agreement.

“Applicable Obligations” shall mean (i) for each Assignor that is a Specified RAI Senior Notes Assignor but not a Specified Existing Senior Notes Assignor, all the Obligations other than the Existing Senior Notes Obligations, (ii) for each Assignor that is a Specified Existing Senior Notes Assignor but not a Specified RAI Senior Notes Assignor, all the Obligations other than the New Senior Notes Obligations and the Refinancing Senior Notes Obligations, (iii) for each Assignor that is both a Specified RAI Senior Notes Assignor and a Specified Existing Senior Notes Assignor, all the Obligations and (iv) for each Assignor that is neither a Specified RAI Senior Notes Assignor nor a Specified Existing Senior Notes Assignor, all the Obligations other than the Existing Senior Notes Obligations, the New Senior Notes Obligations and the Refinancing Senior Notes Obligations, provided that (x) the Existing Senior Notes Obligations shall be excluded from the Applicable Obligations of a Specified Existing Senior Notes Assignor to the extent the Existing Senior Notes Documents do not require the Existing Senior Notes Obligations to be secured pursuant to this Agreement (or, in the case of the Applicable Obligations of the Borrower, to the same extent the Existing Senior Notes Obligations are excluded from the Applicable Obligations of RJRTH as provided above in this clause (x)), (y) the New Senior Notes Obligations shall be excluded from the Applicable Obligations of a Specified RAI Senior Notes Assignor to the extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured pursuant to this Agreement, and (z) the Refinancing Senior Notes Obligations shall be excluded from the Applicable Obligations of a Specified RAI Senior Notes Assignor to the extent the Refinancing Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured pursuant to this Agreement.

“Business Day” means any day excluding Saturday, Sunday and any day which shall be in the City of New York a legal holiday or a day on which banking institutions are authorized by law to close.

“CA Termination Date” shall have the meaning provided in Section 10.9 hereof.

“Cash Collateral Account” shall mean a non-interest bearing cash collateral account maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors as their interests may appear.

“Chattel Paper” shall mean “chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. Without limiting the foregoing, the term “Chattel Paper” shall in any event include all Tangible Chattel Paper and all Electronic Chattel Paper.

“Class” shall have the meaning provided in Section 10.2 hereof.

“Collateral” shall have the meaning provided in Section 1.1(a) hereof.

“Collateral Agent” shall have the meaning specified in the first paragraph of this Agreement.

“Collateral Proceeds” shall have the meaning provided in Section 7.4(a) hereof.

“Commercial Tort Claims” shall mean “commercial tort claims” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Contract Rights” shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts and Excluded Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.

“Contracts” shall mean all contracts between an Assignor and one or more additional parties (including, without limitation, any Secured Credit Card Agreement, any Secured Hedging Agreement and related documents entered into in connection therewith) to the extent the grant by an Assignor of a security interest pursuant to this Agreement in its right, title and interest in any such contract is not prohibited by such contract (or, if prohibited, the consent of each other party to such grant of a security interest is obtained) and would not give any other party to such contract the right to terminate, or automatically result in the termination of, such other party’s obligations thereunder or the Assignor’s rights thereunder (those contracts where such grant is so prohibited (and consent not obtained) or resulting in such a right of, or automatic, termination are referred to herein as “Excluded Contracts”).

“Copyrights” shall mean any United States or foreign copyright filed or registered by any Assignor now or hereafter, in the United States Copyright Office or the equivalent thereof in any foreign country, as well as any application for a United States or foreign copyright registration now or hereafter made with the United States Copyright Office or the equivalent thereof in any foreign jurisdiction by any Assignor.

“Credit Agreement” shall have the meaning provided in the recitals of this Agreement.

“Credit Card Issuer” shall have the meaning provided in the recitals of this Agreement.

“Credit Card Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Credit Document Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Deposit Accounts” shall mean all “deposit accounts” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York; provided that the term “Deposit Account” shall not include (i) any Excluded Escrow Account and (ii) any Deposit Account (defined as provided above without regard to this proviso) of Lane or Santa Fe.

“Designated Existing Senior Notes Collateral” shall mean, with respect to any Specified Existing Senior Notes Assignor, Collateral owned by such Specified Existing Senior Notes Assignor consisting of (i) any shares of stock, indebtedness or other obligations of a Subsidiary of RJRTH held by or owing to such Specified Existing Senior Notes Assignor (other than the Borrower) or (ii) any Principal Property of such Specified Existing Senior Notes Assignor (other than the Borrower).

“Designated RAI Senior Notes Collateral” shall mean, with respect to any Specified RAI Senior Notes Assignor, Collateral owned by such Specified RAI Senior Notes Assignor consisting of (i) any Principal Property of such Specified RAI Senior Notes Assignor or (ii) at any time on or after the time RJRTH becomes a Specified RAI Senior Notes Assignor, all indebtedness and other obligations owing by Reynolds Tobacco owned or held by such Specified RAI Senior Notes Assignor.

“Documents” shall mean “documents” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Equipment” shall mean any “equipment,” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor and, in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures now or hereafter owned by such Assignor and any and all additions, substitutions and replacements of any of the foregoing and all accessories hereto, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto but excluding Equipment to the extent it is subject to a Permitted Lien and the terms of the Indebtedness securing such Permitted Liens prohibits assignment or granting of a security interest in such Assignor’s rights and obligations thereunder.

“Event of Default” shall mean any Event of Default under the Credit Agreement, any “event of default” under the Existing Senior Notes Documents, the New Senior Notes Documents or the Refinancing Senior Notes Documents or any payment default, after any applicable grace period, under any Secured Credit Card Agreement or any Secured Hedging Agreement.

“Exchange Senior Notes” shall have the meaning provided in the Credit Agreement.

“Excluded Contracts” shall have the meaning provided in the definition of Contracts.

“Excluded Deposit Account” shall mean (i) the Cash Collateral Account, (ii) payroll accounts, (iii) accounts used solely for disbursement purposes, (iv) up to ten certificates of deposit established with various Lenders identified as “Excluded Deposit Accounts” and set forth from time to time on Annex J hereto (provided that such certificates of deposit shall be “Excluded Deposit Accounts” only so long as the aggregate amount of cash and cash equivalents on deposit in such accounts does not exceed $1,000,000 at any time) and (v) each Non-U.S. Deposit Account.

“Excluded Escrow Accounts” shall mean (i) the account maintained with the Bank of New York in which cash has been deposited for the benefit of certain former shareholders of Nabisco Group Holdings and (ii) escrow accounts which collateralize litigation appeal bonds or judgments being appealed by an Assignor.

“Excluded Unperfected Collateral” shall mean and include (i) Excluded Deposit Accounts (other than the Cash Collateral Account), (ii) any motor vehicles or similar titled property a security interest over which may not be perfected by the filing of a UCC-1 financing statement in the

relevant jurisdiction, (iii) Patents, Trademarks and Copyrights acquired or issued after the date of this Agreement during (and only during) the period from such date of acquisition or issuance to and including the 15^th day following the date of the required delivery of a confirmatory grant of security interest therein pursuant to Section 4.6 or Section 5.6, as the case may be, (iv) during the 60 day period prior to the required delivery of a “control agreement” with respect to a Perfected Deposit Account pursuant to Section 3.9, the respective such Perfected Deposit Account and (v) any Collateral acquired after the Fourth Restatement Effective Date (or, if later, a given Trigger Date) during (and only during) the period from such date of acquisition thereof to and including the 15^th day following such acquisition.

“Existing Senior Notes” shall mean, collectively, (i) RJRTH’s 6.50% Notes due June 1, 2007 in an initial aggregate principal amount equal to $300,000,000, (ii) RJRTH’s 7.875% Notes due May 15, 2009 in an initial aggregate principal amount equal to $200,000,000, (iii) RJRTH’s 6.50% Notes due July 1, 2010 in an initial aggregate principal amount equal to $300,000,000, (iv) RJRTH’s 7.25% Notes due June 1, 2012 in an initial aggregate principal amount equal to $450,000,000, and (v) RJRTH’s 7.30% Notes due July 15, 2015 in an initial aggregate principal amount equal to $200,000,000, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“Existing Senior Notes Creditors” shall mean the Existing Senior Notes Trustee and the holders of the Existing Senior Notes.

“Existing Senior Notes Documents” shall mean the Existing Senior Notes and the Existing Senior Notes Indenture.

“Existing Senior Notes Exchange” shall have the meaning provided in the Pledge Agreement.

“Existing Senior Notes Indenture” shall mean, collectively, (i) the indenture, dated as of May 20, 2002, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee and (ii) the indenture, dated as of May 15, 1999, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“Existing Senior Notes Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Existing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the Existing Senior Notes Indenture.

“General Intangibles” mean “general intangibles” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, but excluding those General Intangibles constituting Excluded Contracts (other than any Receivable or any money(ies) due or to become due under any such Excluded Contract).

“Goods” shall mean “goods” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Health-Care-Insurance Receivable” shall mean any “health-care-insurance receivable” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Hedging Creditors” shall have the meaning provided in the recitals of this Agreement.

“Hedging Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Indemnitee” shall have the meaning provided in Section 8.1 hereof.

“Initial New Senior Notes” shall mean, collectively, (i) the Borrower’s 7.25% Senior Secured Notes due 2013 in an initial aggregate principal amount equal to $625,000,000, (ii) the Borrower’s 7.625% Senior Secured Notes due 2016 in an initial aggregate principal amount equal to $775,000,000, and (iii) the Borrower’s 7.75% Senior Secured Notes due 2018 in an initial aggregate principal amount equal to $250,000,000, in each case issued pursuant to the New Senior Notes Indenture, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“Instrument” shall mean “instrument” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York; provided that the term “Instrument” shall not include (x) any Instrument (as defined above in the absence of this proviso) pledged pursuant to the Pledge Agreement or (y) the LSB Note (as defined in the Pledge Agreement).

“Inventory” shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof and all accessions thereto, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same; in all stages of production — from raw materials through work-in-process to finished goods — and all products and proceeds of whatever sort and wherever located and any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s customers, and shall specifically include all “inventory” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor.

“Investment Property” shall mean “investment property” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, provided that the term “Investment Property” shall not include (i) Collateral (as defined in the Pledge Agreement) pledged pursuant to the Pledge Agreement or (ii) “investment property” excluded pursuant to the definition of “Investment Property” contained in the Pledge Agreement.

“Lender Creditors” shall have the meaning provided in the recitals of this Agreement.

          “Lender Secured Creditors” shall have the meaning provided in the recitals of this Agreement.

          “Lenders” shall have the meaning provided in the recitals of this Agreement.

“Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Liens” shall mean any security interest, mortgage, pledge, lien, claim, charge, encumbrance, title retention agreement, lessor’s interest in a financing lease or analogous instrument, in, of, or on an Assignor’s property.

“Location” of any Assignor, shall mean such Assignor’s “location” as determined pursuant to Section 9-307 of the UCC.

“Marks” shall mean all right, title and interest in and to any United States or foreign trademarks, service marks and trade names now held or hereafter acquired by any Assignor, including any registration or application for registration of any trademarks and service marks now held or hereafter acquired by an Assignor, which are registered in the United States Patent and Trademark Office or the equivalent thereof in any State of the United States or in any foreign country, as well as any unregistered marks used by any Assignor, and any trade dress including logos, designs, company names, business names, fictitious business names and other business identifiers used by any Assignor in the United States or any foreign country.

“New Senior Notes” shall mean (i) the Initial New Senior Notes, (ii) the Exchange Senior Notes and (iii) the Additional Senior Notes, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“New Senior Notes Creditors” shall mean the New Senior Notes Trustee and the holders of the New Senior Notes.

“New Senior Notes Documents” shall mean the New Senior Notes and the New Senior Notes Indenture.

“New Senior Notes Indenture” shall mean the Indenture, dated as of May 31, 2006, among the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“New Senior Notes Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“New Senior Notes Trustee” shall mean the trustee under the New Senior Notes Indenture.

“Non-U.S. Deposit Account” has the meaning provided in Section 3.9(a).

“Noticed Event of Default” shall mean (i) an Event of Default with respect to a Credit Party under Section 9.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Collateral Agent has given any Credit Agreement Party notice that such Event of Default constitutes a “Noticed Event of Default.”

“Notified Non-Credit Agreement Event of Default” means (i) the acceleration of the maturity of any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes or the failure to pay

at maturity any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, or the occurrence of any bankruptcy or insolvency Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, (ii) any Event of Default under a Secured Credit Card Agreement or (iii) any Event of Default under a Secured Hedging Agreement, in the case of any event described in clause (i), (ii) or (iii) to the extent the Existing Senior Notes Trustee, the New Senior Notes Trustee, the Refinancing Senior Notes Trustee, the relevant Credit Card Issuer or the relevant Hedging Creditor, as the case may be, has given written notice to the Collateral Agent that a “Notified Non-Credit Agreement Event of Default” exists; provided that such written notice may only be given if such Event of Default is continuing and, provided further, that any such Notified Non-Credit Agreement Event of Default shall cease to exist (I) once there is no longer any Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture, the Refinancing Senior Notes Indenture, the respective Secured Credit Card Agreement or the respective Secured Hedging Agreement, as the case may be, in existence, (II) in the case of an Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, after all Existing Senior Notes Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be, have been repaid in full, (III) in the case of an Event of Default under a Secured Credit Card Agreement or Secured Hedging Agreement, such Secured Credit Card Agreement or Secured Hedging Agreement, as the case may be, has been terminated and all Credit Card Obligations or Hedging Obligations, as the case may be, thereunder have been repaid in full, (IV) in the case of an Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, if the Existing Senior Notes Creditors, the New Senior Notes Creditors or the Refinancing Senior Notes Creditors, as the case may be, holding at least a majority of the aggregate principal amount of the outstanding Existing Senior Notes, New Senior Notes or the Refinancing Senior Notes, as the case may be, at such time have rescinded such written notice and (V) in the case of an Event of Default under a Secured Credit Card Agreement or Secured Hedging Agreement, the requisite Credit Card Issuers with Credit Card Obligations or Hedging Creditors with Hedging Obligations, as the case may be, thereunder at such time have rescinded such written notice.

“Obligations” shall mean (i) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Assignor, now existing or hereafter incurred under, arising out of or in connection with each Credit Document to which it is a party (including, without limitation, indemnities, fees and interest (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)) and the due performance and compliance by each Assignor with the terms of each such Credit Document (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Secured Hedging Agreements, being herein collectively called the “Credit Document Obligations”); (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Assignor, now existing or hereafter incurred under, arising out of or in

connection with each Secured Credit Card Agreement, including all obligations, if any, under a Guaranty in respect of any Secured Credit Card Agreement and all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding (all such obligations and indebtedness under this clause (ii) being herein collectively called the “Credit Card Obligations”); (iii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Assignor, now existing or hereafter incurred under, arising out of or in connection with each Secured Hedging Agreement, including all obligations, if any, under a Guaranty in respect of any Secured Hedging Agreement and all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding (all such obligations and indebtedness under this clause (iii) being herein collectively called the “Hedging Obligations”); (iv) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Assignor, now existing or hereafter incurred under, arising out of or in connection with each Existing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by each Assignor with the terms of each such Existing Senior Notes Document (all such obligations and liabilities under this clause (iv), being herein collectively called the “Existing Senior Notes Obligations”); (v) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each Assignor, now existing or hereafter incurred under, arising out of or in connection with each New Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by each Assignor with the terms of each such New Senior Notes Document (all such obligations and liabilities under this clause (v) being herein collectively called the “New Senior Notes Obligations”); (vi) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Ba nkruptcy Code, would become due) and liabilities of each Assignor, now existing or hereafter incurred under, arising out of or in connection with each Refinancing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for

post-petition interest is allowed in any such proceeding) and the due performance and compliance by each Assignor with the terms of each such Refinancing Senior Notes Document (all such obligations and liabilities under this clause (vi), being herein collectively called the “Refinancing Senior Notes Obligations”); (vii) any and all sums advanced by the Collateral Agent or Pledgee in order to preserve the Collateral or preserve its security interest in the Collateral; (viii) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of each Assignor referred to in clauses (i), (ii), (iii), (iv), (v), (vi) and (vii), after an Event of Default shall have occurred and be continuing, the reasonable expenses of re-taking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent or Pledgee of its rights hereunder, together with reasonable attorneys’ fees and court costs; and (ix) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 8.1 hereof.

“Patents” shall mean any United States or foreign patent with respect to which any Assignor now or hereafter has any right, title or interest, and any divisions, continuations (including, but not limited to, continuations-in-parts) and improvements thereof, as well as any application for a United States or foreign patent now or hereafter made by any Assignor.

“Perfected Deposit Account” shall mean, as to any Assignor, each Deposit Account of such Assignor other than an Excluded Deposit Account.

“Permits” shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations (including certificates of need) of or from any governmental authority or agency.

“Permitted Lien” shall mean the Liens permitted to be outstanding under Section 8.03 of the Credit Agreement (or, after the CA Termination Date, the Credit Agreement as in effect immediately prior to the occurrence of the CA Termination Date).

“Principal Property” shall have the meaning provided in the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture (in each case as in effect on the date hereof), as the context may require.

“Proceeds” shall have the meaning assigned that term under the Uniform Commercial Code as in effect in the State of New York on the date hereof or under other relevant law and, in any event, shall include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or an Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to an Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

“Pro Rata Share” shall have the meaning provided in Section 7.4(b) of this Agreement.

“RAI Senior Notes Obligations” shall mean, collectively, the New Senior Notes Obligations and the Refinancing Senior Notes Obligations.

“Receivable” shall mean any “account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State. Without limiting the foregoing, the term “account” shall include all Health-Care-Insurance Receivables.

“Refinancing Senior Notes” shall have the meaning provided in the Credit Agreement.

“Refinancing Senior Notes Creditors” shall mean the Refinancing Senior Notes Trustee and the holders of the Refinancing Senior Notes.

“Refinancing Senior Notes Documents” shall mean, collectively, the Refinancing Senior Notes and the Refinancing Senior Notes Indenture.

“Refinancing Senior Notes Indenture” shall mean one or more indentures entered into from time to time providing for the issuance of Refinancing Senior Notes by the Borrower, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

“Refinancing Senior Notes Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Refinancing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the Refinancing Senior Notes Indenture.

“Registered Organization” shall have the meaning provided in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Requisite Creditors” shall have the meaning provided in Section 10.2 hereof.

“Restricted Assignor” shall mean Lane and Santa Fe.

“RJRTH” shall have the meaning provided in the recitals to this Agreement.

“RJRTH Intercompany Note Creditor” shall have the meaning provided in the Pledge Agreement.

“RJRTH Intercompany Note Obligations” shall have the meaning provided in the Pledge Agreement.

“Secured Credit Card Agreement” shall have the meaning provided in the recitals of this Agreement.

“Secured Creditors” shall mean, collectively, the Lender Secured Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors.

“Secured Debt Agreements” shall mean each Credit Document, each Secured Credit Card Agreement, each Secured Hedging Agreement, each Existing Senior Notes Document, each New Senior Notes Document and each Refinancing Senior Notes Document.

          “Secured Hedging Agreements” shall have the meaning provided in the recitals of this Agreement.

“Security” shall mean “security” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Software” shall mean “software” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Specified Existing Senior Notes Assignor” shall mean the Borrower, RJRTH and each other Assignor with Existing Senior Notes Obligations that is a Restricted Subsidiary (as defined in the Existing Senior Notes Indenture).

“Specified RAI Senior Notes Assignor” shall mean the Borrower and each Assignor with RAI Senior Notes Obligations that is a Restricted Subsidiary (as defined in the New Senior Notes Indenture).

“Supporting Obligations” shall mean any “supporting obligation” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor, or in which any Assignor has any rights, and, in any event, shall include, but shall not be limited to all of such Assignor’s rights in any Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all security for, any Receivable, Chattel Paper, Document, General Intangible, Instrument or Investment Property.

“Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Termination Date” shall have the meaning provided in Section 10.9 hereof.

“Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is used in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Trade Secret Rights” shall mean the rights of an Assignor in any Trade Secret it holds.

“Trade Secrets” means any secretly held existing engineering and other data, information, production procedures and other know-how relating to the design, manufacture, assembly,

installation, use, operation, marketing, sale and servicing of any products or business of an Assignor worldwide whether written or not written.

“Unrestricted Assignor” shall mean each Assignor other than a Restricted Assignor.

ARTICLE X

MISCELLANEOUS

          10.1 Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile transmission or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered (including by way of overnight courier):

     (i) if to any Assignor, at its address contained in the Credit Agreement (for the Credit Agreement Parties) or the Subsidiary Guaranty (for the other Assignors);

     (ii) if to the Collateral Agent, at:

JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, New York 10017
Attn.: Raju Nanoo
Tel. No.: 212-270-2272
Fax. No.: 212-270-5120

     (iii) if to any Lender (other than the Collateral Agent), at such address as such Lender shall have specified in the Credit Agreement;

     (iv) if to any Credit Card Issuer, at such address as such Credit Card Issuer shall have specified in writing to the Assignors and the Collateral Agent;

     (v) if to any Hedging Creditor, at such address as such Hedging Creditor shall have specified in writing to the Assignors and the Collateral Agent;

     (vi) if to any Existing Senior Notes Creditor, at such address of the Existing Senior Notes Trustee as the Existing Senior Notes Trustee shall have specified in writing to the Assignors and the Collateral Agent;

     (vii) if to any New Senior Notes Creditor, at such address of the New Senior Notes Trustee as the New Senior Notes Trustee shall have specified in writing to the Assignors and the Collateral Agent;

     (viii) if to any Refinancing Senior Notes Creditor, at such address of the Refinancing Senior Notes Trustee as the Refinancing Senior Notes Trustee shall have specified in writing to the Assignors and the Collateral Agent;

or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. Except as otherwise expressly provided herein, all such notices and communications shall be deemed to have been duly given or made when received.

          10.2 Waiver; Amendment. (a) None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Collateral Agent (with the consent of (x) if prior to the CA Termination Date, the Required Lenders or, to the extent required by Section 12.12 of the Credit Agreement, all of the Lenders and (y) if on or after the CA Termination Date, the holders of a majority of the outstanding principal amount of the Obligations remaining outstanding) and each Assignor affected thereby (it being understood that the addition or release of any Assignor hereunder shall not constitute a change, waiver, modification or variance affecting any Assignor other than the Borrower and the Assignor so added or released), provided that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall require the written consent of the Requisite Creditors of such Class of Secured Creditors; provided, however, that technical modifications may be made to this Agreement without the consent of a given Class of Secured Creditors affected thereby if such modifications are intended to conform the Collateral pledge requirements of this Agreement with the pledge requirements of the relevant Secured Debt Agreements to which such Class of Secured Creditors is a party. For the purpose of this Agreement, the term “Class” shall mean each class of Secured Creditors, i.e., whether (1) the Lender Creditors as holders of the Credit Document Obligations, (2) the Credit Card Issuers as holders of the Credit Card Obligations, (3) the Hedging Creditors as holders of the Hedging Obligations, (4) the Existing Senior Notes Creditors as holders of the Existing Senior Notes Obligations, (5) the New Senior Notes Creditors as holders of the New Senior Notes Obligations or (6) the Refinancing Senior Notes Creditors as holders of the Refinancing Senior Notes Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of any Class shall mean each of (1) with respect to each of the Credit Document Obligations, the Required Lenders, (2) with respect to the Credit Card Obligations, the holders of at least a majority of all Credit Card Obligations outstanding from time to time, (3) with respect to the Hedging Obligations, the holders of at least a majority of all Hedging Obligations outstanding from time to time, (4) with respect to the Existing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Existing Senior Notes, (5) with respect to the New Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the New Senior Notes and (6) with respect to the Refinancing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Refinancing Senior Notes.

          (b) No delay on the part of the Collateral Agent in exercising any of its rights, remedies, powers and privileges hereunder or partial or single exercise thereof, shall constitute a waiver thereof. No notice to or demand on any Assignor shall constitute a waiver of any of the rights of the Collateral Agent to any other or further action without notice or demand to the extent such action is permitted to be taken by the Collateral Agent without notice or demand under the terms of this Agreement.

          10.3 Obligations Absolute. The obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of any Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement, any other Credit Document or any other Secured Debt Agreement, except as specifically set forth in a waiver granted pursuant to Section 10.2 hereof; or (c) any amendment to or modification of any other Credit Document or any other Secured Debt Agreement or any security for any of the Obligations; whether or not any Assignor shall have notice or knowledge of any of the foregoing. The rights and remedies of the Collateral Agent herein provided are cumulative and not exclusive of any rights or remedies which the Collateral Agent would otherwise have.

          10.4 Successors and Assigns. This Agreement shall be binding upon each Assignor and its successors and assigns and shall inure to the benefit of the Collateral Agent and its successors and assigns. All agreements, statements, representations and warranties made by such Assignor herein or in any certificate or other instrument delivered by each Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement, the other Credit Documents and the other Secured Debt Agreements, regardless of any investigation made by the Secured Creditors on their behalf.

          10.5 Headings Descriptive. The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

          10.6 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

          10.7 Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of New York.

          10.8 Assignors’ Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral.

          10.9 Termination; Release. (a) After the Termination Date (as defined below), this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation, in Article VIII hereof shall survive any such termination) and the Collateral Agent, at the request and expense of the respective Assignor, will execute and deliver to such Assignor a proper instrument or instruments acknowledging the satisfaction and termination of this

Agreement as provided above, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Collateral Agent hereunder. As used in this Agreement, (i) “CA Termination Date” shall mean the date upon which the Total Commitment has been terminated, no Letter of Credit or Note under the Credit Agreement is outstanding and all other Credit Document Obligations have been paid in full in cash (other than arising from indemnities for which no request for payment has been made) and (ii) “Termination Date” shall mean the date upon which (x) the CA Termination Date shall have occurred and (y) if (but only if) a Notified Non-Credit Agreement Event of Default shall have occurred and be continuing on the CA Termination Date (and after giving effect thereto), either (I) such Notified Non-Credit Agreement Event of Default shall have been cured or waived by the requisite holders of the relevant Obligations subject to such Notified Non-Credit Agreement Event of Default or (II) all Secured Credit Card Agreements and Secured Hedging Agreements (if any) giving rise to a Notified Non-Credit Agreement Event of Default shall have been terminated and all Obligations subject to such Notified Non-Credit Agreement Event of Default shall have been paid in full (other than arising from indemnities for which no request for payment has been made).

          (b) So long as no Notified Non-Credit Agreement Event of Default has occurred and is continuing, in the event that (x) prior to the CA Termination Date, (i) any part of the Collateral is sold or otherwise disposed of in connection with a sale or other disposition permitted by Section 8.02 of the Credit Agreement (it being agreed for such purposes that a release will be deemed “permitted by Section 8.02 of the Credit Agreement” if the proposed transaction constitutes an exception to Section 8.02 of the Credit Agreement) or (ii) all or any part of the Collateral is released at the direction of the Required Lenders (or all the Lenders if required by Section 12.12 of the Credit Agreement), and the proceeds of such sale or disposition or from such release (if any) are applied in accordance with the terms of the Credit Agreement to the extent required to be so applied or (y) on and after the CA Termination Date, any part of the Collateral is sold or otherwise disposed of without violating the Existing Senior Notes Documents, the New Senior Notes Documents, the Refinancing Senior Notes Documents, the Secured Credit Card Agreements and the Secured Hedging Agreements, the Collateral Agent, at the request and expense of the respective Assignor will release such Collateral from this Agreement, duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in possession of the Collateral Agent and has not theretofore been released pursuant to this Agreement (it being understood and agreed that upon the release of all or any portion of the Collateral by the Collateral Agent at the direction of the Lenders as provided above, the Lien on the Collateral in favor of the Credit Card Issuers, the Hedging Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors shall automatically be released).

          (c) In addition to the foregoing, all Collateral shall be automatically released (subject to reinstatement upon the occurrence of a new Trigger Event) in accordance with Section 7.10(i) of the Credit Agreement.

          (d) At any time that the relevant Assignor desires that the Collateral Agent take any action to give effect to any release of Collateral pursuant to the foregoing Section 10.9(a), (b) or (c), it shall deliver to the Collateral Agent a certificate signed by an authorized officer describing the Collateral to be released and certifying its entitlement to a release pursuant to the applicable provisions of Sections 10.9(a), (b) or (c) and in such case the Collateral Agent, at the request and expense of such Assignor, will execute such documents as required to duly release such Collateral and to assign, transfer and deliver to such Assignor or its designee (without recourse and without any representation or warranty) such of the Collateral as is then being released and as may be in the possession of the Collateral Agent. The Collateral Agent shall have no liability whatsoever to any Secured Creditor as the result of any release of Collateral by it as permitted by (or which the Collateral Agent in good faith believes to be permitted by) this Section 10.9. Upon any release of Collateral pursuant to Section 10.9(a), (b) or (c), so long as no Noticed Event of Default is then in existence, none of the Secured Creditors shall have any continuing right or interest in such Collateral, or the proceeds thereof (subject to reinstatement rights upon the occurrence of a new Trigger Event in the case of a release pursuant to Section 10.9(c)).

          10.10 Collateral Agent. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. By accepting the benefits of this Agreement, each Secured Creditor acknowledges and agrees that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and Annex M hereto. The Collateral Agent shall act hereunder on the terms and conditions set forth in Section 11 of the Credit Agreement and in Annex M hereto, the terms of which shall be deemed incorporated herein by reference as fully as if the same were set forth herein in their entirety. In the event that any provision set forth in Section 11 of the Credit Agreement in respect of the Collateral Agent conflicts with any provision set forth in Annex M hereto, the provisions of Annex M hereto shall govern (except that the Lenders shall remain obligated to indemnify the Collateral Agent pursuant to Section 11 of the Credit Agreement, to the extent the Collateral Agent is not indemnified by Secured Creditors pursuant to Annex M). Notwithstanding anything to the contrary contained in Section 10.2 of this Agreement, this Section 10.10, and the duties and obligations of the Collateral Agent set forth in this Section 10.10, may not be amended or modified without the consent of the Collateral Agent.

          10.11 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Collateral Agent.

          10.12 Additional Assignors. It is understood and agreed that any Subsidiary of the Borrower that is required to become a party to this Agreement after the date hereof pursuant to the requirements of the Credit Agreement shall become an Assignor hereunder by (x) executing a counterpart hereof and/or an assumption agreement in form and substance satisfactory to the Collateral Agent, (y) delivering supplements to Annexes A through F hereto and Annexes I, J and K hereto, as are necessary to cause such Annexes to be complete and accurate with respect to such additional Assignor on such date and (z) taking all actions as

specified in this Agreement and the Credit Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and action required above to be taken to the reasonable satisfaction of the Collateral Agent.

          10.13 No Third Party Beneficiaries. This Agreement is entered into solely for the benefit of the parties hereto and their respective successors and assigns and for the benefit of the Secured Creditors from time to time and their respective successors and assigns and, except for the Secured Creditors and their successors and assigns, there shall be no third party beneficiaries hereof, nor shall any Person other than the parties hereto and their respective successors and assigns, and the Secured Creditors and their respective successors and assigns, be entitled to enforce the provisions hereof or have any claims against any party hereto (or any Secured Creditor) or their successors and assigns arising from, or under, this Agreement.

          10.14 Amendment and Restatement. Each of the Collateral Agent and each of the Assignors hereby acknowledges and agrees that from and after the Fourth Restatement Effective Date, this Agreement amends, restates and supersedes the First Amended and Restated Security Agreement in its entirety.

*           *           *

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

REYNOLDS AMERICAN INC., as an       Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer

R.J. REYNOLDS TOBACCO HOLDINGS,       INC., as an Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer

R.J. REYNOLDS TOBACCO COMPANY, as       an Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Senior Vice President & Treasurer

RJR ACQUISITION CORP., as an Assignor
By:	/s/ McDara P. Folan, III
	Name:	McDara P. Folan, III
	Title:	Vice President & Assistant Secretary

GMB, INC., as an Assignor
By:	By:  /s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Treasurer

FHS, INC., as an Assignor
By:	/s/ Kathryn A. Premo
	Name:	Kathryn A. Premo
	Title:	Treasurer

R. J. REYNOLDS TOBACCO CO., as an       Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

SANTA FE NATURAL TOBACCO       COMPANY, INC., as an Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Assistant Treasurer

LANE LIMITED, as an Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Assistant Treasurer

CONWOOD COMPANY, L.P., as an Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

CONWOOD SALES CO., L.P., as an Assignor
By:	Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

ROSSWIL LLC, as an Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

CONWOOD HOLDINGS, INC., as an Assignor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title:	Vice President & Treasurer

NA HOLDINGS Inc., as an Assignor
By:	/s/ McDara P. Folan, III
	Name:	McDara P. Folan III
	Title:	President

Acknowledged And Agreed:

JPMORGAN CHASE BANK,
     as Collateral Agent and Assignee

By	/s/ Robert T. Sacks
	Name:	Robert T. Sacks
	Title:	Managing Director

ANNEX G

TO

SECURITY AGREEMENT

ASSIGNMENT OF SECURITY INTEREST IN UNITED STATES
PATENTS AND TRADEMARKS

FOR GOOD AND VALUABLE CONSIDERATION, the sufficiency and receipt of which are hereby acknowledged, [___], a [___] corporation (the “Assignor”) with principal offices at                                         , hereby assigns and grants to JPMORGAN CHASE BANK, N.A., as Collateral Agent, with principal offices at 270 Park Avenue, New York, New York 10017 (the “Assignee”), a security interest in (i) all of Assignor’s right, title and interest in and to Assignor’s trademarks, trademark registrations, and trademark applications more particularly set forth on Schedule A attached hereto (the “Marks”), and all renewals thereof, (ii) all of the Assignor’s right, title and interest in and to the patents and patent applications (the “Patents”) set forth on Schedule B attached hereto, in each case together with (iii) all Proceeds (as such term is defined in the Security Agreement referred to below) of the Marks and Patents, (iv) the goodwill of the business(es) with which the Marks are associated and (v) all causes of action arising prior to or after the date hereof for infringement of any of the Marks and Patents or unfair competition regarding the same.

This ASSIGNMENT OF SECURITY INTEREST is made to secure the satisfactory performance and payment of all the Obligations of the Assignor, as such term is defined in the Security Agreement, among the Assignor, the other assignors from time to time party thereto and the Assignee, dated as of July 15, 2003, amended and restated as of July 30, 2004, and as further amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, modified, restated and/or supplemented from time to time, the “Security Agreement”) and shall be effective as of the date of the Security Agreement. Upon the termination of the Security Agreement pursuant to Section 10.9(a) of the Security Agreement, the Assignee shall, upon satisfaction, execute, acknowledge, and deliver to the Assignor an instrument in writing releasing the security interest in the Marks acquired under this Assignment of Security Interest.

This Assignment of Security Interest has been granted in conjunction with the security interest granted to Assignee under the Security Agreement. The rights and remedies of the Assignee with respect to the security interest granted herein are without prejudice to, and are in addition to those set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Assignment of Security Interest are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.

*      *      *

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Page 2

IN WITNESS WHEREOF, the undersigned have executed this Assignment of Security Interest as of the ___ day of ___,___.

[                    ],       as Assignor
By:
	Name:
	Title:

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Page 3

JPMORGAN CHASE BANK, N.A.,       as Collateral Agent, and as Assignee
By:
	Name:
	Title:

STATE OF NEW YORK	)
	) ss.:
COUNTY OF NEW YORK	)

On this ___ day of ___, ___, before me personally came                                          who, being duly sworn, did depose and say that [s]he is                                          of [___], that [s]he is authorized to execute the foregoing Assignment of Security Interest on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation.

Notary Public 

STATE OF NEW YORK	)
	) ss.:
COUNTY OF NEW YORK	)

On this ___ day of ___, ___, before me personally came                                          who, being by me duly sworn, did state as follows: that [s]he is                                          of JPMorgan Chase Bank, N.A., that [s]he is authorized to execute the foregoing Assignment of Security Interest on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation.

Notary Public 

ANNEX H

TO

SECURITY AGREEMENT

FORM OF ASSIGNMENT OF SECURITY INTEREST
IN CERTAIN COPYRIGHTS

WHEREAS,                                                            , a                                           corporation (the “Assignor”), having its chief executive office at                                                             , is the owner of all right, title and interest in and to the copyrights and associated copyright registrations and applications for registration set forth in Schedule A attached hereto;

WHEREAS, JPMORGAN CHASE BANK, N.A., as Collateral Agent, having its principal offices at 270 Park Avenue, New York, NY 10017 (the “Assignee”), desires to acquire a security interest in said copyrights and copyright registrations and applications therefor; and

WHEREAS, the Assignor is willing to assign to the Assignee, and to grant to the Assignee a security interest in and lien upon the copyrights and copyright registrations and applications therefor described above.

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, and subject to the terms and conditions of the Security Agreement, dated as of July 15, 2003. as amended and restated as of July 30, 2004, and as further amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, modified, restated and/or supplemented from time to time, the “Security Agreement”), the Assignor hereby assigns to the Assignee, and grants to the Assignee a security interest in the copyrights and copyright registrations and applications therefor set forth in Schedule A attached hereto (the “Copyrights”), together with all Proceeds (as such terms is defined in the Security Agreement) of the Copyrights.

This Assignment of Security Interest (this “Assignment”) has been granted in conjunction with the security interest granted to the Assignee under the Security Agreement. The rights and remedies of the Assignee with respect to the security interest granted herein are without prejudice to, and are in addition to those set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Assignment are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.

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Page 2

     Executed at New York, New York, the ___ day of ___, ___.

	,
Assignor

By
	Name
	Title:

JPMORGAN CHASE BANK, N.A., as Collateral Agent, as Assignee
By
	Name:
	Title:

STATE OF NEW YORK	)
	) ss.:
COUNTY OF NEW YORK	)

On this ___ day of ___, ___, before me personally came                                                              , who being duly sworn, did depose and say that [s]he is                                          of                                          , that [s]he is authorized to execute the foregoing Assignment on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation.

Notary Public 

STATE OF NEW YORK	)
	) ss.:
COUNTY OF NEW YORK	)

On this ___day of ___, ___, before me personally came                                                              , who being duly sworn, did depose and say that [s]he is                                                              of JPMORGAN CHASE BANK, N.A., that [s]he is authorized to execute the foregoing Assignment on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation.

Notary Public 

ANNEX L

TO

SECURITY AGREEMENT

Form of Control Agreement Regarding Deposit Accounts

AGREEMENT (as amended, modified or supplemented from time to time, this “Agreement”), dated as of ___, ___, among the undersigned assignor (the “Assignor”), JPMORGAN CHASE BANK, N.A., not in its individual capacity but solely as Collateral Agent (in such capacity and together with its successors or assigns in such capacity, the “Collateral Agent”), and                      (the “Deposit Account Bank”), as the bank (as defined in Section 9-102 of the UCC as in effect on the date hereof in the State of                                          (the “UCC”)) with which one or more deposit accounts (as defined in Section 9-102 of the UCC) are maintained by the Assignor (with all such deposit accounts now or at any time in the future maintained by the Assignor with the Deposit Account Bank being herein called the “Deposit Accounts”).

W I T N E S S E T H :

WHEREAS, the Assignor, various other Assignors and the Collateral Agent have entered into a Security Agreement, dated as of July 15, 2003, as amended and restated as of July 30, 2004, and as further amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, modified, restated and/or supplemented from time to time, the “Security Agreement”), under which, among other things, in order to secure the payment of the Obligations (as defined in the Security Agreement), the Assignor has granted a security interest to the Collateral Agent for the benefit of the Secured Creditors (as defined in the Security Agreement) in all of the right, title and interest of the Assignor in and into any and all deposit accounts (as defined in Section 9-102 of the UCC) and in all moneys, securities, instruments and other investments deposited therein from time to time (collectively, herein called the “Collateral”); and

WHEREAS, the Assignor desires that the Deposit Account Bank enter into this Agreement in order to establish “control” (as defined in Section 9-104 of the UCC) in each Deposit Account at any time or from time to time maintained with the Deposit Account Bank, and to provide for the rights of the parties under this Agreement with respect to such Deposit Accounts;

NOW THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

          1. Assignor’s Dealings with Deposit Accounts; Notice of Exclusive Control. Until the Deposit Account Bank shall have received from the Collateral Agent a Notice of Exclusive Control (as defined below), the Assignor shall be entitled to present items drawn on and otherwise to withdraw or direct the disposition of funds from the Deposit Accounts and give

Annex L
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instructions in respect of the Deposit Accounts; provided, however, that the Assignor may not, and the Deposit Account Bank agrees that it shall not permit the Assignor to, without the Collateral Agent’s prior written consent, close any Deposit Account. If the Collateral Agent shall give to the Deposit Account Bank a notice of the Collateral Agent’s exclusive control of the Deposit Accounts, which notice states that it is a “Notice of Exclusive Control” (a “Notice of Exclusive Control”), only the Collateral Agent shall be entitled to withdraw funds from the Deposit Accounts, to give any instructions in respect of the Deposit Accounts and any funds held therein or credited thereto or otherwise to deal with the Deposit Accounts.

          2. Collateral Agent’s Right to Give Instructions as to Deposit Accounts. (a) Notwithstanding the foregoing or any separate agreement that the Assignor may have with the Deposit Account Bank, the Collateral Agent shall be entitled, for purposes of this Agreement, at any time following the delivery of a Notice of Exclusive Control to give the Deposit Account Bank instructions as to the withdrawal or disposition of any funds from time to time credited to any Deposit Account, or as to any other matters relating to any Deposit Account or any other Collateral, without further consent from the Assignor. The Assignor hereby irrevocably authorizes and instructs the Deposit Account Bank, and the Deposit Account Bank hereby agrees, to comply with any such instructions from the Collateral Agent without any further consent from the Assignor. Such instructions may include the giving of stop payment orders for any items being presented to any Deposit Account for payment. The Deposit Account Bank shall be fully entitled to rely on, and shall comply with, such instructions from the Collateral Agent even if such instructions are contrary to any instructions or demands that the Assignor may give to the Deposit Account Bank. In case of any conflict between instructions received by the Deposit Account Bank from the Collateral Agent and the Assignor, the instructions from the Collateral Agent shall prevail.

(b) It is understood and agreed that the Deposit Account Bank’s duty to comply with instructions from the Collateral Agent regarding the Deposit Accounts is absolute, and the Deposit Account Bank shall be under no duty or obligation, nor shall it have the authority, to inquire or determine whether or not such instructions are in accordance with the Security Agreement or any other Credit Document (as defined in the Security Agreement), nor seek confirmation thereof from the Assignor or any other Person.

3. Assignor’s Exculpation and Indemnification of Depository Bank. The Assignor hereby irrevocably authorizes and instructs the Deposit Account Bank, at any time following the delivery of a Notice of Exclusive Control, to follow instructions from the Collateral Agent regarding the Deposit Accounts even if the result of following such instructions from the Collateral Agent is that the Deposit Account Bank dishonors items presented for payment from any Deposit Account. The Assignor further confirms that the Deposit Account Bank shall have no liability to the Assignor for wrongful dishonor of such items in following such instructions from the Collateral Agent. The Deposit Account Bank shall have no duty to inquire or determine whether the Assignor’s obligations to the Collateral Agent are in default or whether the Collateral Agent is entitled, under any separate agreement between the Assignor and the Collateral Agent, to give any such instructions. The Assignor further agrees to be responsible for the Deposit Account Bank’s customary charges and to indemnify the Deposit Account Bank from and to hold the Deposit Account Bank harmless against any loss, cost or expense that the

Annex L
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Deposit Account Bank may sustain or incur in acting upon instructions which the Deposit Account Bank believes in good faith to be instructions from the Collateral Agent.

4. Subordination of Security Interests; Deposit Account Bank’s Recourse to Deposit Accounts. The Deposit Account Bank hereby subordinates any claims and security interests it may have against, or with respect to, any Deposit Account at any time established or maintained with it by the Assignor (including any amounts, investments, instruments or other Collateral from time to time on deposit therein) to the security interests of the Collateral Agent (for the benefit of the Secured Creditors) therein, and agrees that no amounts shall be charged by it to, or withheld or set-off or otherwise recouped by it from, any Deposit Account of the Assignor or any amounts, investments, instruments or other Collateral from time to time on deposit therein; provided that the Deposit Account Bank may, however, from time to time debit the Deposit Accounts for any of its customary charges in maintaining the Deposit Accounts or for reimbursement for the reversal of any provisional credits granted by the Deposit Account Bank to any Deposit Account, to the extent, in each case, that the Assignor has not separately paid or reimbursed the Deposit Account Bank therefor.

5. Representations, Warranties and Covenants of Deposit Account Bank. The Deposit Account Bank represents and warrants to the Collateral Agent that:

          (a) The Deposit Account Bank constitutes a “bank” (as defined in Section 9-102 of the UCC) and that the jurisdiction (determined in accordance with Section 9-304 of the UCC) of the Deposit Account Bank for purposes of each Deposit Account maintained by the Assignor with the Deposit Account Bank shall be one or more States within the United States.

          (b) The Deposit Account Bank shall not permit any Assignor to establish any demand, time, savings, passbook or other account with it which it does not constitute a Deposit Account (as defined in Section 9-102 of the UCC).

(c) The account agreements between the Deposit Account Bank and the Assignor relating to the establishment and general operation of the Deposit Accounts provide, whether specifically or generally, that the laws of                                          govern secured transactions relating to the Deposit Accounts and that the Deposit Account Bank’s “jurisdiction” for purposes of Section 9-304 of the UCC in respect of the Deposit Accounts is                                         . The Deposit Account Bank will not, without the Collateral Agent’s prior written consent, amend any such account agreement so that the Deposit Account Bank’s jurisdiction for purposes of Section 9-304 of the UCC is other than a jurisdiction permitted pursuant to preceding clause (a). All account agreements in respect of each Deposit Account in existence on the date hereof are listed on Annex A hereto and copies of all such account agreements have been furnished to the Collateral Agent. The Deposit Account Bank will promptly furnish to the Collateral Agent a copy of the account agreement for each Deposit Account hereafter established by the Deposit Account Bank for the Assignor.

(d) The Deposit Account Bank has not entered and will not enter, into any agreement with any other Person by which the Deposit Account Bank is obligated to comply with instructions from such other Person as to the disposition of funds from any Deposit Account or other dealings with any Deposit Account or other of the Collateral.

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Page 4

(e) On the date hereof, the Deposit Account Bank maintains no Deposit Accounts for the Assignor other than the Deposit Accounts specifically identified in Annex A hereto.

(f) Any items or funds received by the Deposit Account Bank for the Assignor’s account will be credited to said Deposit Accounts specified in paragraph (e) above or to any other Deposit Accounts hereafter established by the Deposit Account Bank for the Assignor in accordance with this Agreement.

6. Deposit Account Statements and Information. The Deposit Account Bank agrees, and is hereby authorized and instructed by the Assignor, to furnish to the Collateral Agent upon its reasonable request, at its address indicated below, copies of all account statements and other information relating to each Deposit Account that the Deposit Account Bank sends to the Assignor and to disclose to the Collateral Agent all other information reasonably requested by the Collateral Agent regarding any Deposit Account. The Collateral Agent, for its part, agrees not to make any request for information pursuant to this Section 6 unless a Default or Event of Default has occurred and is continuing.

7. Conflicting Agreements. This Agreement shall have control over any conflicting agreement between the Deposit Account Bank and the Assignor.

8. Merger or Consolidation of Deposit Account Bank. Without the execution or filing of any paper or any further act on the part of any of the parties hereto, any bank into which the Deposit Account Bank may be merged or with which it may be consolidated, or any bank resulting from any merger to which the Deposit Account Bank shall be a party, shall be the successor of the Deposit Account Bank hereunder and shall be bound by all provisions hereof which are binding upon the Deposit Account Bank and shall be deemed to affirm as to itself all representations and warranties of the Deposit Account Bank contained herein.

9. Notices.

(a) All notices and other communications provided for in this Agreement shall be in writing (including facsimile) and sent to the intended recipient at its address or telex or facsimile number set forth below:

If to the Collateral Agent, at:

JPMorgan Chase Bank, N.A.
270 Park Avenue
New York, New York 10017
Attn.: Raju Nanoo
Tel. No.: 212-270-2272
Fax. No.: 212-270-5120

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Page 5

If to the Assignor, at:

If to the Deposit Account Bank, at:

or, as to any party, to such other address or telex or facsimile number as such party may designate from time to time by notice to the other parties.

(b) Except as otherwise provided herein, all notices and other communications hereunder shall be delivered by hand or by commercial overnight courier (delivery charges prepaid), or mailed, postage prepaid, or telexed or faxed, addressed as aforesaid, and shall be effective (i) three business days after being deposited in the mail (if mailed), (ii) when delivered (if delivered by hand or courier) and (iii) or when transmitted with receipt confirmed (if telexed or faxed); provided that notices to the Collateral Agent shall not be effective until actually received by it.

10. Amendment. This Agreement may not be amended, modified or supplemented except in writing executed and delivered by all the parties hereto.

11. Binding Agreement. This Agreement shall bind the parties hereto and their successors and assign and shall inure to the benefit of the parties hereto and their successors and assigns. Without limiting the provisions of the immediately preceding sentence, the Collateral Agent at any time or from time to time may designate in writing to the Deposit Account Bank a successor Collateral Agent (at such time, if any, as such entity becomes the Collateral Agent under the Security Agreement, or at any time thereafter) who shall thereafter succeed to the rights of the existing Collateral Agent hereunder and shall be entitled to all of the rights and benefits provided hereunder.

12. Continuing Obligations. The rights and powers granted herein to the Collateral Agent have been granted in order to protect and further perfect its security interests in the Deposit Accounts and other Collateral and are powers coupled with an interest and will be affected neither by any purported revocation by the Assignor of this Agreement or the rights granted to the Collateral Agent hereunder or by the bankruptcy, insolvency, conservatorship or receivership of the Assignor or the Deposit Account Bank or by the lapse of time. The rights of the Collateral Agent hereunder and in respect of the Deposit Accounts and the other Collateral, and the obligations of the Assignor and Deposit Account Bank hereunder, shall continue in effect until the security interests of Collateral Agent in the Deposit Accounts and such other Collateral have been terminated and the Collateral Agent has notified the Deposit Account Bank of such termination in writing.

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13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

14. Counterparts. This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts.

*      *       *

ANNEX M

THE COLLATERAL AGENT¹

1. Appointment. The Secured Creditors, by their acceptance of the benefits of the Security Agreement to which this Annex M is attached (the “Security Agreement”) hereby irrevocably designate JPMorgan Chase Bank, N.A., (and any successor Collateral Agent) to act as specified herein and therein. Each Secured Creditor hereby irrevocable authorizes, and each holder of any Obligation by the acceptance of such Obligation and by the acceptance of the benefits of the Security Agreement shall be deemed irrevocably to authorize, the Collateral Agent to take such action on its behalf under the provisions of the Security Agreement and any instruments and agreements referred to therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Collateral Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Collateral Agent may perform any of its duties hereunder or thereunder by or through its authorized agents, sub-agents or employees. The Collateral Agent, for itself and its successors and assigns, hereby accepts such appointment created hereby upon the terms and conditions specified herein.

2. Nature of Duties. (a) The Collateral Agent shall have no duties or responsibilities except those expressly set forth herein or in the Security Agreement. The duties of the Collateral Agent shall be mechanical and administrative in nature; the Collateral Agent shall not have by reason of this Agreement, any other Credit Document or any other Secured Debt Agreement a fiduciary relationship in respect of any Secured Creditor; and nothing in this Agreement, any other Credit Document or any other Secured Debt Agreement, expressed or implied, is intended to or shall be so construed as to impose upon the Collateral Agent any obligations in respect of the Security Agreement except as expressly set forth herein and therein.

          (b) The Collateral Agent shall not be responsible for insuring the Collateral or for the payment of taxes, charges or assessments or discharging of Liens upon the collateral or otherwise as to the maintenance of the Collateral.

          (c) The Collateral Agent shall not be required to ascertain or inquire as to the performance by any Assignor of any of the covenants or agreements contained in the Security Agreement, any other Credit Document or any other Secured Debt Agreement.

          (d) The Collateral Agent shall be under no obligation or duty to take any action under, or with respect to, the Security Agreement if taking such action (i) would subject the Collateral Agent to a tax in any jurisdiction where it is not then subject to a tax or (ii) would require the Collateral Agent to qualify to do business, or obtain any license, in any jurisdiction where it is not then so qualified or licensed or (iii) would subject the Collateral Agent to in personam jurisdiction in any locations where it is not then so subject.

          (e) Notwithstanding any other provision of this Annex M, neither the Collateral Agent nor any of its officers, directors, employees, affiliates or agents shall, in its individual capacity, be personally liable for any action taken or omitted to be taken by it in accordance

¹ Unless otherwise defined herein, all capitalized terms used herein (x) and defined in the Security Agreement, are used herein as therein defined and (y) not defined in the Security Agreement, are used herein as defined in the Credit Agreement referenced in the Security Agreement.

Annex M
Page 2

with, or pursuant to this Annex M of, the Security Agreement, unless caused by its or their own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

          (f) Notwithstanding any other provision of the Security Agreement or this Annex M, the Collateral Agent shall not be responsible or liable for perfecting, or maintaining the priority of, the Liens created pursuant to the Security Agreement.

          3. Lack of Reliance on the Collateral Agent. Independently and without reliance upon the Collateral Agent, each Secured Creditor, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of each Assignor and its Subsidiaries in connection with the making and the continuance of the Obligations and the taking or not taking of any action in connection therewith, and (ii) its own appraisal of the creditworthiness of each Assignor and its Subsidiaries, and the Collateral Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Secured Creditor with any credit or other information with respect thereto, whether coming into its possession before the extension of any Obligations or the purchase of any Notes, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes or at any time or times thereafter. The Collateral Agent shall not be responsible or liable in any manner whatsoever to any Secured Creditor for the correctness of any recitals, statements, information, representations or warranties herein, in the other Secured Debt Agreements or in any document, certificate or other writing delivered in connection herewith or therewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of the Security Agreement or the security interests granted thereunder or the financial condition of any Assignor or any Subsidiary of any Assignor or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of the Security Agreement or any other Secured Debt Agreement, or the financial condition of any Assignor or any Subsidiary of any Assignor, or the existence or possible existence of any Default or Event of Default under any Secured Debt Agreement. The Collateral Agent makes no representations as to the value or condition of the Collateral or any part thereof, or as to the title of any Assignor thereto or as to the security afforded by the Security Agreement.

          4. Certain Rights of the Collateral Agent. (a) No Secured Creditor shall have the right to take any action with respect to (or against) any Collateral, or cause the Collateral Agent to take any action with respect to (or against) any Collateral, with only the Required Lenders (or in the specific circumstances contemplated by (and subject to the terms of) Section 7.1, the holders of a majority of the Applicable Obligations) having the right to direct the Collateral Agent (such holders of Obligations so entitled to direct the Collateral Agent, the “Required Secured Creditors”) by written instruction in accordance with Section 4(d) hereof to take any such action. Except for actions required to be taken by the Collateral Agent in accordance with the Security Agreement, if the Collateral Agent shall request instructions from the Required Secured Creditors with respect to any act or action (including failure to act) in connection with the Security Agreement and the Required Secured Creditors shall fail to instruct the Collateral Agent with respect to any act or action (including failure to act and refrain from acting) in connection with the Security Agreement, the Collateral Agent shall be entitled to refrain from such act or taking such action unless and until it shall have received express instructions from the

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Required Secured Creditors and to the extent requested, appropriate indemnification in respect of actions to be taken, and the Collateral Agent shall not incur liability to any Secured Creditor or any other Person by reason of so refraining. Without limiting the foregoing, (x) no Secured Creditor shall have any right of action whatsoever against the Collateral Agent as a result of the Collateral Agent acting or refraining from acting hereunder or under the Security Agreement in accordance with the instructions of the Required Secured Creditors or as expressly provided in the Security Agreement and (y) without limiting preceding clause (x), the Collateral Agent shall not be liable to any Secured Creditor or any other Person for any action taken or omitted to be taken by it hereunder or under the Security Agreement, unless caused by its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

(b) Notwithstanding anything to the contrary contained herein (and subject to Section 2(f) of this Annex M), the Collateral Agent is authorized, but not obligated, (i) to take any action reasonably required to perfect or continue the perfection of the liens on the Collateral for the benefit of the relevant Secured Creditors and (ii) when instructions from the Required Secured Creditors have been requested by the Collateral Agent but have not yet been received, to take any action which the Collateral Agent, in good faith, believes to be reasonably required to promote and protect the interests of the Secured Creditors in the Collateral; provided that once instructions have been received, the actions of the Collateral Agent shall be governed thereby and the Collateral Agent shall not take any further action which would be contrary thereto.

(c) Notwithstanding anything to the contrary contained herein or in the Security Agreement, the Collateral Agent shall not be required to take or refrain from taking, and shall have no liability to any Secured Creditor for taking or refraining from taking, any action that exposes or, in the good faith judgment of the Collateral Agent may expose, the Collateral Agent or its officers, directors, agents or employees to personal liability, unless the Collateral Agent shall be adequately indemnified as provided herein or that is, or in the good faith judgment of the Collateral Agent may be, contrary to the Security Agreement, any other Secured Debt Agreement or applicable law.

(d) For purposes of the Security Agreement, each Secured Creditor shall appoint a Person as such Secured Creditor’s authorized representative (each, an “Authorized Representative”) for the purpose of giving or delivering any notices or instructions thereunder. Any instructions given by the Required Secured Creditors to the Collateral Agent pursuant to the Security Agreement shall be in writing signed by the Authorized Representative(s) of the various Secured Creditors comprising the Required Secured Creditors with respect to such instructions and such instructions shall certify to and for the benefit of the Collateral Agent that the Secured Creditors issuing or delivering such instructions constitute the Required Secured Creditors for purposes of this Section 4 and the instructions being delivered. The Collateral Agent shall be entitled to conclusively and absolutely rely on such instructions and certification as to the identity of the Required Secured Creditors with respect to such instructions, and the Collateral Agent shall not be required to take any action, and shall not be liable to any Secured Creditor for failing or refusing to act, pursuant to any instructions which are not given or delivered by the Authorized Representatives of various Secured Creditors comprising the Required Secured Creditors with respect to such instructions. The parties hereto acknowledge that the Authorized Representative

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of each of the Secured Creditors shall be (1) the Administrative Agent, in the case of the Lender Creditors, (2) the Existing Senior Notes Trustee, in the case of the Existing Senior Notes Creditors, (3) the New Senior Notes Trustee in the case of the New Senior Notes Creditors, (4) the Refinancing Senior Notes Trustee, in the case of the Refinancing Senior Notes Creditors, (5) in the case of any Credit Card Issuer, such representative as may be designated by such Credit Card Issuer by written notice to the Collateral Agent from time to time and (6) in the case of any Hedging Creditor, such representative as may be designated by such Hedging Creditor by written notice to the Collateral Agent from time to time.

5. Reliance; Interpretation. The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon, any note, writing, resolution, notice, statement, certificate, telex, teletype or telescopes message, cablegram, radiogram, order or other document or telephone message signed, sent or made by the proper Person or entity, and, with respect to all legal matters pertaining hereto or to the Security Agreement and its duties thereunder and hereunder, upon advice of counsel selected by it. If, in its good faith judgment, the Collateral Agent reasonably believes that any instructions given or delivered pursuant to the Security Agreement require judicial interpretation or are invalid or otherwise contrary to the provisions of the Security Agreement, any other Secured Debt Agreement or applicable law, the Collateral Agent shall have the right to petition a court of competent jurisdiction to determine the validity of, or otherwise interpret, any such instructions. In such event, the Collateral Agent shall not be required to carry out such instructions unless directed to do so, or it is determined that it may do so, by such court.

6. Indemnification. To the extent the Collateral Agent is not reimbursed and indemnified by the Assignors under the Security Agreement, the Secured Creditors will reimburse and indemnify the Collateral Agent, in proportion to their respective outstanding principal amounts (including, for this purpose, the Stated Amount of outstanding Letters of Credit, as well as any unpaid primary Obligations in respect of Secured Credit Card Agreements and Secured Hedging Agreements, as outstanding principal) of Obligations, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent in performing its duties hereunder, or in any way relating to or arising out of its actions as Collateral Agent in respect of the Security Agreement except for those resulting solely from the Collateral Agent’s own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). The indemnities set forth in this Section 6 shall survive the repayment of all Obligations, with the respective indemnification at such time to be based upon the outstanding principal amounts (determined as described above) of Obligations at the time of the respective occurrence upon which the claim against the Collateral Agent is based or, if same is not reasonably determinable, based upon the outstanding principal amounts (determined as described above) of Obligations as in effect immediately prior to the termination of the Security Agreement. The indemnities set forth in this Section 6 are in addition to any indemnities provided by the Lenders to the Collateral Agent pursuant to the Credit Agreement, with the effect being that the Lenders shall be responsible for indemnifying the Collateral Agent to the extent the Collateral Agent does not receive payments pursuant to this Section 6 from the Secured Creditors (although in such event, and upon the payment in full of all such amounts owing to the Collateral Agent by the Lenders,

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the Lenders shall be subrogated to any rights of the Collateral Agent to receive payment from the Secured Creditors).

          7. The Collateral Agent in its Individual Capacity. With respect to its obligations as a lender under the Credit Agreement and any other Credit Documents to which the Collateral Agent is a party, and to act as agent under one or more of such Credit Documents, the Collateral Agent shall have the rights and powers specified therein and herein for a “Lender”, or an “Agent”, as the case may be, and may exercise the same rights and powers as though it were not performing the duties specified herein; and the terms “Lenders”, “Required Lenders”, “holders of Notes”, or any similar terms shall, unless the context clearly otherwise indicates, include the Collateral Agent in its individual capacity. The Collateral Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with any Assignor or any Affiliate or Subsidiary of any Assignor as if it were not performing the duties specified herein or in the other Credit Documents, and may accept fees and other consideration from the Assignors for services in connection with the Credit Agreement, the other Credit Documents and otherwise without having to account for the same to the Secured Creditors.

8. Holders. The Collateral Agent may deem and treat the payee of any Note or the registered owner of any Existing Senior Note, New Senior Note or Refinancing Senior Note as the owner thereof for all purposes hereof unless and until written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Collateral Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note or the registered owner of any Existing Senior Note, New Senior Note or Refinancing Senior Note, shall be final and conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note, Existing Senior Note, New Senior Note or Refinancing Senior Note, as the case may be, or of any Note, Existing Senior Note, New Senior Note or Refinancing Senior Note, as the case may be, issued in exchange therefor.

9. Resignation and Removal of the Collateral Agent. (a) The Collateral Agent may resign from the performance of all of its functions and duties hereunder and under the Security Agreement at any time by giving 30 Business Days’ prior written notice to the Borrower and the Secured Creditors. Such resignation shall take effect upon the appointment of a successor Collateral Agent pursuant to clause (b) or (c) below.

(b) If a successor Collateral Agent shall not have been appointed within said 30 Business Day period by the Required Secured Creditors (with, so long as no Event of Default then exists, the consent of the Borrower (such consent not to be unreasonably withheld or delayed)), the Collateral Agent, with the consent (unless an Event of Default shall exist, in which case no such consent shall be required) of the Borrower (which consent shall not be unreasonably withheld or delayed) shall then appoint a successor Collateral Agent who shall serve as Collateral Agent hereunder or thereunder until such time, if any, such successor Collateral Agent resigns and is replaced in accordance with the terms hereof.

(c) If no successor Collateral Agent has been appointed pursuant to clause (b) above by the 30^th Business Day after the date of such notice of resignation was given by the Collateral Agent as a

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result of a failure by the Borrower to consent to the appointment of such a successor Collateral Agent, (i) the Required Secured Creditors shall then appoint a successor Collateral Agent who shall serve as Collateral Agent hereunder or thereunder or (ii) if the Required Secured Creditors shall have failed to appoint a successor Collateral Agent by the 35^th Business Day after the date such notice of resignation was given by the Collateral Agent, the Collateral Agent may appoint (or petition a court of competent jurisdiction to appoint) a successor Collateral Agent who shall serve as Collateral Agent hereunder or thereunder, in either such case until such time, if any, as the Required Secured Creditors appoint a successor Collateral Agent as provided above.

(d) Notwithstanding anything to the contrary contained herein, the Required Secured Creditors may remove the Collateral Agent by an instrument in writing executed by the Required Secured Creditors and, thereupon, appoint a successor Collateral Agent designated by the Required Secured Creditors (with, so long as no Event of Default then exists, the consent of the Borrower (such consent not to be unreasonably withheld or delayed)), effective as provided in Section 9(e) below.

          (e) The resignation or removal of a Collateral Agent shall become effective only upon the execution and delivery of such documents or instruments as are necessary to transfer the rights and obligations of the Collateral Agent under the Security Agreement and the recording or filing of such documents, instruments or financing statements as may be necessary to maintain the priority and perfection of any security interest granted by the Security Agreement. Copies of each such document or instrument shall be delivered to each of the Borrower, the Administrative Agent, the Existing Senior Notes Trustee, the New Senior Notes Trustee and the Refinancing Senior Notes Trustee. The appointment of a successor Collateral Agent pursuant to this Section 9 shall become effective upon the acceptance of such appointment (and execution by such successor of the documents, instruments or financing statements referred to above) and such successor Collateral Agent shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent.

          (f) After any resignation or removal hereunder of the Collateral Agent, the indemnification provisions specified in this Annex M and in the Security Agreement shall continue to inure to its benefit as to any actions taken or omitted to be taken by it in connection with its agency hereunder while it was Collateral Agent.

          10. Co-Collateral Agents; Separate Collateral Agents. (a) If at any time or times it shall be necessary or prudent in order to conform to any law of any jurisdiction in which any of the Collateral shall be located, or the Collateral Agent shall be advised by counsel, satisfactory to it, that it is necessary or prudent in the interest of the Collateral Agent or the Secured Creditors, then the Collateral Agent shall be entitled to appoint one or more sub-collateral agents or co-collateral agents, and in such case the Collateral Agent, the Borrower and each of the other Assignors having an interest in the Collateral located in the jurisdiction in which such separate or sub-collateral agent or co-collateral agent is to act shall execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company, or one or more individuals approved by the Collateral Agent, either to act as co-collateral agent or co-collateral agents jointly with the Collateral Agent originally named herein or any successor or successors, or to act as a separate or sub-collateral agent or agents of the Collateral Agent and the Secured Creditors in respect of any or all of the Collateral. If the Borrower and each of the other

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Assignors having an interest in the Collateral located in the jurisdiction in which such separate or sub-collateral agent or co-collateral agent is to act shall not have joined in the execution of such instruments or agreements within 10 days after the receipt of a written request from the Collateral Agent so to do, or if a Default or an Event of Default shall be continuing, the Collateral Agent may act under the foregoing provisions of this Section 10 without the concurrence of the Borrower and the other Assignors, and the Borrower and each of the other Assignors hereby irrevocably appoint the Collateral Agent as their agent and attorney to act for them under the foregoing provisions of this Section 10 in either of such contingencies.

          (b) Every separate or sub-collateral agent (and all references herein to a “separate collateral agent” shall be deemed to refer also to a “sub-collateral agent” or a “collateral sub-agent”) and every co-collateral agent, other than any collateral agent which may be appointed as successor to any Collateral Agent, shall, to the extent permitted by applicable law, be appointed and act and be such, subject to the following provisions and conditions, namely:

     (i) all rights, remedies, powers, duties and obligations conferred upon, reserved to or imposed upon the Collateral Agent in respect of the custody, control and management of monies, papers or securities shall be exercised solely by the Collateral Agent hereunder;

     (ii) all rights, remedies, powers, duties and obligations conferred upon, reserved to or imposed upon the Collateral Agent hereunder shall be conferred, reserved or imposed and exercised or performed by the Collateral Agent and such separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents, jointly or severally, as shall be provided in the instrument appointing such separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents, except to the extent that, under any law of any jurisdiction in which any particular act or acts are to be performed, the Collateral Agent shall be incompetent or unqualified to perform such act or acts, in which event such rights, remedies, powers, duties and obligations shall be exercised and performed by such separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents;

     (iii) no power given hereby to, or which it is provided hereby may be exercised by, any such separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents shall be exercised hereunder by such separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents except (subject to applicable law) jointly with, or with the consent or at the direction in writing of, the Collateral Agent (which direction shall be made in accordance with the provisions of the Security Agreement);

     (iv) all provisions of the Security Agreement relating to the Collateral Agent or to releases of Collateral shall apply to any such separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents;

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     (v) no collateral agent constituted under this Section 10 shall be personally liable by reason of any act or omission of any other separate or co-collateral agent or the Collateral Agent hereunder; and

     (vi) the Collateral Agent at any time by an instrument in writing, executed by it, may accept the resignation of any such separate collateral agent or co-collateral agent and the Collateral Agent or the Required Secured Creditors may individually or jointly remove any such separate collateral agent or co-collateral agent, and in that case, by an instrument in writing executed by the Collateral Agent or the Required Secured Creditors, as the case may be, and the Collateral Agent or the Required Secured Creditors, as the case may be, may appoint a successor to such separate collateral agent or co-collateral agent, as the case may be, anything herein contained to the contrary notwithstanding. If the Borrower and each of the other Assignors shall not have joined in the execution of any such instrument within 10 days after the receipt of a written request from the Collateral Agent so to do, or if a Default or an Event of Default shall be continuing, the Collateral Agent shall have the power to accept the resignation of or remove any such separate collateral agent or co-collateral agent and to appoint a successor to such separate collateral agent or co-collateral agent, as the case may be, and to execute any such instrument without the concurrence of the Borrower or such other Assignor, and the Borrower and each of the other Assignors hereby irrevocably appoint the Collateral Agent their agent and attorney to act for them in such connection in either of such contingencies. If the Collateral Agent shall have appointed a separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents as above provided, the Collateral Agent may at any time, by an instrument in writing, accept the resignation of or remove any such separate collateral agent or co-collateral agent, the successor to any such separate collateral agent or co-collateral agent to be appointed by the Borrower and each of the other Assignors and the Collateral Agent, or by the Collateral Agent alone, as hereinabove provided in this Section 10.

11. Certain Acknowledgment. (a) Each Secured Creditor, by its acceptance of the benefits hereunder and of the Security Agreement, hereby agrees for the benefit of the other Secured Creditors that, to the extent any additional or substitute collateral for any of the Obligations of the type covered by the Security Agreement is delivered by an Assignor to or for the benefit of any Secured Creditor, such collateral shall be subject to the provisions of this Annex M and of the Security Agreement.

(b) Each of the Secured Creditors hereby agrees not to challenge or question in any proceeding the validity or enforceability of any Security Document (in each case as a whole or any term or provision contained therein) or the validity of any Lien or financing statement in favor of the Collateral Agent for the benefit of the Secured Creditors (or Class of Secured Creditors) as provided in the respective Security Document.

12. Sharing Arrangements. (a) The Secured Creditors hereby agree that the provisions of the Security Documents with respect to allocations and distributions of proceeds of the Collateral shall prevail notwithstanding any event or circumstance, including, without limitation, in the event that, through the operation of any bankruptcy, reorganization, insolvency or other laws or

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otherwise, any prior creditors’ security interest in the Collateral is avoided in whole or in part or is enforced with respect to some, but not all, of the respective Obligations then outstanding.

(b) The Secured Creditors agree that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with the Security Documents, whether by preference or otherwise, it being understood and agreed that the benefit of any such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in the respective Security Documents.

(c) In the event that any payment or distribution shall be received by any Secured Creditor in a manner that is inconsistent with the provisions of Section 7.4 of the Security Agreement, such payment or distribution shall be held by the respective Secured Creditor for the benefit of, and shall be paid over or delivered to, the respective Secured Creditors entitled thereto for application to such Secured Creditors’ Obligations (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation for such Obligations, whether or not a claim for post-petition interest is allowed in any such proceeding) in accordance with Section 7.4 of the Security Agreement.

13. Provisions in the Event of Insolvency Proceedings. Without limiting the other provisions of this Annex M, upon the commencement of a case under the Bankruptcy Code by or against any Assignor the Security Documents shall remain in full force and effect and enforceable pursuant to their respective terms in accordance with Section 510(a) of the Bankruptcy Code, and all references herein to such Assignor shall be deemed to apply to such entity as debtor-in-possession and to any trustee in bankruptcy for the estate of such entity.

14. Special Releases and Waivers. (a) Each Secured Creditor agrees that neither the Collateral Agent nor the Required Secured Creditors (in directing the Collateral Agent to take any action with respect to the Collateral) shall have any duty or obligation to realize first upon any type of Collateral or to sell, dispose of or otherwise liquidate all or any portion of the Collateral in any manner that would maximize the return to any Class of Secured Creditors holding Obligations of any type (whether Credit Document Obligations, Credit Card Obligations, Hedging Obligations, Existing Senior Notes Obligations, RAI Senior Notes Obligations or otherwise), notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by such Class of Secured Creditors from such realization, sale, disposition or liquidation.

(b) Each of the Secured Creditors waives any claim which each such Secured Creditor may now or hereafter have against the Collateral Agent (and the Required Secured Creditors directing the Collateral Agent) arising out of any and all actions which the Collateral Agent takes or omits to take (including, without limitation, actions with respect to the creation, perfection or continuation of Liens on the Collateral, actions with respect to the occurrence of an Event of Default, actions with respect to the foreclosure upon, sale, release, or depreciation of, or failure to realize upon, any of the security for the Obligations and actions with respect to the collection of any claim for all or any part of the Obligations from any account debtor, guarantor or any

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other party) in accordance with the respective Secured Debt Agreements or any other agreement related thereto or to the collection of the Obligations or the valuation, use, protection or release of the security for the Obligations.

          15. Right to Amend. Etc. As between the Existing Senior Notes Creditors, the New Senior Notes Creditors, the Refinancing Senior Notes Creditors and the RJRTH Intercompany Note Creditor, on the one hand, and the other Secured Creditors (including, without limitation, the Lenders), on the other hand, it is agreed that the Secured Creditors (excluding the Existing Senior Notes Creditors, the New Senior Notes Creditors, the Refinancing Senior Notes Creditors and the RJRTH Intercompany Note Creditor in their capacities as such) may at any time and from time to time, in their sole discretion, and without any obligation to give any notice or receive any consent from the Existing Senior Notes Creditors, the New Senior Notes Creditors, the Refinancing Senior Notes Creditors and the RJRTH Intercompany Note Creditor in their capacities as such, (i) change the manner, place or terms of payment, or change or extend the time of payment of, or renew, alter, refinance, increase or add to the Credit Documents Obligations, the Credit Card Obligations or the Hedging Obligations, as applicable, (ii) obtain, release, or dispose of any Collateral for Credit Documents Obligations, the Credit Card Obligations or the Hedging Obligations, as applicable (subject, however, to Sections 10.2 and 10.8 of the Security Agreement), or (iii) amend or supplement in any manner the Security Agreement and the other Credit Documents or any other agreements or instruments evidencing, securing or relating to the Credit Documents Obligations, the Credit Card Obligations or the Hedging Obligations, as applicable (subject, however, in the case of the Credit Document Obligations, to Section 12.12 of the Credit Agreement and Section 10.2 of the Security Agreement), and the provisions of this Annex M shall continue in full force and effect with respect to all such Credit Documents Obligations, the Credit Card Obligations or the Hedging Obligations, as the case may be.

          16. Post-Petition Interest. Each Secured Creditor hereby acknowledges and agrees that the Credit Document Obligations, the Credit Card Obligations, the Hedging Obligations, the Existing Senior Notes Obligations, the RAI Senior Notes Obligations and the RJRTH Intercompany Note Obligations include all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective Secured Debt Agreements governing the same, whether or not a claim for post-petition interest is allowed in any such case, proceeding or other action.

          17. Effectiveness of Acknowledgements. Each of the agreements and acknowledgments made by each Secured Creditor is made on behalf of itself and its successors and assigns and is deemed effective by virtue of such Secured Creditors’ acceptance of the benefits of the Security Agreement and the other Security Documents.

EX-10.4

EXHIBIT 10.4

FIFTH AMENDED AND RESTATED
SUBSIDIARY GUARANTY

GUARANTY, dated as of May 18, 1999, as amended and restated as of November 17, 2000, as further amended and restated as of May 10, 2002, as further amended and restated as of January 17, 2003, as further amended and restated as of July 30, 2004 and as further amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, restated, modified and/or supplemented from time to time, this “Guaranty”), made by the undersigned (together with any other entity which becomes a party hereto pursuant to Section 24, each, a “Guarantor” and, collectively, the “Guarantors”). Except as otherwise defined herein, terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

W I T N E S S E T H :

WHEREAS, Reynolds American Inc. (the “Borrower”), the various lending institutions from time to time party thereto (the “Lenders”), and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), have entered into a Credit Agreement, dated as of May 7, 1999, as amended and restated as of November 17, 2000, as further amended and restated as of May 10, 2002, as further amended and restated as of July 30, 2004, and as further amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, restated, modified and/or supplemented from time to time, the “Credit Agreement”), providing for the making of Loans to the Borrower and the issuance of, and participation in, Letters of Credit for the account of the Borrower, all as contemplated therein (the Lenders, each Letter of Credit Issuer, the Administrative Agent, the Lead Agents and the Collateral Agent herein called the “Lender Creditors”);

WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and/or may in the future from time to time enter into, one or more agreements or arrangements with JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under the Credit Agreement for any reason (JPMCB, any such affiliate and their respective successors and assigns, each, a “Credit Card Issuer”)) providing for credit card loans made available to certain employees of the Borrower and/or one or more of its Subsidiaries (each such agreement or arrangement with a Credit Card Issuer, a “Secured Credit Card Agreement”);

WHEREAS, the Borrower and/or one or more of its Subsidiaries may from time to time enter into one or more (i) interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements), (ii) foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency values and/or (iii) other types of hedging agreements from time to time (each such agreement or arrangement with a Hedging Creditor (as hereinafter defined), together with the Existing Interest Rate Swap Agreement, a “Permitted Hedging Agreement”) with any Lender, any affiliate thereof or a syndicate of financial institutions organized by a Lender or an affiliate of a Lender (even if, in either case, any such Lender ceases to be a Lender under the Credit Agreement for any reason) (any such Lender,

affiliate or other such financial institution that participates therein[, together with Calyon (as counterparty to the Existing Interest Rate Swap Agreement),] and in each case its subsequent successors and assigns, collectively, the “Hedging Creditors”, and together with the Lender Creditors and each Credit Card Issuer, the “Creditors”);

WHEREAS, each Guarantor is a direct or indirect Subsidiary of the Borrower;

WHEREAS, certain of the Guarantors have heretofore entered into a Subsidiary Guaranty, dated as of May 18, 1999, as amended and restated as of November 17, 2000, as further amended and restated as of May 10, 2002, as further amended and restated as of January 17, 2003, and as further amended and restated as of May 31, 2006 (as so amended and restated and as further amended, modified and/or supplemented to, but not including, the date hereof, the “Fourth Amended and Restated Subsidiary Guaranty”);

WHEREAS, the Guarantors desire to amend and restate the Fourth Amended and Restated Subsidiary Guaranty in the form of this Guaranty;

WHEREAS, the Credit Agreement and/or the Permitted Hedging Agreements require that this Guaranty be executed and delivered; and

WHEREAS, each Guarantor will obtain benefits from the incurrence and maintenance of Loans by the Borrower and the issuance of, and participation in, Letters of Credit for the account of the Borrower under the Credit Agreement and the entering into and/or maintaining by the Borrower and/or one or more of its Subsidiaries of the Secured Credit Card Agreements and the Permitted Hedging Agreements and, accordingly, desires to execute this Guaranty in order to satisfy the requirements described in the preceding paragraph;

NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the following representations and warranties to the Creditors and hereby covenants and agrees with each Creditor as follows:

1. Each Guarantor, jointly and severally, irrevocably and unconditionally guarantees: (i) to the Lender Creditors the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of (x) the principal of and interest on the Notes issued by, and the Loans made to, the Borrower under the Credit Agreement and all reimbursement obligations and Unpaid Drawings with respect to Letters of Credit and (y) all other obligations (including obligations which, but for any automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing by the Borrower to the Lender Creditors (including, without limitation, indemnities, Fees and interest thereon (including, without limitation, any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the Credit Agreement, whether or not such interest is an allowed claim in any such proceeding)) now existing or hereafter incurred under, arising out of or in connection with the Credit Agreement or any other Credit Document and the due performance and compliance with the terms, conditions and agreements contained in the Credit Documents by the Borrower (all such principal, interest, liabilities and obligations being herein collectively called the “Credit Document Obligations”); (ii) to each Credit Card Issuer the full

and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for any automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing by each Guaranteed Party to the Credit Card Issuers (including, without limitation, indemnities, fees and interest thereon (including, without limitation, any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the respective Secured Credit Card Agreement, whether or not such interest is an allowed claim in any such proceeding)) under each Secured Credit Card Agreement, whether now in existence or hereafter arising, and the due performance and compliance by each Guaranteed Party with all terms, conditions and agreements contained therein (all such obligations and liabilities under this clause (ii) being herein collectively called the “Credit Card Obligations”) and (iii) to each Hedging Creditor the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for any automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing by each Guaranteed Party to the Hedging Creditors (including, without limitation, indemnities, fees and interest thereon (including, without limitation, any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the respective Permitted Hedging Agreement, whether or not such interest is an allowed claim in any such proceeding)) under each Permitted Hedging Agreement, whether now in existence or hereafter arising, and the due performance and compliance by each Guaranteed Party with all terms, conditions and agreements contained therein (all such obligations and liabilities under this clause (iii) being herein collectively called the “Hedging Obligations”, and together with the Credit Document Obligations and Credit Card Obligations are herein collectively called the “Guaranteed Obligations”). As used herein, the term “Guaranteed Party” shall mean the Borrower and each Subsidiary of the Borrower party to any Secured Credit Card Agreement or Permitted Hedging Agreement. Each Guarantor understands, agrees and confirms that the Creditors may enforce this Guaranty up to the full amount of the Guaranteed Obligations against each Guarantor without proceeding against any other Guarantor, the Borrower, any other Guaranteed Party, against any security for the Guaranteed Obligations, or against any other guarantor under any other guaranty covering all or a portion of the Guaranteed Obligations. This Guaranty shall constitute a guaranty of payment and not of collection. All payments by each Guarantor under this Guaranty shall be made on the same basis as payments by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement.

2. Additionally, each Guarantor, jointly and severally, unconditionally and irrevocably, guarantees the payment of any and all Guaranteed Obligations to the Creditors whether or not due or payable by the Borrower or any other Guaranteed Party upon the occurrence in respect of the Borrower or any such other Guaranteed Party of any of the events specified in Section 9.05 of the Credit Agreement, and unconditionally and irrevocably, jointly and severally, promises to pay such Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of the United States of America.

3. The liability of each Guarantor hereunder is exclusive and independent of any security for or other guaranty of the Guaranteed Obligations whether executed by such Guarantor, any other Guarantor, any other guarantor or by any other person, and the liability of each Guarantor hereunder shall not be affected or impaired by (i) any direction as to application of payment by the Borrower, any other Guaranteed Party or any other person, (ii) any other continuing or other

guaranty, undertaking or maximum liability of a guarantor or of any other person as to the Guaranteed Obligations, (iii) any payment on or in reduction of any such other guaranty or undertaking, (iv) any dissolution, termination or increase, decrease or change in personnel by the Borrower or any other Guaranteed Party, (v) any payment made to any Creditor on the Guaranteed Obligations which any Creditor repays the Borrower or any other Guaranteed Party pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, (vi) any action or inaction by the Creditors as contemplated in Section 6 hereof or (vii) any invalidity, irregularity or unenforceability of all or part of the Guaranteed Obligations or of any security therefor.

4. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor, any other guarantor of any Guaranteed Party, the Borrower or any other Guaranteed Party, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor, any other guarantor of any Guaranteed Party, the Borrower or any other Guaranteed Party and whether or not any other Guarantor, any other guarantor of any Guaranteed Party, the Borrower or any other Guaranteed Party be joined in any such action or actions. Each Guarantor waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the Borrower or any other Guaranteed Party or other circumstance which operates to toll any statute of limitations as to the Borrower or such other Guaranteed Party shall operate to toll the statute of limitations as to each Guarantor.

5. Each Guarantor hereby waives notice of acceptance of this Guaranty and notice of any liability to which it may apply, and waives promptness, diligence, presentment, demand of payment, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking of other action by the Administrative Agent or any other Creditor against, and any other notice to, any party liable thereon (including such Guarantor, any other Guarantor, any other guarantor of any Guaranteed Party or any other Guaranteed Party).

6. Any Creditor may at any time and from time to time without the consent of, or notice to, any Guarantor, without incurring responsibility to such Guarantor, without impairing or releasing the obligations of such Guarantor hereunder, upon or without any terms or conditions and in whole or in part:

     (i) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew or alter, any of the Guaranteed Obligations (including any increase or decrease in the rate of interest thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered;

     (ii) take and hold security for the payment of the Guaranteed Obligations and/or sell, exchange, release, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst;

     (iii) exercise or refrain from exercising any rights against the Borrower, any Guarantor, any other guarantor of any Guaranteed Party, any other Guaranteed Party or others or otherwise act or refrain from acting;

     (iv) settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Borrower or any other Guaranteed Party to creditors of the Borrower or any other Guaranteed Party;

     (v) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrower or any other Guaranteed Party to the Creditors regardless of what liabilities of the Borrower or such other Guaranteed Party remain unpaid;

     (vi) release or substitute any one or more endorsers, guarantors, Guarantors, the Borrower, any other Guaranteed Party or other obligors;

     (vii) consent to or waive any breach of, or any act, omission or default under, the Secured Credit Card Agreements, the Permitted Hedging Agreements, the Credit Documents or any of the instruments or agreements referred to therein, or otherwise amend, modify or supplement any of the Secured Credit Card Agreements, the Permitted Hedging Agreements, the Credit Documents or any of such other instruments or agreements; and/or

     (viii) act or fail to act in any manner referred to in this Guaranty which may deprive such Guarantor of its right to subrogation against the Borrower or any other Guaranteed Party to recover full indemnity for any payments made pursuant to this Guaranty.

7. No invalidity, irregularity or unenforceability of all or any part of the Guaranteed Obligations or of any security therefor shall affect, impair or be a defense to this Guaranty, and this Guaranty shall be primary, absolute and unconditional notwithstanding the occurrence of any event or the existence of any other circumstances which might constitute a legal or equitable discharge of a surety or guarantor except payment in full of the Guaranteed Obligations.

8. This Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. No failure or delay on the part of any Creditor in exercising any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which any Creditor would otherwise have. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Creditor to any other or further action in any circumstances without notice or demand. It is not necessary for any Creditor to inquire into the capacity or powers of the Borrower, any other Guaranteed Party or any of their respective Subsidiaries or the officers, directors, partners or agents acting or

purporting to act on its or their behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

9. Any indebtedness of the Borrower or any other Guaranteed Party now or hereafter held by any Guarantor is hereby subordinated to the indebtedness of the Borrower or such other Guaranteed Party, as the case may be, to the Creditors; and such indebtedness of the Borrower or such other Guaranteed Party to any Guarantor, if the Administrative Agent, after an Event of Default has occurred, so requests, shall be collected, enforced and received by such Guarantor as trustee for the Creditors and be paid over to the Creditors on account of the indebtedness of the Borrower or such other Guaranteed Party to the Creditors, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guaranty. Prior to the transfer by any Guarantor of any note or negotiable instrument evidencing any indebtedness of the Borrower or any other Guaranteed Party to such Guarantor, such Guarantor shall mark such note or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, each Guarantor hereby agrees with the Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash.

10. (a) Each Guarantor waives any right (except as shall be required by applicable statute and cannot be waived) to require the Creditors to: (i) proceed against the Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of any Guaranteed Party or any other person; (ii) proceed against or exhaust any security held from the Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of any Guaranteed Party or any other person; or (iii) pursue any other remedy in the Creditors’ power whatsoever. Each Guarantor waives any defense based on or arising out of any defense of the Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of any Guaranteed Party or any other person other than payment in full in cash of the Guaranteed Obligations, including, without limitation, any defense based on or arising out of the disability of the Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of any Guaranteed Party or any other person, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Guaranteed Party, other than payment in full in cash of the Guaranteed Obligations. The Creditors may, at their election, foreclose on any security held by the Administrative Agent, the Collateral Agent or the other Creditors by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Creditors may have against the Borrower, any other Guaranteed Party or any other person, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder, except to the extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor waives any defense arising out of any such election by the Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower, any other Guaranteed Party or any other person or any security.

(b) Each Guarantor waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new

or additional indebtedness. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s and each other Guaranteed Party’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and agrees that the Creditors shall have no duty to advise any Guarantor of information known to them regarding such circumstances or risks.

(c) Until such time as the Guaranteed Obligations have been paid in full in cash, each Guarantor hereby forbears from exercising all contractual, statutory or common law rights of reimbursement, contribution or indemnity from the Borrower, any other Guaranteed Party or any other Guarantor which it may at any time otherwise have as a result of this Guaranty.

11. If and to the extent that any Guarantor makes any payment to any Creditor or to any other Person pursuant to or in respect of this Guaranty, any claim which such Guarantor may have against the Borrower or any other Guaranteed Party by reason thereof shall be subject and subordinate to the prior payment in full in cash of the Guaranteed Obligations to each Creditor.

12. Each Guarantor covenants and agrees that on and after the date hereof and until the termination of the Total Commitment and when no Note or Letter of Credit remains outstanding and all Credit Document Obligations have been paid in full (other than those arising from indemnities for which no request has been made), such Guarantor shall take, or will refrain from taking, as the case may be, all actions that are necessary to be taken or not taken so that no violation of any provision, covenant or agreement contained in Section 7 or 8 of the Credit Agreement, and so that no Event of Default, is caused by the actions of such Guarantor or any of its Subsidiaries.

13. The Guarantors hereby jointly and severally agree to pay all reasonable and actual out-of-pocket costs and expenses of each Creditor in connection with the enforcement of this Guaranty and the protection of such Creditor’s rights hereunder, and in connection with any amendment, waiver or consent relating hereto (including, without limitation, the reasonable and actual fees and disbursements of counsel employed by the Administrative Agent or any of the other Creditors). Any reference in this Guaranty to “fees of counsel” shall mean the actual and reasonable fees of counsel incurred at customary and reasonable rates in the jurisdiction in which such counsel performed its services, not pursuant to any statutory formula or percentage calculation.

14. This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the Creditors and their successors and assigns.

15. Neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated in any manner whatsoever unless in writing duly signed by the Administrative Agent (with the consent of (x) the Required Lenders or, to the extent required by Section 12.12 of the Credit Agreement, all of the Lenders, at all times prior to the time at which all Credit Document Obligations have been paid in full, or (y) the holders of at least a majority of the outstanding Credit Card Obligations and Hedging Obligations at all times after the time at which all Credit Document Obligations have been paid in full) and each Guarantor directly affected thereby (it being understood that the addition or release of any Guarantor hereunder shall not constitute a

change, waiver, discharge or termination affecting any Guarantor other than the Guarantor so added or released); provided, that any change, waiver, modification or variance affecting the rights and benefits of a single Class (as defined below) of Creditors (and not all Creditors in a like or similar manner) shall require the written consent of the Requisite Creditors (as defined below) of such Class. For the purpose of this Guaranty, the term “Class” shall mean each class of Creditors, i.e., whether (i) the Lender Creditors as holders of the Credit Document Obligations, (ii) the Credit Card Issuers as holders of the Credit Card Obligations or (iii) the Hedging Creditors as holders of the Hedging Obligations. For the purpose of this Guaranty, the term “Requisite Creditors” of any Class shall mean each of (i) with respect to the Credit Document Obligations, the Required Lenders, (ii) with respect to the Credit Card Obligations, the holders of at least a majority of all Credit Card Obligations outstanding from time to time and (iii) with respect to the Hedging Obligations, the holders of at least a majority of all obligations outstanding from time to time under the Permitted Hedging Agreements.

16. Each Guarantor acknowledges that an executed (or conformed) copy of each of the Credit Documents, the Secured Credit Card Agreements and the Permitted Hedging Agreements has been made available to its principal executive officers and such officers are familiar with the contents thereof.

17. In addition to any rights now or hereafter granted under applicable law (including, without limitation, Section 151 of the New York Debtor and Creditor Law) and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term to mean and include any “Event of Default” as defined in the Credit Agreement and any payment default under any Secured Credit Card Agreement or Permitted Hedging Agreement and to include in any event, any payment default on any of the Guaranteed Obligations continuing after any applicable grace period), each Creditor is hereby authorized at any time or from time to time, without notice to any Guarantor or to any other Person, any such notice being expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Creditor to or for the credit or the account of such Guarantor, against and on account of the obligations and liabilities of such Guarantor to such Creditor under this Guaranty, irrespective of whether or not such Creditor shall have made any demand hereunder and although said obligations, liabilities, deposits or claims, or any of them, shall be contingent or unmatured. Each Creditor acknowledges and agrees that the provisions of this Section 17 are subject to the sharing provisions set forth in Section 12.06(b) of the Credit Agreement.

18. All notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile transmission or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered (including by way of overnight courier) (i) in the case of any Lender Creditor, as provided in the Credit Agreement, (ii) in the case of any Guarantor, at its address set forth opposite its signature below, (iii) in the case of any Credit Card Issuer, at such address as such Credit Card Issuer shall have specified in writing to the Guarantors and (iv) in the case of any Hedging Creditor, at such address as such Hedging Creditor shall have specified in writing to the Guarantors; or, in any case, at such other address as shall be designated by any party in a written notice to the other parties hereto. All such notices and communications shall be deemed to have been duly given or made (i) in the case of any Creditor, when received and

(ii) in the case of any Guarantor, when delivered to such Guarantor in any manner required or permitted hereunder.

19. If claim is ever made upon any Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of said Creditors repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such Creditor or any of its property or (ii) any settlement or compromise of any such claim effected by such Creditor with any such claimant (including the Borrower and each other Guaranteed Party), then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Guarantor, notwithstanding any revocation hereof or the cancellation of any Note, any Secured Credit Card Agreement or any Permitted Hedging Agreement or other instrument evidencing any liability of the Borrower or any other Guaranteed Party, and such Guarantor shall be and remain liable to such Creditor hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such Creditor.

          20. (a) This Guaranty and the rights and obligations of the Creditors and of the undersigned hereunder shall be governed by and construed in accordance with the law of the state of New York.

(b) Any legal action or proceeding with respect to this Guaranty or any other Credit Document to which any Guarantor is a party may be brought in the courts of the state of New York or of the United States of America for the Southern District of New York, and, by execution and delivery of this Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Guarantor at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Each Guarantor hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder or under any other credit document to which such Guarantor is a party that service of process was in any way invalid or ineffective. Each Guarantor hereby irrevocably appoints the Borrower as its agent for service of process in respect of any such action or proceeding. Nothing herein shall affect the right of any of the Creditors to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any Guarantor in any other jurisdiction.

(c) Each Guarantor hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Guaranty or any other Credit Document brought in the courts referred to in clause (b) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that such action or proceeding brought in any such court has been brought in an inconvenient forum.

(d) Each Guarantor hereby irrevocably waives all rights to a trial by jury in any action, proceeding or counterclaim arising out of or relating to this Guaranty, the other Credit Documents or the transactions contemplated hereby or thereby.

21. In the event that all of the capital stock or other equity interests of one or more Guarantors is sold or otherwise disposed of (to a Person other than the Borrower or a Wholly-Owned Subsidiary thereof) or liquidated in compliance with the requirements of Section 8.02 of the Credit Agreement (or such sale, disposition or liquidation has been approved in writing by the Required Lenders (or all Lenders, if required by Section 12.12 of the Credit Agreement)), such Guarantor shall be released from this Guaranty and this Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no further force or effect (it being understood and agreed that the sale of one or more Persons that own, directly or indirectly, all of the capital stock or other equity interests of any Guarantor shall be deemed to be a sale of such Guarantor for the purposes of this Section 21).

22. All payments made by any Guarantor hereunder will be made without setoff, counterclaim or other defense.

23. This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent.

24. It is understood and agreed that any Subsidiary of the Borrower that is required to execute a counterpart of this Guaranty pursuant to the Credit Agreement shall automatically become a Guarantor hereunder by executing a counterpart hereof (or an assumption agreement in form and substance satisfactory to the Administrative Agent) and delivering the same to the Administrative Agent.

25. Notwithstanding anything else to the contrary in this Guaranty, the Creditors agree that this Guaranty may be enforced only by the action of the Administrative Agent acting upon the instructions of the Required Lenders (or, after the date on which all Credit Document Obligations have been paid in full, the holders of at least a majority of the outstanding Credit Card Obligations and Hedging Obligations), and that no other Creditor shall have any right individually to seek to enforce or to enforce this Guaranty, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent or the holders of at least a majority of the outstanding Credit Card Obligations and Hedging Obligations, as the case may be, for the benefit of the Creditors upon the terms of this Guaranty. The Creditors further agree that this Guaranty may not be enforced against any director, officer, employee, or stockholder of any Guarantor (except to the extent such stockholder is also a Guarantor hereunder). It is understood that the agreement in this Section 25 is among and solely for the benefit of the Lenders and that if the Required Lenders so agree (without requiring the consent of any Guarantor), this Guaranty may be directly enforced by any Creditor.

26. Each Guarantor hereby confirms that it is its intention that this Guaranty not constitute a fraudulent transfer or conveyance for purposes of any bankruptcy, insolvency or similar law, the

Uniform Fraudulent Conveyance Act or any similar Federal, state of foreign law. To effectuate the foregoing intention, each Guarantor hereby irrevocably agrees that the Guaranteed Obligations shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws, result in the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance.

27. Each of the Administrative Agent and each Guarantor hereby acknowledges and agrees that this Guaranty amends and restates (and supersedes in its entirety) the Fourth Amended and Restated Subsidiary Guaranty.

* * *

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date first above written.

Address:

P.O. Box 2959	R. J. REYNOLDS TOBACCO COMPANY, as a Guarantor
401 N. Main Street
Winston Salem, NC 27102
Attn: Guy Blynn

By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Senior Vice President & Treasurer

RJR ACQUISITION CORP., as a Guarantor
By:	/s/ McDara P. Folan, III
	Name:	McDara P. Folan, III
	Title: Vice President & Assistant Secretary

GMB, INC., as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Treasurer

FHS, INC., as a Guarantor
By:	/s/ Kathryn A. Premo
	Name:	Kathryn A. Premo
	Title: Treasurer

R. J. REYNOLDS TOBACCO CO.,
	as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Vice President & Treasurer

Subsidiary Guaranty

R. J. REYNOLDS TOBACCO HOLDINGS, INC., as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Senior Vice President & Treasurer

SANTA FE NATURAL TOBACCO COMPANY, INC., as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Assistant Treasurer

LANE LIMITED, as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Assistant Treasurer

Subsidiary Guaranty

CONWOOD COMPANY, L.P., as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Vice President & Treasurer

Subsidiary Guaranty

CONWOOD SALES CO., L.P., as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Vice President & Treasurer

Subsidiary Guaranty

ROSSWIL LLC, as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Vice President & Treasurer

Subsidiary Guaranty

CONWOOD HOLDINGS, INC., as a Guarantor
By:	/s/ Daniel A. Fawley
	Name:	Daniel A. Fawley
	Title: Vice President & Treasurer

Subsidiary Guaranty

NA HOLDINGS, INC., as a Guarantor
By:	/s/ McDara P. Folan, III
	Name:	McDara P. Folan, III
	Title: President

Accepted and Agreed to:

JPMORGAN CHASE BANK, N.A.
as Administrative Agent for the Lenders

By	/s/ Robert T. Sacks Name: Robert T. Sacks
	Title: Managing Director

Subsidiary Guaranty

EX-10.5

EXHIBIT 10.5

This Deed of Trust was prepared by,	This document is intended
and when recorded should be returned to:	to be recorded in
	[Davie/Forsyth/Stokes] County, NORTH CAROLINA

Leila Rachlin, Esq.
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
(212) 819-8720
1107993-0127

FIRST AMENDED AND RESTATED DEED OF TRUST, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES, RENTS AND PROFITS,

FINANCING STATEMENT AND FIXTURE FILING

made by

R. J. REYNOLDS TOBACCO COMPANY,

as the Trustor,

to

The Fidelity Company, as Trustee

JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent for the Secured Creditors,
as the Beneficiary

COLLATERAL IS OR INCLUDES FIXTURES

Amended and Restated Deed of Trust — ______ County, NC

FIRST AMENDED AND RESTATED DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES, RENTS AND PROFITS,
FINANCING STATEMENT AND FIXTURE FILING

          THIS FIRST AMENDED AND RESTATED DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS AND PROFITS, FINANCING STATEMENT AND FIXTURE FILING, dated as of July 9, 2003, as amended as of July 30, 2004, and as amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, restated, supplemented and/or otherwise modified from time to time, this “Deed of Trust”) made by R. J. Reynolds Tobacco Company, a North Carolina Corporation (and formerly a New Jersey corporation) (the “Trustor”), having an address at 401 North Main Street, Winston-Salem, North Carolina 27102 as the Trustor, to The Fidelity Company, a North Carolina corporation (“Trustee”), having an address at One West Fourth Street, Winston-Salem, North Carolina 27101, for the benefit of JPMorgan Chase Bank, N.A. (together with any successor beneficiary, the “Beneficiary”), having an address at 270 Park Avenue, New York, NY 10017, as Administrative Agent and Collateral Agent, as the Beneficiary for the benefit of the Secured Creditors (as defined below).

          All capitalized terms used but not otherwise defined herein shall have the same meanings ascribed to such terms in the Credit Agreement described below.

W I T N E S S E T H :

          WHEREAS, Reynolds American Inc. (the “Borrower”), the various lending institutions from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), Lehman Brothers Commercial Paper, Inc. and Citicorp. USA, Inc. as Syndication Agents (the “Syndication Agents”), General Electric Capital Corporation and Mizuho Corporate Bank, Ltd. as Documentation Agents (the “Documentation Agents”), Lehman Brothers Inc., J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and General Electric Capital Corporation, as Joint Lead Arrangers and Joint Bookrunners and Lehman Brothers Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as Joint Bookrunners (the “Joint Bookrunners”) have entered into a Credit Agreement, dated as of May 7, 1999, as amended and restated as of November 17, 2000, as further amended and restated as of May 10, 2002, as further amended and restated as of July 30, 2004 and as further amended and restated as of the date hereof, providing for a credit facility of up to $2,350,000,000 for the making of Loans to the Borrower and the issuance of, and participation in, Letters of Credit for the account of the Borrower, all as contemplated therein (with (i) the Lenders, the Swingline Lender, each Letter of Credit Issuer, the Administrative Agent, the Syndication Agents, the Documentation Agents, the other Agents and the Collateral Agent being herein collectively called the “Lender Creditors” and (ii) the term “Credit Agreement” as used herein to mean the Credit Agreement described above in this paragraph, as the same may be further amended, modified, extended, renewed, replaced, restated, supplemented and/or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not

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with the same agent, trustee, representative lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (x) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (y) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by the Borrower to the Collateral Agent);

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and/or may in the future from time to time enter into, one or more agreements or arrangements with JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under the Credit Agreement for any reason (JPMCB and any such affiliate and their respective successors and assigns, each, a “Credit Card Issuer”)) providing for credit card loans to be made available to certain employees of the Borrower and/or one or more of its Subsidiaries (each such agreement or arrangement with a Credit Card Issuer, a “Secured Credit Card Agreement”);

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and or may in the future from time to time enter into or guarantee one or more (i) interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements), and/or (ii) foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency or commodity values (each such agreement or arrangement with a Hedging Creditor (as hereinafter defined), together with the Existing Interest Rate Swap Agreement, a “Secured Hedging Agreement”), with any Lender, any affiliate thereof or a syndicate of financial institutions organized by a Lender or an affiliate of a Lender (even if any such Lender ceases to be a Lender under the Credit Agreement for any reason) (any such Lender, affiliate or other such financial institution that participates therein, together with Calyon (as counterparty to the Existing Interest Rate Swap Agreement), and in each case their subsequent successors and assigns, collectively, the “Hedging Creditors”, and together with the Lender Creditors and each Credit Card Issuer, the “Lender Secured Creditors”);

          WHEREAS, R. J. Reynolds Tobacco Holdings, Inc., a Wholly-Owned Subsidiary of the Borrower (“RJRTH”) and the Existing Senior Notes Trustee, on behalf of the holders of the Existing Senior Notes, have entered into the Existing Senior Notes Indenture, providing for the issuance of Existing Senior Notes by RJRTH, with the aggregate principal amount of the Existing Senior Notes outstanding on the date hereof equaling $1,450,000,000;

          WHEREAS, the Borrower and the New Senior Notes Trustee, on behalf of the holders of the New Senior Notes, have entered into the New Senior Notes Indenture, providing for the issuance of New Senior Notes by the Borrower, with the aggregate principal amount of the New Senior Notes outstanding on the date hereof equaling $1,650,000,000;

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          WHEREAS, the Borrower and the Refinancing Senior Notes Trustee, on behalf of the holders of the Refinancing Senior Notes, may from time to time enter into the Refinancing Senior Notes Indenture, providing for the issuance of Refinancing Senior Notes by the Borrower, providing for the issuance from time to time of Refinancing Senior Notes by the Borrower, with the aggregate principal amount of the Refinancing Senior Notes outstanding on the date hereof equaling $0;

          WHEREAS, the Trustor is owner of the fee simple title to the Trust Property (as hereinafter defined), subject to Permitted Liens;

          WHEREAS, pursuant to the Subsidiary Guaranty, the Trustor has (together with the other Subsidiaries of the Borrower party thereto) jointly and severally guaranteed to the Lender Secured Creditors the payment when due of the Guaranteed Obligations (as and to the extent defined in the Subsidiary Guaranty);

          WHEREAS, the Trustor has guaranteed to the Existing Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the Existing Senior Notes;

          WHEREAS, the Trustor has guaranteed to the New Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the New Senior Notes;

          WHEREAS, the Trustor may from time to time guarantee to the Refinancing Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the Refinancing Senior Notes;

          WHEREAS, pursuant to the Credit Agreement, the Trustor executed and delivered that certain Deed of Trust, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing dated as of July 9, 2003, to The Fidelity Company, as Trustee, for the benefit of JPMorgan Chase Bank, N.A. as Beneficiary, as Collateral Agent for the Secured Creditors as described therein (the “2003 Deed of Trust”), which was recorded in the Records of the Clerk and Recorder of ___ County, North Carolina (the “Records”) on July 15, 2003, in Book ___ at Page ___. The 2003 Deed of Trust was amended by that certain First Amendment to Deed of Trust, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing dated as of July 30, 2004, made by and between the Trustor and the Beneficiary (the “First Amendment to Deed of Trust” and, together with the 2003 Deed of Trust, the “Original Deed of Trust”) which was recorded in the records on August 2, 2004, in Book ___ at Page ___.

          WHEREAS, the Credit Agreement requires this Deed of Trust be executed and delivered to the Beneficiary by the Trustor and the Secured Hedging Agreements, the Secured Credit Card Agreements, the Existing Senior Notes Indenture and the New Senior Notes Indenture, require that this Deed of Trust secure the respective Obligations as provided herein; and

          WHEREAS, the Trustor desires to further amend and restate the Original Deed of Trust to satisfy the condition in the preceding paragraph and to secure (and this Deed of Trust shall secure) the following:

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     (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Trustor, now existing or hereafter incurred under, arising out of or in connection with any Credit Document to which the Trustor is a party (including, without limitation, indemnities, fees and interest (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)) and the due performance of and compliance by the Trustor with the terms of each such Credit Document (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or liabilities with respect to Secured Hedging Agreements, being herein collectively called the “Credit Document Obligations”);

     (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Trustor, now existing or hereafter incurred under, arising out of or in connection with each Secured Credit Card Agreement (including, all obligations, if any, of the Trustor under the Subsidiary Guaranty in respect of any Secured Credit Card Agreement), and all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding (all such obligations and liabilities under this clause (ii) being herein collectively called the “Credit Card Obligations”);

     (iii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Trustor, now existing or hereafter incurred under, arising out of or in connection with each Secured Hedging Agreement (including, all obligations, if any, of the Trustor under the Subsidiary Guaranty in respect of any Secured Hedging Agreement), and all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding (all such obligations and liabilities under this clause (iii) being herein collectively called the “Hedging Obligations”);

     (iv) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Trustor, now existing or hereinafter incurred under, arising out of or in connection with each Existing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action

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relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Trustor with the terms of each such Existing Senior Notes Document (all such obligations and liabilities under this clause (iv) being herein collectively called the “Existing Senior Notes Obligations”);

     (v) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Trustor, now existing or hereinafter incurred under, arising out of or in connection with each New Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Trustor with the terms of each such New Senior Notes Document (all such obligations and liabilities under this clause (v) being herein collectively called the “New Senior Notes Obligations”);

     (vi) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Trustor now existing or hereinafter incurred under, arising out of or in connection with each Refinancing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Trustor with the terms of each such Refinancing Senior Notes Document (all such obligations and liabilities under this clause (vi) being herein collectively called the “Refinancing Senior Notes Obligations” and together with the New Senior Notes Obligations, the “RAI Senior Notes Obligations”);

     (vii) any and all sums advanced by the Beneficiary in order to preserve the Trust Property or preserve its lien and security interest in the Trust Property;

     (viii) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of the Trustor and/or the Borrower referred to above after an Event of Default (as hereinafter defined) shall have occurred and be continuing, all expenses of re-taking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Trust Property, or of any exercise by the Beneficiary of its rights hereunder, together with reasonable attorneys’ fees and disbursements (as set forth in Section 4.09 hereof) and court costs;

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     (ix) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 4.10 hereof;

     (x) any and all other indebtedness now owing or which may hereafter be owing by the Trustor to the Beneficiary, however and whenever incurred or evidenced, whether express or implied, direct or indirect, absolute or contingent, or due or to become due; and

     (xi) any and all renewals, extensions and modifications of any of the obligations and liabilities referred to in clauses (i) through (ix) above;

all such obligations, liabilities, sums and expenses set forth in clauses (i) through (xi) above being herein collectively called the “Obligations”, provided that notwithstanding the foregoing, (i) the Existing Senior Notes Obligations shall be excluded from the Obligations, to the extent the Existing Senior Notes Documents do not require the Existing Senior Notes Obligations to be secured pursuant to this Deed of Trust, (ii) the New Senior Notes Obligations shall be excluded from the Obligations, to the extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured pursuant to this Deed of Trust and (iii) the Refinancing Senior Notes Obligations shall be excluded from the Obligations, to the extent the Refinancing Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured pursuant to this Deed of Trust.

          NOW, THEREFORE, as security for its Applicable Obligations (as defined below) and in consideration of the sum of ten dollars ($10.00) and the other benefits accruing to the Trustor, the receipt and sufficiency of which are hereby acknowledged, THE TRUSTOR HEREBY MORTGAGES, GIVES, GRANTS, BARGAINS, SELLS, CONVEYS AND CONFIRMS TO THE TRUSTEE FOR THE BENEFIT OF THE BENEFICIARY AND THEIR SUCCESSORS AND ASSIGNS FOREVER, TOGETHER WITH POWER OF SALE (subject to applicable law) all of the Trustor’s estate, right, title and interest, whether now owned or hereafter acquired, whether as lessor or lessee and whether vested or contingent, in and to all of the following:

          A. The land described in Exhibit A hereto, together with all rights, privileges, franchises and powers related thereto which are appurtenant to said land or its ownership, including all minerals, oil and gas and other hydrocarbon substances thereon or therein; waters, water courses, water stock, water rights (whether riparian, appropriative, or otherwise, and whether or not appurtenant), sewer rights, shrubs, crops, trees, timber and other emblements now or hereafter on, under or above the same or any part or parcel thereof (the “Land”);

          B. All buildings, structures, tenant improvements and other improvements of every kind and description now or hereafter located in or on the Land, including, but not limited to all machine shops, structures, improvements, rail spurs, dams, reservoirs, water, sanitary and storm sewers, drainage, electricity, steam, gas, telephone and other utility facilities, parking areas, roads, driveways, walks and other site improvements of every kind and description now or hereafter erected or placed on the Land; and all additions and betterments thereto and all renewals, alterations, substitutions and replacements thereof (collectively, the “Improvements”);

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          C. All fixtures, attachments, appliances, equipment, machinery, building materials and supplies, and other tangible personal property, now or hereafter attached to said Improvements or now or at any time hereafter located on the Land and/or Improvements including, but not limited to, artwork, decorations, draperies, furnaces, boilers, oil burners, piping, plumbing, refrigeration, air conditioning, lighting, ventilation, disposal and sprinkler systems, elevators, motors, dynamos and all other equipment and machinery, appliances, fittings and fixtures of every kind located in or used in the operation of the Improvements, together with any and all replacements or substitutions thereof and additions thereto, including the proceeds of any sale or transfer of the foregoing (hereinafter sometimes collectively referred to as the “Equipment”);

          D. All surface rights, appurtenant rights and easements, rights of way, and other rights appurtenant to the use and enjoyment of or used in connection with the Land and/or the Improvements;

          E. All streets, roads and public places (whether open or proposed) now or hereafter adjoining or otherwise providing access to the Land, the land lying in the bed of such streets, roads and public places, and all other sidewalks, alleys, ways, passages, vaults, water courses, strips and gores of land now or hereafter adjoining or used or intended to be used in connection with all or any part of the Land and/or the Improvements;

          F. Any leases, lease guaranties and any other agreements, relating to the use and occupancy of the Land and/or the Improvements or any portion thereof, including but not limited to any use or occupancy arrangements created pursuant to Section 365(h) of he Bankruptcy Code or otherwise in connection with the commencement or continuance of any bankruptcy, reorganization, arrangement, insolvency, dissolution, receivership or similar proceedings, or any assignment for the benefit of creditors, in respect of any tenant or occupant of any portion of the Land and/or the Improvements (collectively, “Leases”);

          G. All revenues, rents, receipts, income, accounts receivable, issues and profits of the Trust Property (collectively, “Rents”);

          H. To the extent assignable, all permits, licenses and rights relating to the use, occupation and operation of the Land and the Improvements, any business conducted thereon or therein and any part thereof;

          I. All real estate tax refunds payable to the Trustor with respect to the Land and/or the Improvements, and refunds, credits or reimbursements payable with respect to bonds, escrow accounts or other sums payable in connection with the use, development, or ownership of the Land or Improvements;

          J. Any claims or demands with respect to any proceeds of insurance in effect with respect to the Land and/or the Improvements, including interest thereon, which the Trustor now has or may hereafter acquire and any and all awards made for the taking by eminent domain, condemnation or by any proceedings, transfer or purchase in lieu or in anticipation of the exercise of said rights, or for a change of grade, or for any other injury to or decrease in the value of the whole or any part of the Trust Property;

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          K. Any zoning lot agreements and air rights and development rights which may be vested in the Trustor together with any additional air rights or development rights which have been or may hereafter be conveyed to or become vested in the Trustor; and

          L. All proceeds and products of the conversion, voluntary or involuntary, including, without limitation, those from sale, exchange, transfer, collection, loss, damage, disposition, substitution or replacement of any of the foregoing; whether into cash, liquidated claims or otherwise.

All of the foregoing estates, right, properties and interests hereby conveyed to the Beneficiary may be referred to herein as the “Trust Property”. Notwithstanding the foregoing, (x) the Trust Property that secures the Existing Senior Notes Obligations shall be limited to Trust Property consisting of any Principal Property (as defined in the Existing Senior Notes Indenture (in each case as in effect on the date hereof)) of the Trustor (the “Designated Existing Senior Notes Trust Property”), all of which Trust Property shall also ratably secure all other Applicable Obligations of the Trustor, and the Trust Property Proceeds (as defined in Section 4.04(a)) that are to be applied to the Existing Senior Notes Obligations shall be limited to Trust Property Proceeds resulting from the sale of, and Rents and other amounts generated by the holding, leasing, management, operation or other use pursuant to this Deed of Trust of, the Designated Existing Senior Notes Trust Property, with such Trust Property Proceeds to also be applied ratably to all other Applicable Obligations of the Trustor and (y) the Trust Property that secures the RAI Senior Notes Obligations shall be limited to Trust Property consisting of any Principal Property (as defined in the New Senior Notes Indenture (as in effect on the date hereof) or the Refinancing Senior Notes Indenture) of the Trustor (the “Designated RAI Senior Notes Trust Property”, and together with the Designated Existing Senior Notes Trust Property, the “Limited Trust Property”), all of which Trust Property shall also ratably secure all other Applicable Obligations of the Trustor, and the Trust Property Proceeds (as defined in Section 4.04(a)) that are to be applied to the RAI Senior Notes Obligations shall be limited to Trust Property Proceeds resulting from the sale of, and Rents and other amounts generated by the holding, leasing, management, operation or other use pursuant to this Deed of Trust of, the Designated RAI Senior Notes Trust Property, with such Trust Property Proceeds to also be applied ratably to all other Applicable Obligations of the Trustor.

“Applicable Obligations” shall mean all of the Obligations; provided that (x) the Existing Senior Notes Obligations shall be excluded from the Applicable Obligations of the Trustor to the extent the Existing Senior Notes Documents do not require the Existing Senior Notes Obligations to be secured pursuant to this Deed of Trust, (y) the New Senior Notes Obligations shall be excluded from the Applicable Obligations of the Trustor to the extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured pursuant to this Deed of Trust, and (z) the Refinancing Senior Notes Obligations shall be excluded from the Applicable Obligations of the Trustor to the extent the Refinancing Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured pursuant to this Agreement.

          TO HAVE AND TO HOLD the above granted and described Trust Property unto the Trustee for the benefit of the Beneficiary and to its successors and assigns forever, and the Trustor hereby covenants and agrees on behalf of itself and its successors and assigns to warrant

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and defend the Trust Property unto the Trustee for the benefit of the Beneficiary, its successors and assigns against the claim or claims of all persons and parties whatsoever.

          PROVIDED, HOWEVER, that if Obligations shall have been paid in cash at the time and in the manner stipulated in the Secured Debt Agreements and all other sums payable hereunder and all other indebtedness secured hereby shall have been paid and all other covenants contained in the Secured Debt Agreements (as defined below) shall have been performed, then, in such case the Beneficiary shall, subject to the provisions of Section 6.19 of this Deed of Trust, at the request and expense of the Trustor, satisfy this Deed of Trust (without recourse and without any representation or warranty) and the estate, right, title and interest of the Beneficiary in the Trust Property shall cease, and upon payment to the Beneficiary of all reasonable costs and expenses incurred for the preparation of the release hereinafter referenced and all recording costs if allowed by law, the Beneficiary shall release this Deed of Trust and the lien hereof by proper instrument.

ARTICLE I

REPRESENTATIONS, WARRANTIES, COVENANTS

          1.01 Title to this Property. The Trustor represents and warrants: (a) it has good and marketable fee title to the Trust Property, free and clear of any liens and encumbrances, other than Liens permitted under Section 8.03 of the Credit Agreement (or, after the CA Termination Date (as defined below), the Credit Agreement as in effect immediately prior to the occurrence of the CA Termination Date) and any other easements, rights and claims of record (collectively “Permitted Liens”), and is lawfully seized and possessed of the Trust Property; (b) this Deed of Trust is a valid first priority lien upon the Trust Property subject to the Permitted Liens; (c) it has full power and authority to encumber the Trust Property in the manner set forth herein; and (d) there are no defenses or offsets to this Deed of Trust or to the Obligations which it secures. The Trustor shall preserve such title and the validity and priority of this Deed of Trust and shall forever warrant and defend the same to the Beneficiary and the Beneficiary’s successors and assigns against the claims of all persons and parties whatsoever. The Trustor shall take no action nor shall it fail to take any action which could result in an impairment of the lien of this Deed of Trust or which could form the basis for any Person(s) to claim an interest in the Trust Property (including, without limitation, any claim for adverse use or possession or any implied dedication or easement by prescription other than leases permitted under the Credit Agreement). If any Lien (other than Permitted Liens) is asserted against the Trust Property, the Trustor shall promptly, at its expense: (a) provide the Beneficiary with written notice of such Lien, including information relating to the amount of the Lien asserted; and (b) pay the Lien in full or take such other action to cause the Lien to be released, or, so long as the Lien of this Deed of Trust is not compromised, contest the same pursuant to the provisions of the Credit Agreement. From and after the occurrence of an Event of Default, the Beneficiary may, but shall not be obligated, to pay any such asserted Lien if not timely paid by the Trustor.

          1.02 Compliance with Law. The Trustor represents and warrants that it possesses all material certificates, licenses, authorizations, registrations, permits and/or approvals necessary for the ownership, operation, leasing and management of the Trust Property, including, without limitation, all material environmental permits, all of which are in full force and effect

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and not the subject of any revocation proceeding, undisclosed amendment, release, suspension, forfeiture or the like. The present and contemplated use and occupancy of the Trust Property does not conflict with or violate any such certificate, license, authorization, registration, permit or approval, including, without limitation, any certificate of occupancy which may have been issued for the Trust Property. The Trustor will not take any action, or fail to take any required action, so as to compromise or adversely affect the zoning classification of the Trust Property.

          1.03 Payment and Performance of Obligations. Subject to the terms of the Secured Debt Agreements, the Trustor shall pay all of the Obligations when due and payable without offset or counterclaim, and shall observe and comply in all material respects with all of the terms, provisions, conditions, covenants and agreements to be observed and performed by it under this Deed of Trust, the other Credit Documents to which it is a party, the Secured Credit Card Agreements, the Secured Hedging Agreements, the Existing Senior Notes Documents, the New Senior Notes Documents and the Refinancing Senior Notes Documents (collectively, the “Secured Debt Agreements”).

          1.04 Maintenance, Repair, Alterations, Etc. The Trustor will: (i) keep and maintain the Trust Property, to the extent used in Trustor’s day to day business, in good condition and repair (normal wear and tear excepted); (ii) make or cause to be made, as and when necessary, all material repairs, renewals and replacements, structural and nonstructural, exterior and interior, ordinary and extraordinary, foreseen and unforeseen which are necessary to so maintain the Trust Property in Trustor’s reasonable business judgment; (iii) restore any Improvement, to the extent used in Trustor’s day to day business, which may be damaged or destroyed so that the same shall be at least substantially equal to its value, condition and character immediately prior to the damage or destruction; (iv) not commit or permit any waste or deterioration (normal wear and tear excepted) of the Trust Property, to the extent used in Trustor’s day to day business; (v) not permit any material Improvements, to the extent used in Trustor’s day to day business, to be demolished or substantially altered in any manner that substantially decreases the value thereof; (vi) promptly pay when due all claims for labor performed and materials furnished therefor or contest such claim and; (vii) comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental authorities having jurisdiction over the Trust Property, as well as comply with the provisions of any lease, easement or other agreement affecting all or any part of the Trust Property.

          1.05 Required Insurance; Use of Proceeds. The Trustor will, at its expense, at all times provide, maintain and keep in force policies of property, hazard and liability insurance in accordance with Section 7.03 of the Credit Agreement with respect to the Trust Property, together with statutory workers’ compensation insurance with respect to any work to be performed on or about the Trust Property. To the extent required under the Credit Agreement, the Trustor shall give prompt written notice to the Beneficiary of the occurrence of any material damage to or material destruction of the Improvements or the Equipment. In the event of any damage to or destruction of the Trust Property or any part thereof, so long as a Noticed Event of Default (as defined in Section 3.03(a) hereof) has not occurred and is not continuing the Trustee and Beneficiary will release any interest they have in the proceeds of any insurance to the Trustor on account of such damage or destruction and Trustor may use such proceeds for repair restoration replacement or other business purposes as Trustor may reasonably determine. In the event of foreclosure of the Lien of this Deed of Trust or other transfer of title or assignment of

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the Trust Property in extinguishment, in whole or in part, of the Obligations, all right, title and interest of the Trustor in and to all proceeds then payable under any policy of insurance required by this Deed of Trust shall inure to the benefit of and pass to the successor in interest of the Trustor, or the purchaser or mortgagor of the Trust Property. After the occurrence of an Event of Default, the Beneficiary shall be afforded the right to participate in and approve the settlement of any claim made by the Trustor against the insurance company.

          1.06 Preservation of Property. The Trustor agrees to pay for any and all reasonable and actual fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Beneficiary’s liens on, and security interest in, the Trust Property, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices (including stamp and mortgage recording taxes or other taxes imposed on the Beneficiary by virtue of its ownership of this Deed of Trust), which are imposed upon the recording of this Deed of Trust or thereafter, all reasonable attorneys’ fees, payment or discharge of any taxes or Liens upon or in respect of the Trust Property, premiums for insurance with respect to the Trust Property and all other reasonable fees, costs and expenses in connection with protecting, maintaining or preserving the Trust Property and the Beneficiary’s interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Trust Property.

          1.07 Condemnation. Should the Trustor receive any notice that a material portion of the Trust Property or interest therein may be taken or damaged by reason of any public improvements or condemnation proceeding or in any other similar manner (a “Condemnation”), the Trustor, to the extent required under the Credit Agreement, shall give prompt written notice thereof to the Beneficiary. In the event of any Condemnation, after the occurrence and during the continuation of any Event of Default, the Beneficiary shall have the right to participate in any negotiations or litigation and shall have the right to approve any settlement. So long as no Noticed Event of Default has occurred and is continuing, the Trustee and Beneficiary will release any interest they have in any and all compensation, awards, damages and proceeds paid to the Trustor or the Borrower on account of such Condemnation and Trustor may use such compensation awards, damages and proceeds for repair, restoration, replacement or other business purposes as Trustor may reasonably determine.

          1.08 Inspections. The Trustor hereby authorizes the Beneficiary, its agents, employees and representatives, upon reasonable prior written notice to the Trustor (except in an emergency or following the occurrence and during the continuance of any Event of Default, in which case notice shall not be required) to visit and inspect the Trust Property or any portion(s) thereof, all at such reasonable times and as often as the Beneficiary may reasonably request.

          1.09 Transfers. Except as otherwise permitted in accordance with the terms of the Credit Agreement, no part of the Trust Property or of any legal or beneficial interest in the Trust Property shall be sold, assigned, conveyed, transferred or otherwise disposed of (whether voluntarily or involuntarily, directly or indirectly, by sale of stock or any interest in the Trustor, or by operation of law or otherwise).

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          1.10 After Acquired Property Interests. Subject to applicable law, all right, title and interest of the Trustor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to, the Trust Property, hereafter acquired by, or released to, the Trustor or constructed, assembled or placed by the Trustor on the Land, and all conversions of the security constituted thereby (collectively, “After Acquired Property Interests”), immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, conveyance, assignment or other act by the Trustor, shall become subject to the lien of this Deed of Trust as fully and completely, and with the same effect, as though now owned by the Trustor and specifically described in the granting clauses hereof. The Trustor shall execute and deliver to the Beneficiary all such other assurances, mortgages, conveyances or assignments thereof as the Beneficiary may reasonably require for the purpose of expressly and specifically subjecting such After Acquired Property Interests to the lien of this Deed of Trust. The Trustor hereby irrevocably authorizes and appoints the Beneficiary as the agent and attorney-in-fact of the Trustor to execute all such documents and instruments on behalf of the Trustor, which appointment shall be irrevocable and coupled with an interest, if the Trustor fails or refuses to do so within ten (10) days after a request therefor by the Beneficiary.

ARTICLE II

SECURITY AGREEMENT

          2.01 Grant of Security; Incorporation by Reference. This Deed of Trust shall, in addition to constituting a mortgage lien on those portions of the Trust Property classified as real property (including fixtures to the extent they are real property), constitute a security agreement within the meaning of the Uniform Commercial Code or within the meaning of the common law with respect to those parts of the Trust Property classified as personal property (including fixtures to the extent they are personal property) to the extent a security interest therein can be created by this Deed of Trust. The Trustor hereby grants to the Beneficiary a security interest in and to the following property whether now owned or hereafter acquired (collectively, the “Secured Property”) for the benefit of the Beneficiary to further secure the payment and performance of its Applicable Obligations:

     (a) Those parts of the Trust Property classified as personal property (including (i) fixtures to the extent they are personal property and (ii) personal property and fixtures that are leased, but only to the extent the Trustor can grant to the Beneficiary a security interest therein without breaching the terms of such lease);

     (b) All general intangibles, contract rights, accounts and proceeds arising from all insurance policies required to be maintained by the Trustor and related to the Trust Property hereunder;

     (c) All proceeds of any judgment, award or settlement in any condemnation or eminent domain proceeding in connection with the Trust Property, together with all general intangibles, contract rights and accounts arising therefrom;

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     (d) All permits, consents and other governmental approvals in connection with the construction of the Improvements or the operation of the Trust Property, to the extent any of the same may be assigned, transferred, pledged or subjected to a security interest;

     (e) All plans and specifications, studies, tests or design materials relating to the design, construction, repair, alteration or leasing of the Trust Property, to the extent any of the same may be assigned, transferred, pledged or subjected to a security interest; and

     (f) All cash and non-cash proceeds of the above-mentioned items.

; provided that notwithstanding the foregoing, Secured Property securing Existing Senior Notes Obligations and RAI Senior Notes Obligations shall be limited to Limited Trust Property, as the case may be.

          The provisions contained in the Security Agreement are hereby incorporated by reference into this Deed of Trust with the same effect as if set forth in full herein. In the event of a conflict between the provisions of this Article II and the Security Agreement, the Security Agreement shall control and govern and the Trustor shall comply therewith.

          2.02 Fixture Filing and Financing Statements. This Deed of Trust constitutes a security agreement, fixture filing and financing statement as those terms are used in the Uniform Commercial Code. For purposes of this Section, this Deed of Trust is to be filed and recorded in, among other places, the real estate records of Forsyth County and the following information is included: (1) the Trustor shall be deemed the “Debtor” with the address set forth for the Trustor on the first page of this Deed of Trust which the Trustor certifies is accurate; (2) the Beneficiary shall be deemed to be the “Secured Party” with the address set forth for the Beneficiary on the first page of this Deed of Trust and shall have all of the rights of a secured party under the Uniform Commercial Code; (3) this Deed of Trust covers goods which are or are to become fixtures on the real property described in Exhibit A attached hereto; (4) the name of the record owner of the land is the Debtor; (5) the organizational identification number of the Debtor is NC0711678; (6) the Debtor is a corporation, organized under the laws of the State of North Carolina; and (7) the legal name of the Debtor is R. J. Reynolds Tobacco Company. The Debtor hereby authorizes the Beneficiary to file any financing statements and terminations thereof or amendments or modifications thereto without the signature of the Debtor where permitted by law.

ARTICLE III

ASSIGNMENT OF LEASES, RENTS AND PROFITS

     3.01 Assignment. The Trustor hereby absolutely, irrevocably and unconditionally sells, assigns, transfers and conveys to the Beneficiary all of the Trustor’s right, title and interest in and to all current and future Leases and Rents, including those now due, past due, or to become due by virtue of any Lease or other agreement for the occupancy or use of all or any part of the Trust Property regardless of to whom the Rents are payable. The Trustor

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intends that this assignment of Leases and Rents constitutes a present and absolute assignment and not an assignment for additional security only. Such assignment to the Beneficiary shall not be construed to bind the Beneficiary to the performance of any of the covenants, conditions or provisions contained in any such Lease or otherwise impose any obligation upon the Beneficiary. The Trustor covenants that the Trustor will not hereafter collect or accept payment of any Rents more than one month prior to the due dates of such Rents, and that no payment of any of the Rents to accrue for any portion of the Trust Property (other than a de minimis amount) will be waived, released, reduced, discounted or otherwise discharged or compromised by the Trustor, except as may be approved in writing by the Beneficiary. The Trustor agrees that it will not assign any of the Leases or Rents to any other Person. The Beneficiary shall have no liability for any loss which may arise from a failure or inability to collect Rents, proceeds or other payments. The Trustor shall maintain all security deposits in accordance with applicable law.

          3.02 Revocable License; Agent. Notwithstanding the foregoing, subject to the terms of this Article III, the Beneficiary grants to the Trustor a revocable license to operate and manage the Trust Property and to collect the Rents and hereby directs each tenant under a Lease to pay such Rents to, or at the direction of, the Trustor, until such time as the Beneficiary provides notice to the contrary to such tenants. The Trustor shall hold the Rents, or a portion thereof sufficient to discharge all current sums due in respect of the Obligations, in trust for the benefit of the Beneficiary for use in the payment of such sums.

          3.03 Rents. (a) Upon the occurrence and during the continuance of a Noticed Event of Default, without the need for notice or demand, the license granted pursuant to this Article III shall immediately and automatically be revoked and the Beneficiary shall immediately be entitled to possession of all Rents, whether or not the Beneficiary enters upon or takes control of the Trust Property. Upon the revocation of such license, the Trustor grants to the Beneficiary the right, at its option, to exercise all the rights granted in Section 4.02(a). Nothing herein contained shall be construed as constituting the Beneficiary a trustee in possession in the absence of the taking of actual possession of the Trust Property by the Beneficiary pursuant to Section 4.02(a). As used herein, a “Noticed Event of Default” shall mean (i) an Event of Default with respect to the Borrower under Section 9.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Beneficiary has given the Borrower notice that such Event of Default constitutes a “Noticed Event of Default”.

          (b) From and after the termination of such license, the Trustor may, at the Beneficiary’s direction, be the agent for the Beneficiary in collection of the Rents and all of the Rents so collected by the Trustor shall be held in trust by the Trustor for the sole and exclusive benefit of the Beneficiary and the Trustor shall, within one (1) business day after receipt of any Rents, pay the same to the Beneficiary to be applied by the Beneficiary as provided for herein. All Rents collected shall be applied against all expenses of collection, including, without limitation, attorneys’ fees, against costs of operation and management of the Trust Property and against the Obligations, in whatever order or priority as to any of the items so mentioned as the Beneficiary directs in its sole and absolute discretion and without regard to the adequacy of its security. Neither the demand for or collection of Rents by the Beneficiary shall constitute any assumption by the Beneficiary of any obligations under any Lease or agreement relating thereto.

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          (c) Any reasonable funds expended by the Beneficiary to take control of and manage the Trust Property and collect the Rents shall become part of the Obligations secured hereby. Such amounts shall be payable from the Trustor to the Beneficiary upon the Beneficiary’s demand therefor and shall bear interest from the date of disbursement at the interest rate set forth in Section 1.08(c) of the Credit Agreement unless payment of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from the Trustor under applicable law.

          3.04 Sale of Trust Property. (a) Upon any sale of any portion of the Trust Property by or for the benefit of the Beneficiary pursuant to this Deed of Trust, the Rents attributable to the part of the Trust Property so sold shall be included in such sale and shall pass to the purchaser free and clear of any rights granted herein to the Trustor.

          (b) The Trustor acknowledges and agrees that, upon recordation of this Deed of Trust, the Beneficiary’s interest in the Rents shall be deemed to be fully perfected, “choate” and enforceable against the Trustor and all third parties, including, without limitation, any debtor in possession or trustee in any case under title 11 of the United States Code, without the necessity of (i) commencing a foreclosure action with respect to this Deed of Trust, (ii) furnishing notice to the Trustor or tenants under the Leases, (iii) making formal demand for the Rents, (iv) taking possession of the Trust Property as a lender-in-possession, (v) obtaining the appointment of a receiver of the Rents, (vi) sequestering or impounding the Rents or (vii) taking any other affirmative action.

          3.05 Bankruptcy Provisions. Without limiting the provisions of Article III hereof or the absolute nature of the assignment of the Rents hereunder, the Trustor and the Beneficiary agree that, to the extent that the assignment of the Rents hereunder is deemed to be other than an absolute assignment, (a) this Deed of Trust shall constitute a “security agreement” for purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest created by this Deed of Trust extends to property of the Trustor acquired before the commencement of a bankruptcy case and to all amounts paid as Rents and (c) such security interest shall extend to all Rents acquired by the estate after the commencement of any bankruptcy case. Without limitation of the absolute nature of the assignment of the Rents hereunder, to the extent the Trustor (or the Trustor’s bankruptcy estate) shall be deemed to hold any interest in the Rents after the commencement of a voluntary or involuntary bankruptcy case, the Trustor hereby acknowledges and agrees that such Rents are and shall be deemed to be “cash collateral” under Section 363 of the Bankruptcy Code.

ARTICLE IV

EVENTS OF DEFAULT AND REMEDIES

          4.01 Events of Default. The occurrence of (i) an “Event of Default” under and as defined in the Credit Agreement, (ii) any “event of default” under the Existing Senior Notes Documents, the New Senior Notes Documents or the Refinancing Senior Notes Documents and (iii) any payment default, after any applicable grace period, under any Secured Credit Card Agreement or any Secured Hedging Agreement shall constitute an Event of Default (each, an “Event of Default”) hereunder.

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          4.02 Remedies Upon Default. Upon the occurrence of a Noticed Event of Default, the Beneficiary may, in the Beneficiary’s sole discretion, either itself or by or through the Trustee, a nominee, assignee or otherwise, to the fullest extent permitted by law, exercise any or all of the following rights and remedies individually, collectively or cumulatively:

           (a) either in person or by its agent, with or without bringing any action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, (i) enter upon and take possession of the Trust Property or any part thereof and of all books, records and accounts relating thereto or located thereon, in its own name or in the name of the Trustor, and do or cause to be done any acts which it deems necessary or desirable to preserve the value of the Trust Property or any part thereof or interest therein, collect the income therefrom or protect the security hereof; (ii) with or without taking possession of the Trust Property make such repairs, alterations, additions and improvements as the Beneficiary deems necessary or desirable and do any and all acts and perform any and all work which the Beneficiary deems necessary or desirable to complete any unfinished construction on the Trust Property; (iii) make, cancel or modify Leases and sue for or otherwise collect the Rents thereof, including those past due and unpaid; (iv) make any payment or perform any act which the Trustor has failed to make or perform hereunder; (v) appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of the Beneficiary or the Trustee; (vi) pay, purchase, contest or compromise any encumbrance, charge or Lien on the Trust Property; and (vii) take such other actions as the Beneficiary deems necessary or desirable;

           (b) commence and maintain one or more actions at law or in equity or by any other appropriate remedy (i) to protect and enforce the rights of the Beneficiary or the Trustee hereunder, including for the specific performance of any covenant or agreement herein contained (which covenants and agreements the Trustor agrees shall be specifically enforceable by injunctive or other appropriate equitable remedy), (ii) to collect any sum then due hereunder, (iii) to aid in the execution of any power herein granted, or (iv) to foreclose this Deed of Trust in accordance with Section 4.03 hereof;

           (c) exercise any or all of the remedies available to a secured party under the Uniform Commercial Code;

           (d) by notice to the Trustor (to the extent such notice is required to be given under the Credit Documents), but without formal demand, presentment, notice of intention to accelerate or of acceleration, protest or notice of protest, all of which are hereby waived by the Trustor, declare all of the Obligations (except for the Existing Senior Notes Obligations and the RAI Senior Notes Obligations) secured hereby to be immediately due and payable, and upon such declaration all of such indebtedness shall become and be immediately due and payable, anything in this Deed of Trust or any other Credit Documents to the contrary notwithstanding; and

           (e) exercise any other right or remedy available to the Beneficiary under the Secured Debt Agreements.

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          4.03 Right of Foreclosure. (a) Upon the occurrence of a Noticed Event of Default, the Beneficiary shall have the right, in its sole discretion, to instruct the Trustee to proceed at law or in equity to foreclose this Deed of Trust with respect to all or any portion of the Trust Property, in accordance with the applicable laws of jurisdiction in which the Trust Property is located. If the Trust Property consists of several lots, parcels or items of Trust Property, the Beneficiary may, in its sole discretion instruct the Trustee to: (i) designate the order in which such lots, parcels or items shall be offered for sale or sold, or (ii) elect to sell such lots, parcels or items through a single sale, or through two or more successive sales, or in any other manner the Beneficiary deems in its best interest. Should the Beneficiary desire that more than one sale or other disposition of the Trust Property be conducted, the Beneficiary may, at its option, instruct the Trustee to cause the same to be conducted simultaneously, or successively, on the same day, or at such different days or times and in such order as the Beneficiary may deem to be in its best interests, and no such sale shall terminate or otherwise affect the lien of this Deed of Trust on any part of the Trust Property not sold until all Obligations have been fully paid and performed. The Beneficiary may elect to sell the Trust Property for cash or credit. The Beneficiary may, to the extent permitted by law, instruct the Trustee to adjourn from time to time any sale by it to be made under or by virtue of this Deed of Trust by announcement at the time and place appointed for such sale or for such adjourned sale or sales; and, except as otherwise provided by an applicable provision of law, the Beneficiary may make such sale at the time and place to which the same shall be so adjourned. With respect to all components of the Trust Property, the Beneficiary is hereby irrevocably appointed the true and lawful attorney-in-fact of the Trustor (coupled with an interest), in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Trust Property in connection with any foreclosure of this Deed of Trust, and for that purpose the Beneficiary may execute all necessary instruments of conveyance, assignment, transfer and delivery, and may substitute one or more persons with such power, the Trustor hereby ratifying and confirming all that its said attorney-in-fact or such substitute or substitutes shall lawfully do by virtue hereof. Notwithstanding the foregoing, the Trustor, if so requested by the Beneficiary, shall ratify and confirm any such sale or sales by executing and delivering to the Beneficiary or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of the Beneficiary, for such purpose, and as may be designated in such request. To the extent permitted by law, any such sale or sales made under or by virtue of this Article IV shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of the Trustor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against the Trustor and against any and all persons claiming or who may claim the same, or any part thereof, from, through or under the Trustor. Upon any sale made under or by virtue of this Article IV, the Beneficiary may, to the extent permitted by law, bid for and acquire the Trust Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the Obligations secured hereby the net sales price after deducting therefrom the expenses of the sale and the cost of the action and any other sums which the Beneficiary is authorized to deduct by law or under this Deed of Trust.

          (b) Any foreclosure of this Deed of Trust and any other transfer of all or any part of the Trust Property in extinguishment of all or any part of the Obligations may, at the Beneficiary’s option, be subject to any or all Leases of all or any part of the Trust Property and the rights of tenants under such Leases. No failure to make any such tenant a defendant in any foreclosure proceedings or to foreclose or otherwise terminate any such Lease and the rights of

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any such tenant in connection with any such foreclosure or transfer shall be, or be asserted to be, a defense or hindrance to any such foreclosure or transfer or to any proceedings seeking collection of all or any part of the Obligations (including, without limitation, any deficiency remaining unpaid after completion of any such foreclosure or transfer).

          (c) If the Trustor retains possession of the Trust Property or any part thereof subsequent to a sale, the Trustor will be considered a tenant at sufferance of the purchaser, and will, if the Trustor remains in possession after demand to remove, be guilty of forcible detainer and will be subject to eviction and removal, forcible or otherwise, with or without process of law, and all damages to the Trustor by reason thereof are hereby expressly waived by the Trustor.

          (d) It is agreed and understood that (x) this Deed of Trust may be enforced only by the action of the Beneficiary acting upon the instructions of the Required Lenders or, if the CA Termination Date has occurred, the holders of a majority of the outstanding principal amount of all remaining Obligations, provided that if prior to the CA Termination Date a payment default with respect to at least $300,000,000 principal amount in the aggregate of Existing Senior Notes, New Senior Notes and/or Refinancing Senior Notes has continued for at least 180 days (and such defaulted payment has not been received pursuant to a drawing under any letter of credit), the holders of a majority of the outstanding principal amount of the Indebtedness subject to such payment default or defaults can direct the Beneficiary to commence and continue enforcement of the Liens created hereunder, which the Beneficiary shall comply with subject to receiving any indemnity which it reasonably requests, provided further, that the Beneficiary shall thereafter comply only with the directions of the Required Lenders as to carrying out such enforcement so long as such directions are not adverse to the aforesaid directions of the holders of Indebtedness subject to such payment default or defaults, and (y) no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Deed of Trust or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies shall be exercised exclusively by the Beneficiary for the benefit of the Secured Creditors as their interest may appear upon the terms of this Deed of Trust and the other Secured Debt Agreements.

          4.04 Application of Proceeds. (a) To the fullest extent permitted by law, the proceeds of any sale of, and the Rents and other amounts generated by the holding, leasing, management, operation or other use of, each item of the Trust Property pursuant to this Deed of Trust (the “Trust Property Proceeds”) shall be applied by the Beneficiary (or the receiver, if one is appointed) as follows:

          (i) first, to the payment of all Obligations owing to the Beneficiary of the type described in clauses (vii), (viii), (ix), (x) and (xi) of the definition of Obligations herein;

           (ii) second, to the extent Trust Property Proceeds of Trust Property remain after the application pursuant to preceding clause (i), an amount equal to the outstanding Applicable Obligations secured by such item of Trust Property shall be paid to the Secured Creditors as their interests may appear, with (x) each Secured Creditor receiving an amount equal to its outstanding Applicable Obligations secured by such item of Trust

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Property or, if the proceeds are insufficient to pay in full all such Applicable Obligations, its Pro Rata Share of the amount so remaining to be distributed and (y) in the case of the Credit Document Obligations, the Existing Senior Notes Obligations, the New Senior Notes Obligations and the Refinancing Senior Notes Obligations included in such Applicable Obligations, any such amount to be applied (1) first to the payment of interest in respect of the unpaid principal amount of Loans, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, as the case may be, (2) second to the payment of principal of Loans, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, as the case may be, and (3) third to the other Credit Document Obligations, Existing Senior Notes Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be; and

           (iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii) to the Trustor or, to the extent directed by the Trustor or a court of competent jurisdiction, to whomever may be lawfully entitled to receive such surplus.

          (b) For purposes of this Agreement, “Pro Rata Share” shall mean when calculating a Secured Creditor’s portion of any distribution or amount pursuant to clause (a) above, the amount (expressed as a percentage) equal to a fraction the numerator of which is the then outstanding amount of the relevant Applicable Obligations secured by the relevant item of Trust Property owed such Secured Creditor and the denominator of which is the then outstanding amount of all relevant Applicable Obligations secured by the relevant item of Trust Property.

          (c) All payments required to be made to the (i) Lender Creditors hereunder shall be made to the Administrative Agent for the account of the respective Lender Creditors, (ii) Credit Card Issuers hereunder shall be made to the Credit Card Issuer(s) under the applicable Secured Credit Card Agreement, (iii) Hedging Creditors hereunder shall be made to the paying agent under the applicable Secured Hedging Agreement or, in the case of Secured Hedging Agreements without a paying agent, directly to the applicable Hedging Creditors, (iv) Existing Senior Notes Creditors hereunder shall be made to the Existing Senior Notes Trustee for the account of the respective Existing Senior Notes Creditors, (v) New Senior Notes Creditors hereunder shall be made to the New Senior Notes Trustee for the account of the respective New Senior Notes Creditors and (vi) Refinancing Senior Notes Creditors hereunder shall be made to the Refinancing Senior Notes Trustee for the account of the respective Refinancing Senior Notes Creditors.

          (d) For purposes of applying payments received in accordance with this Section 4.04, the Beneficiary shall be entitled to rely upon (i) the Administrative Agent for a determination of the outstanding Credit Document Obligations, (ii) any Credit Card Issuer for a determination of the outstanding Credit Card Obligations owed to such Credit Card Issuer, (iii) upon any Hedging Creditor for a determination of the outstanding Hedging Obligations owed to such Hedging Creditor, (iv) the Existing Senior Notes Trustee for a determination of the outstanding Existing Senior Notes Obligations, (v) the New Senior Notes Trustee for a determination of the outstanding New Senior Notes Obligations and (vi) the Refinancing Senior Notes Trustee for a determination of the outstanding Refinancing Senior Notes Obligations. Unless it has actual knowledge (including by way of written notice from a Secured Creditor) to

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the contrary, the Administrative Agent under the Credit Agreement, in furnishing information pursuant to the preceding sentence, and the Beneficiary, in acting hereunder, shall be entitled to assume that no Credit Document Obligations other than principal, interest and regularly accruing fees are owing to any Lender Creditor.

          (e) It is understood and agreed that the Trustor shall remain liable to the extent of any deficiency between (x) the amount of the Obligations for which it is responsible directly or as a guarantor that are satisfied with proceeds of the Trust Property and (y) the aggregate outstanding amount of such Obligations.

          4.05 Appointment of Receiver. Upon the occurrence and during the continuance of a Noticed Event of Default, the Beneficiary as a matter of strict right and without notice to the Trustor or anyone claiming under the Trustor, and without regard to the adequacy or the then value of the Trust Property or the interest of the Trustor therein or the solvency of any party bound for payment of the Obligations, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Trust Property, and the Trustor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual rights, powers and duties of receivers in like or similar cases and all the rights, powers and duties of the Beneficiary in case of entry as provided in Section 4.02 hereof, including but not limited to the full power to rent, maintain and otherwise operate the Trust Property upon such terms as are approved by the court and shall continue as such and exercise all such powers until the date of confirmation of sale of the Trust Property unless such receivership is sooner terminated.

          4.06 Exercise of Rights and Remedies. The entering upon and taking possession of the Trust Property, the collection of any Rents and the exercise of any of the rights contained in this Article IV, shall not, alone, cure or waive any Event of Default or notice of default hereunder or invalidate any act done in response to such Event of Default or pursuant to such notice of default and, notwithstanding the continuance in possession of the Trust Property or the collection, receipt and application of Rents, the Beneficiary shall be entitled to exercise every right provided for herein or in the Secured Debt Agreements, or at law or in equity upon the occurrence of any Event of Default.

          4.07 Remedies Not Exclusive. The Beneficiary shall be entitled to enforce payment and performance of the Obligations and to exercise all rights and powers under this Deed of Trust or other agreement or any laws now or hereafter in force, notwithstanding that some or all of the Obligations may now or hereafter be otherwise secured, whether by mortgage, deed of trust, security deed, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement, whether by court action or pursuant to the powers herein contained, shall prejudice or in any manner affect the Beneficiary’s right to realize upon or enforce any other security now or hereafter held by the Beneficiary, it being agreed that the Beneficiary shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by the Beneficiary in such order and manner as it may in its absolute and sole discretion and election determine. No remedy herein conferred upon or reserved to the Beneficiary is intended to be exclusive of any other remedy herein or in any of the other Secured Debt Agreements or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every

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power or remedy to which the Beneficiary is entitled may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Beneficiary, and the Beneficiary may pursue inconsistent remedies. No delay or omission of the Beneficiary to exercise any right or power accruing upon any Event of Default shall impair any right or power or shall be construed as a waiver of any Event of Default or any acquiescence therein. If the Beneficiary shall have proceeded to invoke any right or remedy hereunder or under any other Secured Debt Agreement, and shall thereafter elect to discontinue or abandon it for any reason, the Beneficiary shall have the unqualified right to do so and, in such an event, the rights and remedies of the Beneficiary shall continue as if such right or remedy had never been invoked, but no such discontinuance or abandonment shall waive any Event of Default which may then exist or the right of the Beneficiary thereafter to exercise any right or remedy under the Secured Debt Agreements for such Event of Default.

          4.08 WAIVER OF REDEMPTION, NOTICE, MARSHALLING, ETC. NOTWITHSTANDING ANYTHING HEREIN CONTAINED TO THE CONTRARY, TO THE EXTENT PERMITTED BY LAW, THE TRUSTOR ACKNOWLEDGING THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS HEREUNDER; (A) WILL NOT (I) AT ANY TIME INSIST UPON, OR PLEAD, OR IN ANY MANNER WHATSOEVER, CLAIM OR TAKE ANY BENEFIT OR ADVANTAGE OF ANY STAY OR EXTENSION OR MORATORIUM LAW, PRESENT OR FUTURE STATUTE OF LIMITATIONS, ANY LAW RELATING TO THE ADMINISTRATION OF ESTATES OF DECEDENTS, APPRAISEMENT, VALUATION, REDEMPTION, STATUTORY RIGHT OF REDEMPTION, OR THE MATURING OR DECLARING DUE OF THE WHOLE OR ANY PART OF THE OBLIGATIONS, NOTICE OF INTENTION OF SUCH MATURING OR DECLARING DUE, OTHER NOTICE (WHETHER OF DEFAULTS, ADVANCES, THE CREATION, EXISTENCE, EXTENSION OR RENEWAL OF ANY OF THE OBLIGATIONS OR OTHERWISE, EXCEPT FOR RIGHTS TO NOTICES EXPRESSLY GRANTED HEREIN OR IN THE SECURED DEBT AGREEMENTS), SUBROGATION, ANY SET-OFF RIGHTS, HOMESTEAD OR ANY OTHER EXEMPTIONS FROM EXECUTION OR SALE OF THE TRUST PROPERTY OR ANY PART THEREOF, WHEREVER ENACTED, NOW OR AT ANY TIME HEREAFTER IN FORCE, WHICH MAY AFFECT THE COVENANTS AND TERMS OF PERFORMANCE OF THIS DEED OF TRUST, OR (II) CLAIM, TAKE OR INSIST UPON ANY BENEFIT OR ADVANTAGE OF ANY LAW NOW OR HEREAFTER IN FORCE PROVIDING FOR THE VALUATION OR APPRAISAL OF THE TRUST PROPERTY OR ANY PART THEREOF, PRIOR TO ANY SALE OR SALES THEREOF WHICH MAY BE MADE PURSUANT TO ANY PROVISION HEREOF, OR PURSUANT TO THE DECREE, JUDGMENT OR ORDER OF ANY COURT OF COMPETENT JURISDICTION; OR (III) AFTER ANY SUCH SALE OR SALES, CLAIM OR EXERCISE ANY RIGHT UNDER ANY STATUTE HERETOFORE OR HEREAFTER ENACTED TO REDEEM THE TRUST PROPERTY SO SOLD OR ANY PART THEREOF; AND (B) COVENANTS NOT TO HINDER, DELAY OR IMPEDE THE EXECUTION OF ANY POWER HEREIN GRANTED OR DELEGATED TO THE TRUSTEE OR BENEFICIARY, BUT TO SUFFER AND PERMIT THE EXECUTION OF EVERY POWER AS THOUGH NO SUCH LAW OR LAWS HAD BEEN MADE OR ENACTED. THE TRUSTOR, FOR ITSELF AND ALL WHO MAY CLAIM UNDER IT, WAIVES, TO THE EXTENT THAT IT LAWFULLY MAY, ALL RIGHT TO HAVE THE TRUST PROPERTY MARSHALLED UPON ANY FORECLOSURE HEREOF.

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          4.09 Expenses of Enforcement. In connection with any action to enforce any remedy of the Beneficiary under this Deed of Trust, the Trustor agrees to pay all costs and expenses which may be paid or incurred by or on behalf of the Beneficiary or the Trustee, including, without limitation, reasonable attorneys’ fees, receiver’s fees, appraiser’s fees, outlays for documentary and expert evidence, stenographer’s charges, publication costs, and costs (which may be estimated as to items to be expended after entry of the decree) of procuring all such abstracts of title, title searches and examinations, title insurance policies and similar data and assurances with respect to title and value as the Beneficiary may deem necessary or desirable, and neither the Beneficiary nor any other Person shall be required to accept tender of any portion of the Obligations unless the same be accompanied by a tender of all such expenses, costs and commissions. All of the costs and expenses described in this Section 4.09, and such expenses and fees as may be incurred in the protection of the Trust Property and the maintenance of the Lien of this Deed of Trust, including the reasonable fees of any attorney employed by the Beneficiary or the Trustee in any litigation or proceeding, including appellate proceedings, affecting this Deed of Trust or the Trust Property (including, without limitation, the occupancy thereof or any construction work performed thereon), including probate and bankruptcy proceedings, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding whether or not an action is actually commenced, shall be immediately due and payable by the Trustor, with interest thereon at the rate of interest set forth in the Secured Debt Agreements and shall be part of the Obligations secured by this Deed of Trust.

          4.10 Indemnity. (a) The Trustor agrees to indemnify, reimburse and hold the Beneficiary, the Trustee, each other Secured Creditor and their respective successors, permitted assigns, employees, agents and servants (hereinafter in this Section 4.10 referred to individually, as “Indemnitee,” and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments and any and all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) (for the purposes of this Section 4.10 the foregoing are collectively called “expenses”) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Deed of Trust, or the documents executed in connection herewith or in any other way connected with the enforcement of any of the terms of, or the preservation of any rights hereunder, or in any way relating to or arising out of the ownership, lease, financing, possession, operation, condition, sale or other disposition, or use of the Trust Property, the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 4.10(a) for expenses, losses, damages or liabilities to the extent caused by the gross negligence or wilful misconduct of such Indemnitee. The Trustor agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, loss, damage, penalty, claim, demand, action, judgment or suit, the Trustor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the Trustor of any such assertion of which such Indemnitee has knowledge.

          (b) Without limiting the application of Section 4.10(a), the Trustor agrees to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages

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and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any material misrepresentation by Trustor in this Deed of Trust, or in any statement or writing contemplated by or made or delivered pursuant to or in connection with this Deed of Trust.

          (c) If and to the extent that the obligations of the Trustor under this Section 4.10 are unenforceable for any reason, the Trustor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

          4.11 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Trust Property. The indemnity obligations of the Trustor contained in Sections 4.09 and 4.10 shall continue in full force and effect notwithstanding the full payment of all of the Notes issued under the Credit Agreement, the termination of all Secured Hedging Agreements, the full payment of all Existing Senior Notes issued under the Existing Senior Notes Indenture, the full payment of all New Senior Notes issued under the New Senior Notes Indenture, the full payment of all Refinancing Senior Notes issued under the Refinancing Senior Notes Indenture and the payment of all of the other Obligations and notwithstanding the discharge thereof.

ARTICLE V

ADDITIONAL COLLATERAL

          5.01 Additional Collateral. (a) The Trustor acknowledges and agrees that its Applicable Obligations are secured by the Trust Property and various other collateral including, without limitation, at the time of execution of this Deed of Trust certain personal property of the Trustor described in the Credit Documents. The Trustor specifically acknowledges and agrees that the Trust Property, in and of itself, if foreclosed or realized upon would not be sufficient to satisfy the outstanding amount of the Obligations. Accordingly, the Trustor acknowledges that it is in the Trustor’s contemplation that the other collateral pledged to secure the Applicable Obligations may be pursued by the Beneficiary in separate proceedings in the various States, counties and other countries where such collateral may be located and additionally that the Trustor liable for payment of the Obligations will remain liable for any deficiency judgments in addition to any amounts the Beneficiary may realize on sales of other property or any other collateral given as security for the Obligations. Specifically, and without limitation of the foregoing, it is agreed that it is the intent of the parties hereto that in the event of a foreclosure of this Deed of Trust, the Indebtedness evidencing the Obligations shall not be deemed merged into any judgment of foreclosure, but rather shall remain outstanding. It is the further intent and understanding of the parties that the Beneficiary, following a Noticed Event of Default, may pursue all of its collateral with the Obligations remaining outstanding and in full force and effect notwithstanding any judgment of foreclosure or any other judgment which the Beneficiary may obtain.

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          (b) The Trustor acknowledges and agrees that the Trust Property and the property which may from time to time be encumbered by the other Secured Debt Agreements may be located in more than one State or country and therefore the Trustor waives and relinquishes any and all rights it may have, whether at law or equity, to require the Beneficiary to proceed to enforce or exercise any rights, powers and remedies it may have under the Secured Debt Agreements in any particular manner, in any particular order, or in any particular State or other jurisdiction. Furthermore, the Trustor acknowledges and agrees that the Beneficiary shall be allowed to enforce payment and performance of the Obligations and to exercise all rights and powers provided under this Deed of Trust, or the other Secured Debt Agreements or under any provision of law, by one or more proceedings, whether contemporaneous, consecutive or both in any one or more States in which the security is located. Neither the acceptance of this Deed of Trust, or any Credit Document nor its enforcement in one State, whether by court action, power of sale, or otherwise, shall prejudice or in any way limit or preclude enforcement of the Credit Documents through one or more additional proceedings, in that State or in any other State or country.

          (c) The Trustor further agrees that any particular remedy or proceeding, including, without limitation, foreclosure through court action (in a state or federal court) or power of sale, may be brought and prosecuted in the local or federal courts of any one or more States as to all or any part of the Trust Property or the property encumbered by the Secured Debt Agreements wherever located, without regard to the fact that any one or more prior or contemporaneous proceedings have been situated elsewhere with respect to the same or any other part of the Trust Property and the property encumbered by the Secured Debt Agreements.

          (d) The Beneficiary may resort to any other security held by the Beneficiary for the payment of the Obligations in such order and manner as the Beneficiary may elect.

          (e) Notwithstanding anything contained herein to the contrary, the Beneficiary shall be under no duty to the Trustor or others, including, without limitation, the holder of any junior, senior or subordinate mortgage on the Trust Property or any part thereof or on any other security held by the Beneficiary, to exercise or exhaust all or any of the rights, powers and remedies available to the Beneficiary.

ARTICLE VI

MISCELLANEOUS

          6.01 Governing Law. The provisions of this Deed of Trust regarding the creation, perfection and enforcement of the liens and security interests herein granted shall be governed by and construed under the laws of the state in which the Trust Property is located. All other provisions of this Deed of Trust shall be governed by the laws of the State of New York (including, without limitation, Section 5-1401 of the General Obligations Law of the State of New York), without regard to choice of laws provisions.

          6.02 Limitation on Interest. It is the intent of the Trustor and the Beneficiary in the execution of this Deed of Trust and all other instruments evidencing or securing the Obligations to contract in strict compliance with applicable usury laws. In furtherance thereof,

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the Beneficiary and the Trustor stipulate and agree that none of the terms and provisions contained in this Deed of Trust shall ever be construed to create a contract for the use, forbearance or retention of money requiring payment of interest at a rate in excess of the maximum interest rate permitted to be charged by relevant law. If this Deed of Trust or any other instrument evidencing or securing the Obligations violates any applicable usury law, then the interest rate payable in respect of the Loans shall be the highest rate permissible by law.

     6.03 Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile transmission or cable communications) and mailed, telegraphed, telexed, telecopied, cabled or delivered (including by way of overnight courier):

(i)	if to the Trustor, at;
	R. J. Reynolds Tobacco Company
	401 North Main Street,
	Winston-Salem, North Carolina 27102
(ii)	if to the Beneficiary, at:
	JPMorgan Chase Bank, N.A.
	270 Park Avenue
	New York, New York 10017
	Attn.: Raju Nanoo
	Tel. No.: 212-270-2272
	Fax. No.: 212-270-5120

           (iii) if to any Lender (other than the Beneficiary), at such address as such Lender shall have specified in the Credit Agreement;

           (iv) if to any Credit Card Issuer, at such address as such Credit Card Issuer shall have specified in writing to the Trustor and the Beneficiary;

           (v) if to any Hedging Creditor, at such address as such Hedging Creditor shall have specified in writing to the Trustor and the Beneficiary;

           (vi) if to any Existing Senior Notes Creditor, at such address of the Existing Senior Notes Trustee as the Existing Senior Notes Trustee shall have specified in writing to the Trustor and the Beneficiary;

           (vii) if to any New Senior Notes Creditor, at such address of the New Senior Notes Trustee as the New Senior Notes Trustee shall have specified in writing to the Trustor and the Beneficiary;

           (viii) if to any Refinancing Senior Notes Creditor, at such address of the Refinancing Senior Notes Trustee as the Refinancing Senior Notes Trustee shall have specified in writing to the Trustor and the Beneficiary;

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or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. Except as otherwise expressly provided herein, all such notices and communications shall be deemed to have been duly given or made (i) in the case of any Secured Creditor, when received and (ii) in the case of the Trustor, when delivered to the Trustor in any manner required or permitted hereunder.

          6.04 Captions. The captions or headings at the beginning of each Article and Section hereof are for the convenience of the parties and are not a part of this Deed of Trust.

          6.05 Amendment. None of the terms and conditions of this Deed of Trust may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Trustor and the Beneficiary (with the consent of (x) if prior to the CA Termination Date, the Required Lenders or, to the extent required by Section 12.12 of the Credit Agreement, all of the Lenders and (y) if on and after the CA Termination Date, the holders of at least a majority of the outstanding principal amount of the Obligations remaining outstanding), provided that (i) no such change, waiver, modification or variance shall be made to Section 4.04 hereof or this Section 6.05 without the consent of each Secured Creditor adversely affected thereby and (ii) that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall require the written consent of the Requisite Creditors of such Class of Secured Creditors. For the purpose of this Agreement, the term “Class” shall mean each class of Secured Creditors, i.e., whether (1) the Lender Creditors as holders of the Credit Document Obligations, (2) the Credit Card Issuers as holders of the Credit Card Obligations, (3) the Hedging Creditors as holders of the Hedging Obligations, (4) the Existing Senior Notes Creditors as holders of the Existing Senior Notes Obligations, (5) the New Senior Notes Creditors as holders of the New Senior Notes Obligations and (6) the Refinancing Senior Notes Creditors as holders of the Refinancing Senior Notes Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of any Class shall mean each of (1) with respect to each of the Credit Document Obligations, the Required Lenders, (2) with respect to the Credit Card Obligations, the holders of at least a majority of all Credit Card Obligations outstanding from time to time, (3) with respect to the Hedging Obligations, the holders of at least a majority of all Secured Hedging Obligations outstanding from time to time, (4) with respect to the Existing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Existing Senior Notes, (5) with respect to the New Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the New Senior Notes and (6) with respect to the Refinancing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Refinancing Senior Notes.

          6.06 Obligations Absolute. The Obligations of the Trustor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of the Trustor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Deed of Trust, any other Credit Document or any other Secured Debt Agreement, except as specifically set forth in a waiver granted pursuant to Section 6.05 hereof; or (c) any amendment to or modification of any Credit Document or any other Secured Debt Agreement, except as specifically set forth in a waiver granted pursuant to

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Section 6.05 hereof, or any security for any of the Obligations; whether or not the Trustor shall have notice or knowledge of any of the foregoing.

          6.07 Further Assurances. The Trustor shall, upon the request of the Beneficiary and at the expense of the Trustor: (a) promptly correct any defect, error or omission which may be discovered in the contents of this Deed of Trust or any UCC financing statements filed in connection herewith; (b) promptly execute, acknowledge, deliver and record or file such further instruments (including, without limitation, further mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements and assignments of rents or leases) and promptly do such further acts as may be necessary, desirable or proper to carry out more effectively the purposes of this Deed of Trust and to subject to the liens and security interests hereof any property intended by the terms hereof to be covered hereby, including specifically, but without limitation, any renewals, additions, substitutions, replacements or appurtenances to the Trust Property; and (c) promptly execute, acknowledge, deliver, procure and record or file any document or instrument (including specifically any financing statement) deemed advisable by the Beneficiary to protect, continue or perfect the liens or the security interests hereunder against the rights or interests of third persons.

          6.08 Partial Invalidity. If any of the provisions of this Deed of Trust or the application thereof to any person, party or circumstances shall to any extent be invalid or unenforceable, the remainder of this Deed of Trust, or the application of such provision or provisions to persons, parties or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every provision of this Deed of Trust shall be valid and enforceable to the fullest extent permitted by law.

          6.09 Partial Releases. No release from the Lien of this Deed of Trust of any part of the Trust Property by the Beneficiary shall in any way alter, vary or diminish the force or effect of this Deed of Trust on the balance of the Trust Property or the priority of the Lien of this Deed of Trust on the balance of the Trust Property.

          6.10 Priority. This Deed of Trust is intended to and shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, excepting solely taxes and assessments levied on the real estate, to the extent of the maximum amount secured hereby.

          6.11 Covenants Running with the Land. All Obligations are intended by the Trustor and the Beneficiary to be, and shall be construed as, covenants running with the Trust Property. As used herein, the “Trustor” shall refer to the party named in the first paragraph of this Deed of Trust and to any subsequent owner of all or any portion of the Trust Property. All persons who may have or acquire an interest in the Trust Property shall be deemed to have notice of, and be bound by, the terms of the Credit Agreement and the other Secured Debt Agreements; provided, however, that no such party shall be entitled to any rights thereunder without prior written consent of the Beneficiary.

          6.12 Successors and Assigns. This Deed of Trust shall be binding upon and inure to the benefit of the Beneficiary and the Trustor and their respective successors and assigns.

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Except as otherwise permitted by Credit Agreement, the Trustor shall not, without the prior written consent of the Beneficiary, assign any rights, duties, or obligations hereunder.

          6.13 Purpose of Loans. The Trustor hereby represents and agrees that the Loans, Existing Senior Notes, New Senior Notes and Refinancing Senior Notes have or are being obtained or issued for business or commercial purposes, and the proceeds thereof will not be used for personal, family, residential, household or agricultural purposes.

          6.14 No Joint Venture or Partnership. The relationship created hereunder and under the other Credit Documents, the Secured Hedging Agreements, the Secured Credit Card Agreements, the Existing Senior Notes Documents, the New Senior Notes Documents and the Refinancing Senior Notes Documents is that of creditor/debtor. The Beneficiary does not owe any fiduciary or special obligation to the Trustor and/or any of the Trustor’s, officers, partners, agents, or representatives. Nothing herein or in any other Credit Document, any Secured Hedging Agreement, any Secured Credit Card Document, any Existing Senior Notes Document, any New Senior Notes Document or any Refinancing Senior Notes Document is intended to create a joint venture, partnership, tenancy-in-common or joint tenancy relationship between the Trustor and the Beneficiary.

          6.15 The Beneficiary as Collateral Agent for Secured Creditors. It is expressly understood and agreed that the rights and obligations of the Beneficiary as holder of this Deed of Trust and as Collateral Agent for the Secured Creditors and otherwise under this Deed of Trust are only those expressly set forth in this Deed of Trust and in the Credit Agreement. The Beneficiary shall act hereunder pursuant to the terms and conditions set forth herein in Section 11 of the Credit Agreement and in Annex M to the Security Agreement, the terms of which shall be deemed incorporated herein by reference as fully as if same were set forth herein in their entirety (for such purpose, treating each reference to the “Security Agreement” as a reference to this Deed of Trust, each reference to the “Collateral Agent” as a reference to the Beneficiary and each reference to an “Assignor” as a reference to a “Trustor”).

          6.16 Full Recourse. This Deed of Trust is made with full recourse to the Trustor and pursuant to and upon all the warranties, representations, covenants, agreements on the part of the Trustor contained herein, in the other Credit Documents and the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

          6.17 Reduction of Secured Amount. In the event the amount secured by this Deed of Trust is less than the aggregate Obligations, then the amount secured hereby shall be reduced only by the last and final sums that the Trustor or the Borrower repays with respect to the Obligations and shall not be reduced by any intervening repayments of the Obligations. So long as the balance of the Obligations exceeds the amount secured hereby, any payments of the Obligations shall not be deemed to be applied against, or to reduce, the portion of the Obligations secured by this Deed of Trust. Such payments shall instead be deemed to reduce only such portions of the Obligations as are secured by other collateral located outside of the state in which the Trust Property is located or are unsecured.

          6.18 Acknowledgment of Receipt. The Trustor hereby acknowledges receipt of a true copy of this Deed of Trust.

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          6.19 Release Payment. (a) After the Termination Date (as defined below), this Deed of Trust shall terminate (provided that all indemnities set forth herein shall survive any such termination) and the Beneficiary, at the request and expense of the Trustor, will execute and deliver to the Trustor a proper instrument or instruments (without recourse and without representation or warranty) acknowledging the satisfaction and termination of this Deed of Trust. As used in this Deed of Trust, (i) “CA Termination Date” shall mean the date upon which the Total Commitment has been terminated, no Letter of Credit or Note under the Credit Agreement is outstanding and all other Credit Document Obligations have been paid in full in cash (other than arising from indemnities for which no request for payment has been made) and (ii) “Termination Date” shall mean the date upon which (x) the CA Termination Date shall have occurred and (y) if (but only if) a Notified Non-Credit Agreement Event of Default (as defined below) shall have occurred and be continuing on the CA Termination Date (and after giving effect thereto), either (I) such Notified Non-Credit Agreement Event of Default shall have been cured or waived by the requisite holders of the relevant Obligations subject to such Notified Non-Credit Agreement Event of Default or (II) all Secured Credit Card Agreements and all Secured Hedging Agreements (if any) giving rise to a Notified Non-Credit Agreement Event of Default shall have been terminated and all Obligations subject to such Notified Non-Credit Agreement Event of Default shall have been paid in full (other than arising from indemnities for which no request for payment has been made). As used herein “Notified Non-Credit Agreement Event of Default” means (i) the acceleration of the maturity of any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes or the failure to pay at maturity any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, or the occurrence of any bankruptcy or insolvency Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, (ii) any Event of Default under a Secured Credit Card Agreement or (iii) any Event of Default under a Secured Hedging Agreement, in the case of any event described in clause (i), (ii) or (iii) to the extent the Existing Senior Notes Trustee, New Senior Notes Trustee, the Refinancing Senior Notes Trustee, the relevant Hedging Creditor or the relevant Credit Card Issuer, as the case may be, has given written notice to the Beneficiary that a “Notified Non-Credit Agreement Event of Default” exists; provided that such written notice may only be given if such Event of Default is continuing and, provided further, that any such Notified Non-Credit Agreement Event of Default shall cease to exist (I) once there is no longer any Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture, the Refinancing Senior Notes Indenture, the respective Secured Credit Card Agreement or the respective Secured Hedging Agreement, as the case may be, in existence, (II) in the case of an Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture, or the Refinancing Senior Notes Indenture, after all Existing Senior Notes Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be, have been repaid in full, (III) in the case of an Event of Default under a Secured Credit Card Agreement or a Secured Hedging Agreement, such Secured Hedging Agreement, as the case may be, has been terminated and all Credit Card Obligations or Hedging Obligations, as the case may be, thereunder have been repaid in full, (IV) in the case of an Event of Default under the Existing Senior Not es Indenture, New Senior Notes Indenture or the Refinancing Senior Notes Indenture, if the Existing Senior Notes Creditors, New Senior Notes Creditors or the Refinancing Senior Notes Creditors, as the case may be, holding at least a majority of the aggregate principal amount of the outstanding Existing Senior Notes, New Senior Notes or the Refinancing Senior Notes, as the case may be, at such time have rescinded such written notice

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and (V) in the case of an Event of Default under a Secured Credit Card Agreement or a Secured Hedging Agreement, the requisite Credit Card Issuers with Credit Card Obligations or Hedging Creditors with Hedging Obligations thereunder at such time have rescinded such written notice.

          (b) So long as no Notified Non-Credit Agreement Event of Default has occurred and is continuing, in the event that (x) prior to the CA Termination Date, (i) any part of the Trust Property is sold or otherwise disposed of in connection with a sale or other disposition permitted by Section 8.02 of the Credit Agreement (it being agreed for such purposes that a release will be deemed “permitted by Section 8.02 of the Credit Agreement” if the proposed transaction constitutes an exception to Section 8.02(f) of the Credit Agreement) or (ii) all or any part of the Trust Property is released at the direction of the Required Lenders (or all the Lenders if required by Section 12.12 of the Credit Agreement), and the proceeds of such sale or disposition or from such release (if any) are applied in accordance with the terms of the Credit Agreement to the extent required to be so applied or (y) on and after the CA Termination Date, any part of the Trust Property is sold or otherwise disposed of without violating the Existing Senior Notes Documents, the New Senior Notes Documents, the Refinancing Senior Notes Documents, the Secured Credit Card Agreements and the Secured Hedging Agreements, the Beneficiary, at the request and expense of the Trustor, will release such Trust Property from this Deed of Trust in the manner provided in clause (a) above (it being understood and agreed that upon the release of all or any portion of the Trust Property by the Beneficiary at the direction of the Lenders as provided above, the Lien on the Trust Property in favor of the Credit Card Issuers, the Hedging Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors shall automatically be released).

          (c) In addition to the foregoing, all Trust Property shall be automatically released (subject to reinstatement upon the occurrence of a new Trigger Event) in accordance with Section 7.10(i) of the Credit Agreement.

          (d) At any time that the Trustor desires that the Beneficiary take any action to give effect to any release of Trust Property pursuant to the foregoing Section 6.19(a), (b) or (c), it shall deliver to the Beneficiary a certificate signed by an authorized officer describing the Trust Property to be released and certifying its entitlement to a release pursuant to the applicable provisions of Sections 6.19(a), (b) or (c) and in such case the Beneficiary, at the request and expense of the Trustor, will execute such documents (without recourse and without any representation or warranty) as required to duly release such Trust Property. The Beneficiary shall have no liability whatsoever to any Secured Creditor as the result of any release of Trust Property by it as permitted by (or which the Beneficiary in good faith believes to be permitted by) this Section 6.19. Upon any release of Trust Property pursuant to Section 6.19(a), (b) or (c), so long as no Noticed Event of Default is then in existence, none of the Secured Creditors shall have any continuing right or interest in such Trust Property, or the proceeds thereof (subject to reinstatement rights upon the occurrence of a new Trigger Event in the case of a release pursuant to Section 6.19(c)(i)).

          6.20 Time of the Essence. Time is of the essence of this Deed of Trust.

          6.21 The Beneficiary’s Powers. Without affecting the liability of any other Person liable for the payment and performance of the Obligations and without affecting the Lien

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of this Deed of Trust in any way, the Beneficiary (acting at the direction of the requisite holders of the relevant Obligations affected thereby) may, from time to time, regardless of consideration and without notice to or consent by the holder of any subordinate Lien, right, title or interest in or to the Trust Property, (a) release any Persons liable for the Obligations, (b) extend the maturity of, increase or otherwise alter any of the terms of the Obligations, (c) modify the interest rate payable on the principal balance of the Obligations, (d) release or reconvey, or cause to be released or reconveyed, all or any portion of the Trust Property, or (e) take or release any other or additional security for the Obligations.

          6.22 Rules of Usage. The following rules of usage shall apply to this Deed of Trust unless otherwise required by the context:

           (a) Singular words shall connote the plural as well as the singular, and vice versa, as may be appropriate.

           (b) The words “herein”, “hereof” and “hereunder” and words of similar import appearing in each such document shall be construed to refer to such document as a whole and not to any particular section, paragraph or other subpart thereof unless expressly so stated.

           (c) References to any Person shall include such Person and its successors and permitted assigns.

           (d) Each of the parties hereto and their counsel have reviewed and revised, or requested revisions to, such documents, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construction and interpretation of such documents and any amendments or exhibits thereto.

           (e) Unless an express provision requires otherwise, each reference to “the Trust Property” shall be deemed a reference to “the Trust Property or any part thereof”, and each reference to “Secured Property” shall be deemed a reference to “the Secured Property or any part thereof”.

          6.23 No Off-Set. All sums payable by the Trustor shall be paid without counterclaim, other compulsory counterclaims, set-off, or deduction and without abatement, suspension, deferment, diminution or reduction, and the Obligations shall in no way be released, discharged or otherwise affected (except as expressly provided herein or in the Credit Agreement) by reason of: (i) any damage or any condemnation of the Trust Property or any part thereof; (ii) any title defect or encumbrance or any eviction from the Trust Property or any part thereof by title paramount or otherwise; or (iii) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to the Beneficiary or the Trustor, or any action taken with respect to this Deed of Trust by any agent or receiver of the Beneficiary. The Trustor waives, to the extent permitted by law, all rights now or hereafter conferred by statute or otherwise to any abatement, suspension, deferment, diminution or reduction of any of the Obligations.

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          6.24 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial. (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS DEED OF TRUST OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE TRUSTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE TRUSTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS PRENTICE-HALL CORPORATION SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 80 STATE STREET, ALBANY, NEW YORK 12207-2543 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE TRUSTOR SHALL DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN THE STATE OF NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THIS DEED OF TRUST. THE TRUSTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE TRUSTOR AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 6.03 HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE TRUSTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER THE CREDIT AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.

          (b) THE TRUSTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS DEED OF TRUST OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

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          (c) EACH OF THE PARTIES TO THIS DEED OF TRUST HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS DEED OF TRUST, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

          6.25 Statute Inapplicable. The provisions of N.C. Gen. Stat. Sec. 45-45.1 or any similar statute hereafter enacted in replacement or substitution thereof shall be inapplicable to this Deed of Trust.

          6.26 Future Advances. This Deed of Trust is given to secure the Trustor’s Applicable Obligations under, or in respect of, the Secured Debt Agreements to which the Trustor is “party” and shall secure not only Applicable Obligations with respect to presently existing indebtedness under the foregoing documents and agreements but also any and all other indebtedness now owing or which may hereafter be owing by the Trustor or the Borrower, as the case may be, to the Secured Creditors, however incurred, whether interest, discount or otherwise, and whether the same shall be deferred, accrued or capitalized, including future advances and re-advances, whether such advances are obligatory or to be made at the option of the Secured Creditors, or otherwise, to the same extent as if such future advances were made on the date of the execution of this Deed of Trust. The lien of this Deed of Trust shall be valid as to all indebtedness secured hereby, including future advances, from the time of its filing for record in the recorder’s office of the county in which the Property is located. This Deed of Trust is intended to and shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, excepting solely taxes and assessments levied on the real estate, to the extent of the maximum amount secured hereby, and Permitted Encumbrances. Although this Deed of Trust is given wholly or partly to secure all future obligations which may be incurred hereunder and under the other Secured Debt Agreements, whether obligatory or optional, the Trustor and the Beneficiary hereby acknowledge and agree that the Beneficiary and the other Secured Creditors are obligated by the terms of the Secured Debt Agreements to make certain future advances, including advances of a revolving nature, subject to the fulfillment of the relevant conditions set forth in the Secured Debt Agreements. The amount of present obligations secured is $5,200,000,000, and the maximum principal amount, including present and future obligations, which may be secured hereby at any one time is $7,050,000,000. The period within which such future obligations may be incurred commences on the date of this Deed of Trust and ends on the date fifteen (15) years from the date hereof.

          6.27 Fees. Any reference in this Deed of Trust to “reasonable attorney’s fees” or other similar phraseology shall mean the actual and reasonable fees incurred at customary and reasonable hourly rates in the Trust Property location, not pursuant to any statutory formula or percentage calculation.

ARTICLE VII
CONCERNING THE TRUSTEE

          7.01 Covenants of the Trustee. The Trustee, by its acceptance hereof, covenants faithfully to perform and fulfill the trusts herein created, and hereby waives any statutory fee and agrees not to require any compensation for any services rendered by it in accordance with the

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terms hereof. The Trustee may consult with counsel upon any matters arising hereunder and shall be fully protected in relying as to the legal matters or on the advice of counsel. The Trustee shall not incur any personal liability hereunder except for his gross negligence or willful misconduct, and the Trustee may rely on any instrument, document, or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine.

          7.02 Resignation; Removal of the Trustee. The Trustee may resign at any time without notice. In the event of the resignation or death or dissolution of the Trustee, or the Trustee’s failure, refusal or inability, for any reason, to make any sale or to perform any of the trusts herein declared, or, at the option of the Beneficiary, without cause, the Beneficiary may appoint a substitute trustee, who shall thereupon succeed to all the estates, titles, rights, powers, and trusts herein granted to any vested in the Trustee. The instrument of appointment may, but shall not be required to, be recorded in the recorder’s office(s) in which this Deed of Trust is recorded. If the Beneficiary is a corporation, such appointment may be made on behalf of such Beneficiary by any person who is then the president, or a vice-president, assistant vice-president, treasurer, cashier, secretary, or any other authorized officer or agent of the Beneficiary. In the event of the resignation or death of any substitute trustee, or such substitute trustee’s failure, refusal or inability to make any such sale or perform such trusts, or, at the option of the Beneficiary, without cause, successive substitute trustees may thereafter, from time to time, be appointed in the same manner.

          7.03 Amendment and Restatement. From and after the Fourth Restatement Effective Date, this Deed of Trust amends, restates and supersedes the Deed of Trust dated as of July 9, 2003, as amended as of July 30, 2004.

          7.04 Execution of Deed of Trust. The Trustee joins in the execution of this Deed of Trust only as evidence of its knowledge of the provisions hereof and its consent, to the extent necessary under applicable laws, to the provisions hereof.

ARTICLE VIII
DEFINITIONS

          “Existing Senior Notes” shall mean, collectively, (i) RJRTH’s 6.50% Notes due June 1, 2007 in an initial aggregate principal amount equal to $300,000,000, (ii) RJRTH’s 7.875% Notes due May 15, 2009 in an initial aggregate principal amount equal to $200,000,000, (iii) RJRTH’s 6.50% Notes due July 15, 2010 in an initial aggregate principal amount equal to $300,000,000, (iv) RJRTH’s 7.25% Notes due June 1, 2012 in an initial aggregate principal amount equal to $450,000,000, and (v) RJRTH’s 7.30% Notes due July 15, 2015 in an initial aggregate principal amount equal to $200,000,000, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “Existing Senior Notes Creditors” shall mean the Existing Senior Notes Trustee and the holders of the Existing Senior Notes.

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          “Existing Senior Notes Documents” shall mean the Existing Senior Notes and the Existing Senior Notes Indenture.

          “Existing Senior Notes Indenture” shall mean, collectively, (i) the indenture, dated as of May 20, 2002, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee and (ii) the indenture, dated as of May 15, 1999, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “Existing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the under the Existing Senior Notes Indenture.

          “Initial New Senior Notes” shall mean, collectively, (i) the Borrower’s 7.25% Senior Secured Notes due 2013 in an initial aggregate principal amount equal to $625,000,000, (ii) the Borrower’s 7.625% Senior Secured Notes due 2016 in an initial aggregate principal amount equal to $775,000,000 and (iii) the Borrower’s 7.75% Senior Secured Notes due 2018 in an initial aggregate principal amount equal to $250,000,000, in each case issued pursuant to the New Senior Notes Indenture, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes” shall mean (i) the Initial New Senior Notes, (ii) the Exchange Senior Notes and (iii) the Additional Senior Notes, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes Creditors” shall mean the New Senior Notes Trustee and the holders of the New Senior Notes.

          “New Senior Notes Documents” shall mean the New Senior Notes and the New Senior Notes Indenture.

          “New Senior Notes Indenture” shall mean the Indenture, dated as of May 31, 2006, among the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes Trustee” shall mean the trustee under the New Senior Notes Indenture.

          “Refinancing Senior Notes Creditors” shall mean the Refinancing Senior Notes Trustee and the holders of the Refinancing Senior Notes.

          “Refinancing Senior Notes Documents” shall mean, collectively, the Refinancing Senior Notes and the Refinancing Senior Notes Indenture.

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          “Refinancing Senior Notes Indenture” shall mean one or more indentures entered into from time to time providing for the issuance of Refinancing Senior Notes by the Borrower, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the term thereof and the Credit Agreement.

          “Refinancing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the Refinancing Senior Notes Indenture.

          “Secured Creditors” shall mean, collectively, the Lender Secured Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors.

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     IN WITNESS WHEREOF, the Trustor has caused this Deed of Trust to be duly executed and delivered under seal as of the day and year first above written.

Amended and Restated Deed of Trust — ______ County, NC

	Trustor: R. J. REYNOLDS TOBACCO COMPANY, a North Carolina corporation (formerly a New Jersey corporation)
[SEAL]	By:
		Name:
		Title:

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

Amended and Restated Deed of Trust — ______ County, NC

	Trustee: THE FIDELITY COMPANY
	By:
		Name:
[SEAL]		Title:

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

Amended and Restated Deed of Trust — ______ County, NC

	Beneficiary: JPMORGAN CHASE BANK, N.A.
	By:
		Name:
[SEAL]		Title:

Amended and Restated Deed of Trust — ______ County, NC

STATE OF	)
		ss.:
COUNTY OF	)

     I,                                         , certify that                                           personally came before me this day and acknowledged that he/she is the                                          of R.J. Reynolds Tobacco Company, a North Carolina corporation, and that by authority duly given and as the act of the corporation, he/she executed the foregoing instrument as                                          of the corporation, for and on behalf of the corporation.

     WITNESS my hand and notarial seal, this ___day of May, 2006.

Notary Public

My Commission Expires:                                        

Amended and Restated Deed of Trust — ______ County, NC

STATE OF	)
		ss.:
COUNTY OF	)

     I,                                         , certify that                                           personally came before me this day and acknowledged that he/she is the                                          of The Fidelity Company, a North Carolina corporation, and that by authority duly given and as the act of the corporation, he/she executed the foregoing instrument as                                          of the corporation, for and on behalf of the corporation.

     WITNESS my hand and notarial seal, this ___day of May, 2006.

Notary Public

My Commission Expires:                                        

Amended and Restated Deed of Trust — ______ County, NC

STATE OF NEW YORK	)
		ss.:
COUNTY OF NEW YORK	)

     I, RUBY TULLOCH, certify that ANTHONY W. WHITE personally came before me this day and acknowledged that he is the Vice President of JPMorgan Chase Bank, N.A., and that by authority duly given and as the act of said JPMorgan Chase Bank, N.A., he executed the foregoing instrument as Vice President of said national banking association, for and on behalf of said national banking association.

     WITNESS my hand and notarial seal, this 31st day of May, 2006.

Notary Public

     My Commission Expires:                                        

Amended and Restated Deed of Trust — ______ County, NC

EXHIBIT A

DESCRIPTION OF LAND

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45

EX-10.6

EXHIBIT 10.6

This Deed to Secure Debt was prepared by,	This document is
	intended
and when recorded should be returned to:	to be recorded in
	Bibb County, GEORGIA

Leila Rachlin, Esq.
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
(212) 819-8720
1107993-0127

FIRST AMENDED AND RESTATED DEED TO SECURE DEBT, SECURITY AGREEMENT
AND

ASSIGNMENT OF LEASES, RENTS AND PROFITS

made by

R. J. REYNOLDS TOBACCO COMPANY,

as the Grantor,

to

JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent for the Secured Creditors,
as the Grantee

NOTE TO CLERK: NO INTANGIBLE RECORDING TAX IS DUE. THIS FIRST AMENDED AND RESTATED DEED TO SECURE DEBT, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES, RENTS AND PROFITS SECURES A GUARANTY.

Amended and Restated Deed to Secure Debt — Bibb County, GA

FIRST AMENDED AND RESTATED DEED TO SECURE DEBT, SECURITY AGREEMENT
AND,
ASSIGNMENT OF LEASES, RENTS AND PROFITS

          THIS FIRST AMENDED AND RESTATED DEED TO SECURE DEBT, SECURITY AGREEMENT AND, ASSIGNMENT OF LEASES, RENTS AND PROFITS, dated as of July 30, 2004, and as amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, restated, supplemented and/or otherwise modified from time to time, this “Deed To Secure Debt”) made by R. J. Reynolds Tobacco Company, a North Carolina Corporation (and formerly a New Jersey corporation) (the “Grantor”), having an address at 401 North Main Street, Winston-Salem, North Carolina 27102 as the Grantor, JPMorgan Chase Bank, N.A. (together with any successor grantee, the “Grantee”), having an address at 270 Park Avenue, New York, NY 10017, as Administrative Agent and Collateral Agent, for the benefit of the Secured Creditors (as defined below).

          All capitalized terms used but not otherwise defined herein shall have the same meanings ascribed to such terms in the Credit Agreement described below.

W I T N E S S E T H :

          WHEREAS, Reynolds American Inc. (the “Borrower”), the various lending institutions from time to time party thereto (the “Lenders”), the Grantee, as Administrative Agent (the “Administrative Agent”), Lehman Commercial Paper Inc. and Citicorp USA, Inc., as Syndication Agents (the “Syndication Agents”), General Electric Capital Corporation and Mizuho Corporate Bank, Ltd., as Documentation Agents (the “Documentation Agents”), Lehman Brothers Inc., J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and General Electric Capital Corporation, as Joint Lead Arrangers and Lehman Brothers Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as Joint Bookrunners (the “Joint Bookrunners”) have entered into a Credit Agreement, dated as of May 7, 1999, as amended and restated as of November 17, 2000, as further amended and restated as of May 10, 2002, as further amended and restated as of July 30, 2004 and as further amended and restated as of the date hereof, providing for the making of Loans to the Borrower and the issuance of, and participation in, Letters of Credit for the account of the Borrower, in the aggregate principal amount of up to $2,350,000,000, as more particularly described in Schedule 1 attached hereto and made a part hereof, all as contemplated therein (with (i) the Lenders, the Swingline Lender, each Letter of Credit Issuer, the Administrative Agent, the Syndication Agents, the Documentation Agents, the other Agents and the Collateral Agent being herein collectively called the “Lender Creditors” and (ii) the term “Credit Agreement” as used herein to mean the Credit Agreement described above in this paragraph, as the same may be further amended, modified, extended, renewed, replaced, restated, supplemented and/or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of

Amended and Restated Deed to Secure Debt — Bibb County, GA

indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (x) either (A) all obligations under the Credit Agreement being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (y) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by the Borrower to the Collateral Agent);

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and/or may in the future from time to time enter into, one or more agreements or arrangements with JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under the Credit Agreement for any reason (JPMCB and any such affiliate and their respective successors and assigns, each, a “Credit Card Issuer”)) providing for credit card loans to be made available to certain employees of the Borrower and/or one or more of its Subsidiaries (each such agreement or arrangement with a Credit Card Issuer, a “Secured Credit Card Agreement”);

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and or may in the future from time to time enter into or guarantee one or more (i) interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements), (ii) foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency values and/or (iii) other types of hedging agreements from time to time (each such agreement or arrangement with a Hedging Creditor (as hereinafter defined), together with the Existing Interest Rate Swap Agreement, a “Secured Hedging Agreement”), with any Lender, any affiliate thereof or a syndicate of financial institutions organized by a Lender or an affiliate of a Lender (even if any such Lender ceases to be a Lender under the Credit Agreement for any reason) (any such Lender, affiliate or other such financial institution that participates therein, together with Calyon (as counterparty to the Existing Interest Rate Swap Agreement), and in each case their subsequent successors and assigns, collectively, the “Hedging Creditors”, and together with the Lender Creditors and each Credit Card Issuer, the “Lender Secured Creditors”);

          WHEREAS, R.J. Reynolds Tobacco Holdings, Inc., a Wholly-Owned Subsidiary of the Borrower (“RJRTH”) and the Existing Senior Notes Trustee, on behalf of the holders of the Existing Senior Notes, have entered into the Existing Senior Notes Indenture, providing for the issuance of Existing Senior Notes by RJRTH, with the aggregate principal amount of the Existing Senior Notes outstanding on the date hereof equaling $1,450,000,000;

          WHEREAS, the Borrower and the New Senior Notes Trustee, on behalf of the holders of the New Senior Notes, have entered into the New Senior Notes Indenture, providing for the issuance of New Senior Notes by the Borrower, with the aggregate principal amount of the New Senior Notes outstanding on the date hereof equaling $1,650,000,000;

          WHEREAS, the Borrower and the Refinancing Senior Notes Trustee, on behalf of the holders of the Refinancing Senior Notes, may from time to time enter into the Refinancing

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3

Senior Notes Indenture, providing for the issuance of Refinancing Senior Notes by the Borrower, providing for the issuance from time to time of Refinancing Senior Notes by the Borrower, with the aggregate principal amount of the Refinancing Senior Notes outstanding on the date hereof equaling $0;

          WHEREAS, the Grantor is owner of the fee simple title to the Property (as hereinafter defined), subject to Permitted Liens;

          WHEREAS, pursuant to the Subsidiary Guaranty, the Grantor has (together with the other Subsidiaries of the Borrower party thereto) jointly and severally guaranteed to the Lender Secured Creditors the payment when due of the Guaranteed Obligations (as and to the extent defined in the Subsidiary Guaranty);

          WHEREAS, the Grantor has guaranteed to the Existing Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the Existing Senior Notes;

          WHEREAS, the Grantor has guaranteed to the New Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the New Senior Notes;

          WHEREAS, the Grantor may from time to time guarantee to the Refinancing Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the Refinancing Senior Notes;

          WHEREAS, pursuant to the Credit Agreement, the Grantor executed and delivered that certain Deed To Secure Debt, Security Agreement and Assignment of Leases, Rents and Profits, dated as of July 30, 2004, for the benefit of JPMorgan Chase Bank as Grantee, as Collateral Agent for the Secured Creditors as described therein (the “Original Deed To Secure Debt”), which was recorded in the Records of the Clerk’s Office of Bibb County Superior Court, Georgia (the “Records”) on August 3, 2004, in Deed Book 6295 at Page 43.

          WHEREAS, the Credit Agreement requires this Deed To Secure Debt be executed and delivered to the Grantee by the Grantor and the Secured Hedging Agreements, the Secured Credit Card Agreements, the Existing Senior Notes Indenture and the New Senior Notes Indenture, require that this Deed To Secure Debt secure the respective Obligations as provided herein; and

          WHEREAS, the Grantor desires to further amend and restate the Original Deed To Secure Debt to satisfy the condition in the preceding paragraph and to secure (and this Deed To Secure Debt shall secure) the following:

     (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Grantor, now existing or hereafter incurred under, arising out of or in connection with any Credit Document to which the Grantor is a party (including, without limitation, indemnities, fees and interest (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit

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Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)) and the due performance of and compliance by the Grantor with the terms of each such Credit Document (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or liabilities with respect to Secured Hedging Agreements, being herein collectively called the “Credit Document Obligations”);

     (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Grantor, now existing or hereafter incurred under, arising out of or in connection with each Secured Credit Card Agreement (including, all obligations, if any, of the Grantor under the Subsidiary Guaranty in respect of any Secured Credit Card Agreement), and all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding (all such obligations and liabilities under this clause (ii) being herein collectively called the “Credit Card Obligations”);

     (iii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Grantor, now existing or hereafter incurred under, arising out of or in connection with each Secured Hedging Agreement (including, all obligations, if any, of the Grantor under the Subsidiary Guaranty in respect of any Secured Hedging Agreement), and all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding (all such obligations and liabilities under this clause (iii) being herein collectively called the “Hedging Obligations”);

     (iv) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Grantor, now existing or hereinafter incurred under, arising out of or in connection with each Existing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Grantor with the terms of each such Existing Senior Notes Document (all such obligations and liabilities under this clause (iv) being herein collectively called the “Existing Senior Notes Obligations”);

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     (v) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Grantor, now existing or hereinafter incurred under, arising out of or in connection with each New Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Grantor with the terms of each such New Senior Notes Document (all such obligations and liabilities under this clause (v) being herein collectively called the “New Senior Notes Obligations”);

     (vi) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Grantor now existing or hereinafter incurred under, arising out of or in connection with each Refinancing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Grantor with the terms of each such Refinancing Senior Notes Document (all such obligations and liabilities under this clause (vi) being herein collectively called the “Refinancing Senior Notes Obligations” and together with the New Senior Notes Obligations, the “RAI Senior Notes Obligations”);

     (vii) any and all sums advanced by the Grantee in order to preserve the Property or preserve its lien and security interest in the Property;

     (viii) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of the Grantor and/or the Borrower referred to above after an Event of Default (as hereinafter defined) shall have occurred and be continuing, all expenses of re-taking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Property, or of any exercise by the Grantee of its rights hereunder, together with reasonable attorneys’ fees and disbursements (as set forth in Section 4.09 hereof) and court costs;

     (ix) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 4.10 hereof;

     (x) any and all other indebtedness now owing or which may hereafter be owing by the Grantor to the Grantee, however and whenever incurred or evidenced, whether express or implied, direct or indirect, absolute or contingent, or due or to become due; and

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     (xi) any and all renewals, extensions and modifications of any of the obligations and liabilities referred to in clauses (i) through (x) above;

all such obligations, liabilities, sums and expenses set forth in clauses (i) through (xi) above being herein collectively called the “Obligations”, provided that notwithstanding the foregoing, (i) the Existing Senior Notes Obligations shall be excluded from the Obligations, to the extent the Existing Senior Notes Documents do not require the Existing Senior Notes Obligations to be secured pursuant to this Deed To Secure Debt, (ii) the New Senior Notes Obligations shall be excluded from the Obligations, to the extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured pursuant to this Deed To Secure Debt and (iii) the Refinancing Senior Notes Obligations shall be excluded from the Obligations, to the extent the Refinancing Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured pursuant to this Deed To Secure Debt.

          NOW, THEREFORE, as security for its Applicable Obligations (as defined below) and in consideration of the sum of ten dollars ($10.00) and the other benefits accruing to the Grantor, the receipt and sufficiency of which are hereby acknowledged, THE GRANTOR HEREBY MORTGAGES, GIVES, GRANTS, BARGAINS, SELLS, ASSIGNS, TRANSFERS, CONVEYS AND CONFIRMS TO THE GRANTEE AND ITS SUCCESSORS AND ASSIGNS FOREVER FOR THE BENEFIT OF THE SECURED CREDITORS, TOGETHER WITH POWER OF SALE (subject to applicable law) all of the Grantor’s estate, right, title and interest, whether now owned or hereafter acquired, whether as lessor or lessee and whether vested or contingent, in and to all of the following:

          A. The land described in Exhibit A hereto, together with all rights, privileges, franchises and powers related thereto which are appurtenant to said land or its ownership, including all minerals, oil and gas and other hydrocarbon substances thereon or therein; waters, water courses, water stock, water rights (whether riparian, appropriative, or otherwise, and whether or not appurtenant), sewer rights, shrubs, crops, trees, timber and other emblements now or hereafter on, under or above the same or any part or parcel thereof (the “Land”);

          B. All buildings, structures, tenant improvements and other improvements of every kind and description now or hereafter located in or on the Land, including, but not limited to all machine shops, structures, improvements, rail spurs, dams, reservoirs, water, sanitary and storm sewers, drainage, electricity, steam, gas, telephone and other utility facilities, parking areas, roads, driveways, walks and other site improvements of every kind and description now or hereafter erected or placed on the Land; and all additions and betterments thereto and all renewals, alterations, substitutions and replacements thereof (collectively, the “Improvements”);

          C. All fixtures, attachments, appliances, equipment, machinery, building materials and supplies, and other tangible personal property, now or hereafter attached to said Improvements or now or at any time hereafter located on the Land and/or Improvements including, but not limited to, artwork, decorations, draperies, furnaces, boilers, oil burners, piping, plumbing, refrigeration, air conditioning, lighting, ventilation, disposal and sprinkler systems, elevators, motors, dynamos and all other equipment and machinery, appliances, fittings and fixtures of every kind located in or used in the operation of the Improvements, together with any and all replacements or substitutions thereof and additions thereto, including the proceeds of any

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sale or transfer of the foregoing (hereinafter sometimes collectively referred to as the “Equipment”);

          D. All surface rights, appurtenant rights and easements, rights of way, and other rights appurtenant to the use and enjoyment of or used in connection with the Land and/or the Improvements;

          E. All streets, roads and public places (whether open or proposed) now or hereafter adjoining or otherwise providing access to the Land, the land lying in the bed of such streets, roads and public places, and all other sidewalks, alleys, ways, passages, vaults, water courses, strips and gores of land now or hereafter adjoining or used or intended to be used in connection with all or any part of the Land and/or the Improvements;

          F. Any leases, lease guaranties and any other agreements, relating to the use and occupancy of the Land and/or the Improvements or any portion thereof, including but not limited to any use or occupancy arrangements created pursuant to Section 365(h) of he Bankruptcy Code or otherwise in connection with the commencement or continuance of any bankruptcy, reorganization, arrangement, insolvency, dissolution, receivership or similar proceedings, or any assignment for the benefit of creditors, in respect of any tenant or occupant of any portion of the Land and/or the Improvements (collectively, “Leases”);

          G. All revenues, rents, receipts, income, accounts receivable, issues and profits of the Property (collectively, “Rents”);

          H. To the extent assignable, all permits, licenses and rights relating to the use, occupation and operation of the Land and the Improvements, any business conducted thereon or therein and any part thereof;

          I. All real estate tax refunds payable to the Grantor with respect to the Land and/or the Improvements, and refunds, credits or reimbursements payable with respect to bonds, escrow accounts or other sums payable in connection with the use, development, or ownership of the Land or Improvements;

          J. Any claims or demands with respect to any proceeds of insurance in effect with respect to the Land and/or the Improvements, including interest thereon, which the Grantor now has or may hereafter acquire and any and all awards made for the taking by eminent domain, condemnation or by any proceedings, transfer or purchase in lieu or in anticipation of the exercise of said rights, or for a change of grade, or for any other injury to or decrease in the value of the whole or any part of the Property;

          K. Any zoning lot agreements and air rights and development rights which may be vested in the Grantor together with any additional air rights or development rights which have been or may hereafter be conveyed to or become vested in the Grantor; and

          L. All proceeds and products of the conversion, voluntary or involuntary, including, without limitation, those from sale, exchange, transfer, collection, loss, damage,

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disposition, substitution or replacement of any of the foregoing; whether into cash, liquidated claims or otherwise.

          SAVE AND EXCEPT, HOWEVER, for so long as those certain Macon-Bibb Industrial Authority Taxable Industrial Development Revenue Bonds (Brown & Williamson Tobacco Corporation Project), series 1993A in the aggregate principal amount of $25,000,000, dated as of March 1, 1993 remain outstanding, the rights of Grantor under and pursuant to that certain Lease Agreement between Macon-Bibb Industrial Authority and Brown & Williamson Tobacco Corporation (predecessor in interest to the Grantor), dated as of March 1, 1993 (Series 1993A), recorded in the Clerk’s Office, Superior Court of Bibb County, Georgia on May 27, 1993 in Book 2310 at Page 1.

All of the foregoing estates, right, properties and interests hereby conveyed to the Grantee may be referred to herein as the “Property”. Notwithstanding the foregoing, (x) the Property that secures the Existing Senior Notes Obligations shall be limited to Property consisting of any Principal Property (as defined in the Existing Senior Notes Indenture (in each case as in effect on the date hereof)) of the Grantor (the “Designated Existing Senior Notes Trust Property”), all of which Property shall also ratably secure all other Applicable Obligations of the Grantor, and the Trust Property Proceeds (as defined in Section 4.04(a)) that are to be applied to the Existing Senior Notes Obligations shall be limited to Trust Property Proceeds resulting from the sale of, and Rents and other amounts generated by the holding, leasing, management, operation or other use pursuant to this Deed To Secure Debt of, the Designated Existing Senior Notes Trust Property, with such Trust Property Proceeds to also be applied ratably to all other Applicable Obligations of the Grantor and (y) the Property that secures the RAI Senior Notes Obligations shall be limited to Property consisting of any Principal Property (as defined in the New Senior Notes Indenture (as in effect on the date hereof) or the Refinancing Senior Notes Indenture) of the Grantor (the “Designated RAI Senior Notes Trust Property”, and together with the Designated Existing Senior Notes Trust Property, the “Limited Trust Property”), all of which Property shall also ratably secure all other Applicable Obligations of the Grantor, and the Trust Property Proceeds (as defined in Section 4.04(a)) that are to be applied to the RAI Senior Notes Obligations shall be limited to Trust Property Proceeds resulting from the sale of, and Rents and other amounts generated by the holding, leasing, management, operation or other use pursuant to this Deed To Secure Debt of, the Designated RAI Senior Notes Trust Property, with such Trust Property Proceeds to also be applied ratably to all other Applicable Obligations of the Grantor.

“Applicable Obligations” shall mean all of the Obligations; provided that (x) the Existing Senior Notes Obligations shall be excluded from the Applicable Obligations of the Grantor to the extent the Existing Senior Notes Documents do not require the Existing Senior Notes Obligations to be secured pursuant to this Deed To Secure Debt, (y) the New Senior Notes Obligations shall be excluded from the Applicable Obligations of the Grantor to the extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured pursuant to this Deed To Secure Debt, and (z) the Refinancing Senior Notes Obligations shall be excluded from the Applicable Obligations of the Grantor to the extent the Refinancing Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured pursuant to this Agreement.

          TO HAVE AND TO HOLD the above granted and described Property unto the Grantee and to its successors and assigns forever, in fee simple and the Grantor hereby covenants

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and agrees on behalf of itself and its successors and assigns to warrant and defend the Property unto the Grantee, its successors and assigns against the claim or claims of all persons and parties whatsoever.

          PROVIDED, HOWEVER, that if Obligations shall have been paid in cash at the time and in the manner stipulated in the Secured Debt Agreements and all other sums payable hereunder and all other indebtedness secured hereby shall have been paid and all other covenants contained in the Secured Debt Agreements (as defined below) shall have been performed, then, in such case the Grantee shall, subject to the provisions of Section 6.19 of this Deed To Secure Debt, at the request and expense of the Grantor, satisfy this Deed To Secure Debt (without recourse and without any representation or warranty) and the estate, right, title and interest of the Grantee in the Property shall cease, and upon payment to the Grantee of all reasonable costs and expenses incurred for the preparation of the release hereinafter referenced and all recording costs if allowed by law, the Grantee shall cancel and surrender the estate and interest created by this Deed To Secure Debt.

ARTICLE I

REPRESENTATIONS, WARRANTIES, COVENANTS

          1.01 Title to this Property. The Grantor represents and warrants: (a) it has good and marketable fee title to the Property, free and clear of any liens and encumbrances, other than Liens permitted under Section 8.03 of the Credit Agreement (or, after the CA Termination Date (as defined below), the Credit Agreement as in effect immediately prior to the occurrence of the CA Termination Date) and any other easements, rights and claims of record (collectively “Permitted Liens”), and is lawfully seized and possessed of the Property; (b) this Deed To Secure Debt is a valid first priority security interest and security title upon the Property subject to the Permitted Liens; (c) it has full power and authority to encumber the Property in the manner set forth herein; and (d) there are no defenses or offsets to this Deed To Secure Debt or to the Obligations which it secures. The Grantor shall preserve such title and the validity and priority of this Deed To Secure Debt and shall forever warrant and defend the same to the Grantee and the Grantee’s successors and assigns against the claims of all persons and parties whatsoever. The Grantor shall take no action nor shall it fail to take any action which could result in an impairment of the security interest of this Deed To Secure Debt or which could form the basis for any Person(s) to claim an interest in the Property (including, without limitation, any claim for adverse use or possession or any implied dedication or easement by prescription other than leases permitted under the Credit Agreement). If any Lien (other than Permitted Liens) is asserted against the Property, the Grantor shall promptly, at its expense: (a) provide the Grantee with written notice of such Lien, including information relating to the amount of the Lien asserted; and (b) pay the Lien in full or take such other action to cause the Lien to be released, or, so long as the security interest of this Deed To Secure Debt is not compromised, contest the same pursuant to the provisions of the Credit Agreement. From and after the occurrence of an Event of Default, the Grantee may, but shall not be obligated, to pay any such asserted Lien if not timely paid by the Grantor.

          1.02 Compliance with Law. The Grantor represents and warrants that it possesses all material certificates, licenses, authorizations, registrations, permits and/or approvals

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necessary for the ownership, operation, leasing and management of the Property, including, without limitation, all material environmental permits, all of which are in full force and effect and not the subject of any revocation proceeding, undisclosed amendment, release, suspension, forfeiture or the like. The present and contemplated use and occupancy of the Property does not conflict with or violate any such certificate, license, authorization, registration, permit or approval, including, without limitation, any certificate of occupancy which may have been issued for the Property. The Grantor will not take any action, or fail to take any required action, so as to compromise or adversely affect the zoning classification of the Property.

          1.03 Payment and Performance of Obligations. Subject to the terms of the Secured Debt Agreements, the Grantor shall pay all of the Obligations when due and payable without offset or counterclaim, and shall observe and comply in all material respects with all of the terms, provisions, conditions, covenants and agreements to be observed and performed by it under this Deed To Secure Debt, the other Credit Documents to which it is a party, the Secured Credit Card Agreements, the Secured Hedging Agreements, the Existing Senior Notes Documents, the New Senior Notes Documents and the Refinancing Senior Notes Documents (collectively, the “Secured Debt Agreements”).

          1.04 Maintenance, Repair, Alterations, Etc. The Grantor will: (i) keep and maintain the Property, to the extent used in Grantor’s day to day business, in good condition and repair (normal wear and tear excepted); (ii) make or cause to be made, as and when necessary, all material repairs, renewals and replacements, structural and nonstructural, exterior and interior, ordinary and extraordinary, foreseen and unforeseen which are necessary to so maintain the Property in Grantor’s reasonable business judgment; (iii) restore any Improvement, to the extent used in Grantor’s day to day business, which may be damaged or destroyed so that the same shall be at least substantially equal to its value, condition and character immediately prior to the damage or destruction; (iv) not commit or permit any waste or deterioration (normal wear and tear excepted) of the Property, to the extent used in Grantor’s day to day business; (v) not permit any material Improvements, to the extent used in Grantor’s day to day business, to be demolished or substantially altered in any manner that substantially decreases the value thereof; (vi) promptly pay when due all claims for labor performed and materials furnished therefor or contest such claim and; (vii) comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental authorities having jurisdiction over the Property, as well as comply with the provisions of any lease, easement or other agreement affecting all or any part of the Property.

          1.05 Required Insurance; Use of Proceeds. The Grantor will, at its expense, at all times provide, maintain and keep in force policies of property, hazard and liability insurance in accordance with Section 7.03 of the Credit Agreement with respect to the Property, together with statutory workers’ compensation insurance with respect to any work to be performed on or about the Property. To the extent required under the Credit Agreement, the Grantor shall give prompt written notice to the Grantee of the occurrence of any material damage to or material destruction of the Improvements or the Equipment. In the event of any damage to or destruction of the Property or any part thereof, so long as a Noticed Event of Default (as defined in Section 3.03(a) hereof) has not occurred and is not continuing the Grantee will release any interest they have in the proceeds of any insurance to the Grantor on account of such damage or destruction and Grantor may use such proceeds for repair restoration replacement or other business purposes

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as Grantor may reasonably determine. In the event of foreclosure of the security interest of this Deed To Secure Debt or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Obligations, all right, title and interest of the Grantor in and to all proceeds then payable under any policy of insurance required by this Deed To Secure Debt shall inure to the benefit of and pass to the successor in interest of the Grantor, or the purchaser or mortgagor of the Property. After the occurrence of an Event of Default, the Grantee shall be afforded the right to participate in and approve the settlement of any claim made by the Grantor against the insurance company.

          1.06 Preservation of Property. The Grantor agrees to pay for any and all reasonable and actual fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Grantee’s security interest in the Property, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices (including stamp and mortgage or intangible recording taxes or other taxes imposed on the Grantee by virtue of its ownership of this Deed To Secure Debt), which are imposed upon the recording of this Deed To Secure Debt or thereafter, all reasonable attorneys’ fees, payment or discharge of any taxes or Liens upon or in respect of the Property, premiums for insurance with respect to the Property and all other reasonable fees, costs and expenses in connection with protecting, maintaining or preserving the Property and the Grantee’s interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Property.

          1.07 Condemnation. Should the Grantor receive any notice that a material portion of the Property or interest therein may be taken or damaged by reason of any public improvements or condemnation proceeding or in any other similar manner (a “Condemnation”), the Grantor, to the extent required under the Credit Agreement, shall give prompt written notice thereof to the Grantee. In the event of any Condemnation, after the occurrence and during the continuation of any Event of Default, the Grantee shall have the right to participate in any negotiations or litigation and shall have the right to approve any settlement. So long as no Noticed Event of Default has occurred and is continuing, the Grantee will release any interest they have in any and all compensation, awards, damages and proceeds paid to the Grantor or the Borrower on account of such Condemnation and Grantor may use such compensation awards, damages and proceeds for repair, restoration, replacement or other business purposes as Grantor may reasonably determine.

          1.08 Inspections. The Grantor hereby authorizes the Grantee, its agents, employees and representatives, upon reasonable prior written notice to the Grantor (except in an emergency or following the occurrence and during the continuance of any Event of Default, in which case notice shall not be required) to visit and inspect the Property or any portion(s) thereof, all at such reasonable times and as often as the Grantee may reasonably request.

          1.09 Transfers. Except as otherwise permitted in accordance with the terms of the Credit Agreement, no part of the Property or of any legal or beneficial interest in the Property shall be sold, assigned, conveyed, transferred or otherwise disposed of (whether voluntarily or involuntarily, directly or indirectly, by sale of stock or any interest in the Grantor, or by operation of law or otherwise).

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          1.10 After Acquired Property Interests. Subject to applicable law, all right, title and interest of the Grantor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to, the Property, hereafter acquired by, or released to, the Grantor or constructed, assembled or placed by the Grantor on the Land, and all conversions of the security constituted thereby (collectively, “After Acquired Property Interests”), immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, conveyance, assignment or other act by the Grantor, shall become subject to the lien of this Deed To Secure Debt as fully and completely, and with the same effect, as though now owned by the Grantor and specifically described in the granting clauses hereof. The Grantor shall execute and deliver to the Grantee all such other assurances, mortgages, conveyances or assignments thereof as the Grantee may reasonably require for the purpose of expressly and specifically subjecting such After Acquired Property Interests to the lien of this Deed To Secure Debt. The Grantor hereby irrevocably authorizes and appoints the Grantee as the agent and attorney-in-fact of the Grantor to execute all such documents and instruments on behalf of the Grantor, which appointment shall be irrevocable and coupled with an interest, if the Grantor fails or refuses to do so within ten (10) days after a request therefor by the Grantee.

ARTICLE II

SECURITY AGREEMENT

          2.01 Grant of Security; Incorporation by Reference. This Deed To Secure Debt shall, in addition to constituting a security interest on those portions of the Property classified as real property (including fixtures to the extent they are real property), constitute a security agreement within the meaning of the Uniform Commercial Code or within the meaning of the common law with respect to those parts of the Property classified as personal property (including fixtures to the extent they are personal property) to the extent a security interest therein can be created by this Deed To Secure Debt. The Grantor hereby grants to the Grantee a security interest in and to the following property whether now owned or hereafter acquired (collectively, the “Secured Property”) for the benefit of the Grantee to further secure the payment and performance of its Applicable Obligations:

     (a) Those parts of the Property classified as personal property (including (i) fixtures to the extent they are personal property and (ii) personal property and fixtures that are leased, but only to the extent the Grantor can grant to the Grantee a security interest therein without breaching the terms of such lease);

     (b) All general intangibles, contract rights, accounts and proceeds arising from all insurance policies required to be maintained by the Grantor and related to the Property hereunder;

     (c) All proceeds of any judgment, award or settlement in any condemnation or eminent domain proceeding in connection with the Property, together with all general intangibles, contract rights and accounts arising therefrom;

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     (d) All permits, consents and other governmental approvals in connection with the construction of the Improvements or the operation of the Property, to the extent any of the same may be assigned, transferred, pledged or subjected to a security interest;

     (e) All plans and specifications, studies, tests or design materials relating to the design, construction, repair, alteration or leasing of the Property, to the extent any of the same may be assigned, transferred, pledged or subjected to a security interest; and

     (f) All cash and non-cash proceeds of the above-mentioned items.

; provided that notwithstanding the foregoing, Secured Property securing Existing Senior Notes Obligations and RAI Senior Notes Obligations shall be limited to Limited Trust Property, as the case may be.

          The provisions contained in the Security Agreement are hereby incorporated by reference into this Deed To Secure Debt with the same effect as if set forth in full herein. In the event of a conflict between the provisions of this Article II and the Security Agreement, the Security Agreement shall control and govern and the Grantor shall comply therewith.

ARTICLE III

ASSIGNMENT OF LEASES, RENTS AND PROFITS

          3.01 Assignment. The Grantor hereby absolutely, irrevocably and unconditionally sells, assigns, transfers and conveys to the Grantee all of the Grantor’s right, title and interest in and to all current and future Leases and Rents, including those now due, past due, or to become due by virtue of any Lease or other agreement for the occupancy or use of all or any part of the Property regardless of to whom the Rents are payable. The Grantor intends that this assignment of Leases and Rents constitutes a present and absolute assignment and not an assignment for additional security only. Such assignment to the Grantee shall not be construed to bind the Grantee to the performance of any of the covenants, conditions or provisions contained in any such Lease or otherwise impose any obligation upon the Grantee. The Grantor covenants that the Grantor will not hereafter collect or accept payment of any Rents more than one month prior to the due dates of such Rents, and that no payment of any of the Rents to accrue for any portion of the Property (other than a de minimis amount) will be waived, released, reduced, discounted or otherwise discharged or compromised by the Grantor, except as may be approved in writing by the Grantee. The Grantor agrees that it will not assign any of the Leases or Rents to any other Person. The Grantee shall have no liability for any loss which may arise from a failure or inability to collect Rents, proceeds or other payments. The Grantor shall maintain all security deposits in accordance with applicable law.

          3.02 Revocable License; Agent. Notwithstanding the foregoing, subject to the terms of this Article III, the Grantee grants to the Grantor a revocable license to operate and manage the Property and to collect the Rents and hereby directs each tenant under a Lease to pay such Rents to, or at the direction of, the Grantor, until such time as the Grantee provides notice to the contrary to such tenants. The Grantor shall hold the Rents, or a portion thereof sufficient to

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discharge all current sums due in respect of the Obligations, in trust for the benefit of the Grantee for use in the payment of such sums.

          3.03 Rents. (a) Upon the occurrence and during the continuance of a Noticed Event of Default, without the need for notice or demand, the license granted pursuant to this Article III shall immediately and automatically be revoked and the Grantee shall immediately be entitled to possession of all Rents, whether or not the Grantee enters upon or takes control of the Property. Upon the revocation of such license, the Grantor grants to the Grantee the right, at its option, to exercise all the rights granted in Section 4.02(a). Nothing herein contained shall be construed as constituting the Grantee a lender in possession in the absence of the taking of actual possession of the Property by the Grantee pursuant to Section 4.02(a). As used herein, a “Noticed Event of Default” shall mean (i) an Event of Default with respect to the Borrower under Section 9.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Grantee has given the Borrower notice that such Event of Default constitutes a “Noticed Event of Default”.

          (b) From and after the termination of such license, the Grantor may, at the Grantee’s direction, be the agent for the Grantee in collection of the Rents and all of the Rents so collected by the Grantor shall be held in trust by the Grantor for the sole and exclusive benefit of the Grantee and the Grantor shall, within one (1) business day after receipt of any Rents, pay the same to the Grantee to be applied by the Grantee as provided for herein. All Rents collected shall be applied against all expenses of collection, including, without limitation, attorneys’ fees, against costs of operation and management of the Property and against the Obligations, in whatever order or priority as to any of the items so mentioned as the Grantee directs in its sole and absolute discretion and without regard to the adequacy of its security. Neither the demand for or collection of Rents by the Grantee shall constitute any assumption by the Grantee of any obligations under any Lease or agreement relating thereto.

          (c) Any reasonable funds expended by the Grantee to take control of and manage the Property and collect the Rents shall become part of the Obligations secured hereby. Such amounts shall be payable from the Grantor to the Grantee upon the Grantee’s demand therefor and shall bear interest from the date of disbursement at the interest rate set forth in Section 1.08(c) of the Credit Agreement unless payment of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from the Grantor under applicable law.

          3.04 Sale of Property. (a) Upon any sale of any portion of the Property by or for the benefit of the Grantee pursuant to this Deed To Secure Debt, the Rents attributable to the part of the Property so sold shall be included in such sale and shall pass to the purchaser free and clear of any rights granted herein to the Grantor.

          (b) The Grantor acknowledges and agrees that, upon recordation of this Deed To Secure Debt, the Grantee’s interest in the Rents shall be deemed to be fully perfected, “choate” and enforceable against the Grantor and all third parties, including, without limitation, any debtor in possession or trustee in any case under title 11 of the United States Code, without the necessity of (i) commencing a foreclosure action with respect to this Deed To Secure Debt, (ii) furnishing notice to the Grantor or tenants under the Leases, (iii) making formal demand for

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the Rents, (iv) taking possession of the Property as a lender-in-possession, (v) obtaining the appointment of a receiver of the Rents, (vi) sequestering or impounding the Rents or (vii) taking any other affirmative action.

          3.05 Bankruptcy Provisions. Without limiting the provisions of Article III hereof or the absolute nature of the assignment of the Rents hereunder, the Grantor and the Grantee agree that, to the extent that the assignment of the Rents hereunder is deemed to be other than an absolute assignment, (a) this Deed To Secure Debt shall constitute a “security agreement” for purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest created by this Deed To Secure Debt extends to property of the Grantor acquired before the commencement of a bankruptcy case and to all amounts paid as Rents and (c) such security interest shall extend to all Rents acquired by the estate after the commencement of any bankruptcy case. Without limitation of the absolute nature of the assignment of the Rents hereunder, to the extent the Grantor (or the Grantor’s bankruptcy estate) shall be deemed to hold any interest in the Rents after the commencement of a voluntary or involuntary bankruptcy case, the Grantor hereby acknowledges and agrees that such Rents are and shall be deemed to be “cash collateral” under Section 363 of the Bankruptcy Code.

ARTICLE IV

EVENTS OF DEFAULT AND REMEDIES

          4.01 Events of Default. The occurrence of (i) an “Event of Default” under and as defined in the Credit Agreement, (ii) any “event of default” under the Existing Senior Notes Documents, the New Senior Notes Documents or the Refinancing Senior Notes Documents and (iii) any payment default, after any applicable grace period, under any Secured Credit Card Agreement or any Secured Hedging Agreement shall constitute an Event of Default (each, an “Event of Default”) hereunder.

          4.02 Remedies Upon Default. Upon the occurrence of a Noticed Event of Default, the Grantee may, in the Grantee’s sole discretion, either itself or by or through a nominee, assignee or otherwise, to the fullest extent permitted by law, exercise any or all of the following rights and remedies individually, collectively or cumulatively:

     (a) either in person or by its agent, with or without bringing any action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, (i) enter upon and take possession of the Property or any part thereof and of all books, records and accounts relating thereto or located thereon, in its own name or in the name of the Grantor, and do or cause to be done any acts which it deems necessary or desirable to preserve the value of the Property or any part thereof or interest therein, collect the income therefrom or protect the security hereof; (ii) with or without taking possession of the Property make such repairs, alterations, additions and improvements as the Grantee deems necessary or desirable and do any and all acts and perform any and all work which the Grantee deems necessary or desirable to complete any unfinished construction on the Property; (iii) make, cancel or modify Leases and sue for or otherwise collect the Rents thereof, including those past due and unpaid; (iv) make any payment or perform any act which the Grantor has failed to make or perform hereunder; (v) appear in

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and defend any action or proceeding purporting to affect the security hereof or the rights or powers of the Grantee; (vi) pay, purchase, contest or compromise any encumbrance, charge or Lien on the Property; and (vii) take such other actions as the Grantee deems necessary or desirable;

     (b) commence and maintain one or more actions at law or in equity or by any other appropriate remedy (i) to protect and enforce the rights of the Grantee hereunder, including for the specific performance of any covenant or agreement herein contained (which covenants and agreements the Grantor agrees shall be specifically enforceable by injunctive or other appropriate equitable remedy), (ii) to collect any sum then due hereunder, (iii) to aid in the execution of any power herein granted, or (iv) to foreclose this Deed To Secure Debt in accordance with Section 4.03 hereof;

     (c) exercise any or all of the remedies available to a secured party under the Uniform Commercial Code;

     (d) by notice to the Grantor (to the extent such notice is required to be given under the Credit Documents), but without formal demand, presentment, notice of intention to accelerate or of acceleration, protest or notice of protest, all of which are hereby waived by the Grantor, declare all of the Obligations (except for the Existing Senior Notes Obligations and the RAI Senior Notes Obligations) secured hereby to be immediately due and payable, and upon such declaration all of such indebtedness shall become and be immediately due and payable, anything in this Deed To Secure Debt or any other Credit Documents to the contrary notwithstanding; and

     (e) exercise any other right or remedy available to the Grantee under the Secured Debt Agreements.

          4.03 Right of Foreclosure. (a) Upon the occurrence of a Noticed Event of Default, the Grantee may sell and dispose of the Property at public auction, at the usual place for conducting sales at the courthouse in the county where the Property or any part thereof may be located, to the highest bidder for cash, first advertising the time, terms and place of such sale by publishing a notice thereof once a week for four consecutive weeks immediately preceding the date of sale (without regard to the actual number of days) in a newspaper in which sheriff’s advertisements are published in said county, all other notice being hereby waived by the Grantor; and the Grantee may thereupon execute and deliver to the purchaser at said sale a sufficient conveyance of the Property in fee simple, which conveyance may contain recitals as to the happening of the default upon which the execution of the power of sale, herein granted, depends, and said recitals shall be presumptive evidence that all preliminary acts prerequisite to said sale and deed were in all things duly complied with; and, following the occurrence and during the continuance of an Event of Default the Grantor hereby constitutes and appoints the Grantee or its assigns agent and attorney-in-fact to make such recitals, sale and conveyance, and all of the acts of such attorney-in-fact are hereby ratified, and the Grantor agrees that such recitals shall be binding and conclusive upon the Grantor and that the conveyance to be made by the Grantee, or its assigns (and in the event of deed in lieu of foreclosure, then as to such conveyance) shall be effectual to bar all right, title and interest, equity of redemption, including all statutory redemption, homestead, dower, curtesy and all other exemptions of the Grantor, or its successors

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in interest, in and to said Property; and the Grantor agrees that in case of a sale, as herein provided, the Grantor or any person in possession under the Grantor shall then become and be tenants holding over, and shall forthwith deliver possession to the purchaser at such sale, or be summarily dispossessed in accordance with the provisions of law applicable to tenants holding over; the power and agency hereby granted are coupled with an interest and are irrevocable by dissolution, insolvency, death or otherwise, and are in addition to any and all other remedies which the Grantee may have at law or in equity. Any portion of the Property sold pursuant to this Deed to Secure Debt may, to the extent permitted by applicable law, be sold in one parcel as an entirety, or in such parcels and in such manner or order as the Grantee in its sole discretion, may elect, to the maximum extent permitted by the laws of the State of Georgia. One or more exercises of the powers herein granted shall not extinguish or exhaust the power unless the Obligations are paid in full in cash or the Property is sold. At any such sale, the Grantee, its agents, representatives, successors, or assigns may bid for and acquire, as purchaser, the Property or any part thereof.

          (b) To the fullest extent permitted by law, any foreclosure of this Deed To Secure Debt and any other transfer of all or any part of the Property in extinguishment of all or any part of the Obligations may, at the Grantee’s option, be subject to any or all Leases of all or any part of the Property and the rights of tenants under such Leases. No failure to make any such tenant a defendant in any foreclosure proceedings or to foreclose or otherwise terminate any such Lease and the rights of any such tenant in connection with any such foreclosure or transfer shall be, or be asserted to be, a defense or hindrance to any such foreclosure or transfer or to any proceedings seeking collection of all or any part of the Obligations (including, without limitation, any deficiency remaining unpaid after completion of any such foreclosure or transfer).

          (c) It is agreed and understood that (x) this Deed To Secure Debt may be enforced only by the action of the Grantee acting upon the instructions of the Required Lenders or, if the CA Termination Date has occurred, the holders of a majority of the outstanding principal amount of all remaining Obligations, provided that if prior to the CA Termination Date a payment default with respect to at least $300,000,000 principal amount in the aggregate of Existing Senior Notes, New Senior Notes and/or Refinancing Senior Notes has continued for at least 180 days (and such defaulted payment has not been received pursuant to a drawing under any letter of credit), the holders of a majority of the outstanding principal amount of the Indebtedness subject to such payment default or defaults can direct the Grantee to commence and continue enforcement of the security interest created hereunder, which the Grantee shall comply with subject to receiving any indemnity which it reasonably requests, provided further, that the Grantee shall thereafter comply only with the directions of the Required Lenders as to carrying out such enforcement so long as such directions are not adverse to the aforesaid directions of the holders of Indebtedness subject to such payment default or defaults, and (y) no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Deed To Secure Debt or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies shall be exercised exclusively by the Grantee for the benefit of the Secured Creditors as their interest may appear upon the terms of this Deed To Secure Debt and the other Secured Debt Agreements.

          4.04 Application of Proceeds. (a) To the fullest extent permitted by law, the proceeds of any sale of, and the Rents and other amounts generated by the holding, leasing,

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management, operation or other use of, each item of the Property pursuant to this Deed To Secure Debt (the “Trust Property Proceeds”) shall be applied by the Grantee (or the receiver, if one is appointed) as follows:

          (i) first, to the payment of all Obligations owing to the Grantee of the type described in clauses (vii), (viii), (ix), (x) and (xi) of the definition of Obligations herein;

          (ii) second, to the extent Trust Property Proceeds of Property remain after the application pursuant to preceding clause (i), an amount equal to the outstanding Applicable Obligations secured by such item of Property shall be paid to the Secured Creditors as their interests may appear, with (x) each Secured Creditor receiving an amount equal to its outstanding Applicable Obligations secured by such item of Property or, if the proceeds are insufficient to pay in full all such Applicable Obligations, its Pro Rata Share of the amount so remaining to be distributed and (y) in the case of the Credit Document Obligations, the Existing Senior Notes Obligations, the New Senior Notes Obligations and the Refinancing Senior Notes Obligations included in such Applicable Obligations, any such amount to be applied (1) first to the payment of interest in respect of the unpaid principal amount of Loans, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, as the case may be, (2) second to the payment of principal of Loans, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, as the case may be, and (3) third to the other Credit Document Obligations, Existing Senior Notes Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be; and

          (iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii) to the Grantor or, to the extent directed by the Grantor or a court of competent jurisdiction, to whomever may be lawfully entitled to receive such surplus.

          (b) For purposes of this Agreement, “Pro Rata Share” shall mean when calculating a Secured Creditor’s portion of any distribution or amount pursuant to clause (a) above, the amount (expressed as a percentage) equal to a fraction the numerator of which is the then outstanding amount of the relevant Applicable Obligations secured by the relevant item of Property owed such Secured Creditor and the denominator of which is the then outstanding amount of all relevant Applicable Obligations secured by the relevant item of Property.

          (c) All payments required to be made to the (i) Lender Creditors hereunder shall be made to the Administrative Agent for the account of the respective Lender Creditors, (ii) Credit Card Issuers hereunder shall be made to the Credit Card Issuer(s) under the applicable Secured Credit Card Agreement, (iii) Hedging Creditors hereunder shall be made to the paying agent under the applicable Secured Hedging Agreement or, in the case of Secured Hedging Agreements without a paying agent, directly to the applicable Hedging Creditors, (iv) Existing Senior Notes Creditors hereunder shall be made to the Existing Senior Notes Trustee for the account of the respective Existing Senior Notes Creditors, (v) New Senior Notes Creditors hereunder shall be made to the New Senior Notes Trustee for the account of the respective New Senior Notes Creditors and (vi) Refinancing Senior Notes Creditors hereunder shall be made to

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the Refinancing Senior Notes Trustee for the account of the respective Refinancing Senior Notes Creditors.

          (d) For purposes of applying payments received in accordance with this Section 4.04, the Grantee shall be entitled to rely upon (i) the Administrative Agent for a determination of the outstanding Credit Document Obligations, (ii) any Credit Card Issuer for a determination of the outstanding Credit Card Obligations owed to such Credit Card Issuer, (iii) upon any Hedging Creditor for a determination of the outstanding Hedging Obligations owed to such Hedging Creditor, (iv) the Existing Senior Notes Trustee for a determination of the outstanding Existing Senior Notes Obligations, (v) the New Senior Notes Trustee for a determination of the outstanding New Senior Notes Obligations and (vi) the Refinancing Senior Notes Trustee for a determination of the outstanding Refinancing Senior Notes Obligations. Unless it has actual knowledge (including by way of written notice from a Secured Creditor) to the contrary, the Administrative Agent under the Credit Agreement, in furnishing information pursuant to the preceding sentence, and the Grantee, in acting hereunder, shall be entitled to assume that no Credit Document Obligations other than principal, interest and regularly accruing fees are owing to any Lender Creditor.

          (e) It is understood and agreed that the Grantor shall remain liable to the extent of any deficiency between (x) the amount of the Obligations for which it is responsible directly or as a guarantor that are satisfied with proceeds of the Property and (y) the aggregate outstanding amount of such Obligations.

          4.05 Appointment of Receiver. Upon the occurrence and during the continuance of a Noticed Event of Default, the Grantee as a matter of strict right and without notice to the Grantor or anyone claiming under the Grantor, and without regard to the adequacy or the then value of the Property or the interest of the Grantor therein or the solvency of any party bound for payment of the Obligations, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Property, and the Grantor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual rights, powers and duties of receivers in like or similar cases and all the rights, powers and duties of the Grantee in case of entry as provided in Section 4.02 hereof, including but not limited to the full power to rent, maintain and otherwise operate the Property upon such terms as are approved by the court and shall continue as such and exercise all such powers until the date of confirmation of sale of the Property unless such receivership is sooner terminated.

          4.06 Exercise of Rights and Remedies. The entering upon and taking possession of the Property, the collection of any Rents and the exercise of any of the rights contained in this Article IV, shall not, alone, cure or waive any Event of Default or notice of default hereunder or invalidate any act done in response to such Event of Default or pursuant to such notice of default and, notwithstanding the continuance in possession of the Property or the collection, receipt and application of Rents, the Grantee shall be entitled to exercise every right provided for herein or in the Secured Debt Agreements, or at law or in equity upon the occurrence of any Event of Default.

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          4.07 Remedies Not Exclusive. The Grantee shall be entitled to enforce payment and performance of the Obligations and to exercise all rights and powers under this Deed To Secure Debt or other agreement or any laws now or hereafter in force, notwithstanding that some or all of the Obligations may now or hereafter be otherwise secured, whether by mortgage, deed of trust, security deed, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed To Secure Debt nor its enforcement, whether by court action or pursuant to the powers herein contained, shall prejudice or in any manner affect the Grantee’s right to realize upon or enforce any other security now or hereafter held by the Grantee, it being agreed that the Grantee shall be entitled to enforce this Deed To Secure Debt and any other security now or hereafter held by the Grantee in such order and manner as it may in its absolute and sole discretion and election determine. No remedy herein conferred upon or reserved to the Grantee is intended to be exclusive of any other remedy herein or in any of the other Secured Debt Agreements or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy to which the Grantee is entitled may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Grantee, and the Grantee may pursue inconsistent remedies. No delay or omission of the Grantee to exercise any right or power accruing upon any Event of Default shall impair any right or power or shall be construed as a waiver of any Event of Default or any acquiescence therein. If the Grantee shall have proceeded to invoke any right or remedy hereunder or under any other Secured Debt Agreement, and shall thereafter elect to discontinue or abandon it for any reason, the Grantee shall have the unqualified right to do so and, in such an event, the rights and remedies of the Grantee shall continue as if such right or remedy had never been invoked, but no such discontinuance or abandonment shall waive any Event of Default which may then exist or the right of the Grantee thereafter to exercise any right or remedy under the Secured Debt Agreements for such Event of Default.

          4.08 WAIVER OF REDEMPTION, NOTICE, MARSHALLING, ETC. NOTWITHSTANDING ANYTHING HEREIN CONTAINED TO THE CONTRARY, TO THE EXTENT PERMITTED BY LAW, THE GRANTOR ACKNOWLEDGING THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS HEREUNDER; (A) WILL NOT (I) AT ANY TIME INSIST UPON, OR PLEAD, OR IN ANY MANNER WHATSOEVER, CLAIM OR TAKE ANY BENEFIT OR ADVANTAGE OF ANY STAY OR EXTENSION OR MORATORIUM LAW, PRESENT OR FUTURE STATUTE OF LIMITATIONS, ANY LAW RELATING TO THE ADMINISTRATION OF ESTATES OF DECEDENTS, APPRAISEMENT, VALUATION, REDEMPTION, STATUTORY RIGHT OF REDEMPTION, OR THE MATURING OR DECLARING DUE OF THE WHOLE OR ANY PART OF THE OBLIGATIONS, NOTICE OF INTENTION OF SUCH MATURING OR DECLARING DUE, OTHER NOTICE (WHETHER OF DEFAULTS, ADVANCES, THE CREATION, EXISTENCE, EXTENSION OR RENEWAL OF ANY OF THE OBLIGATIONS OR OTHERWISE, EXCEPT FOR RIGHTS TO NOTICES EXPRESSLY GRANTED HEREIN OR IN THE SECURED DEBT AGREEMENTS), SUBROGATION, ANY SET-OFF RIGHTS, HOMESTEAD OR ANY OTHER EXEMPTIONS FROM EXECUTION OR SALE OF THE PROPERTY OR ANY PART THEREOF, WHEREVER ENACTED, NOW OR AT ANY TIME HEREAFTER IN FORCE, WHICH MAY AFFECT THE COVENANTS AND TERMS OF PERFORMANCE OF THIS DEED TO SECURE DEBT, OR (II) CLAIM, TAKE OR INSIST UPON ANY BENEFIT

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OR ADVANTAGE OF ANY LAW NOW OR HEREAFTER IN FORCE PROVIDING FOR THE VALUATION OR APPRAISAL OF THE PROPERTY OR ANY PART THEREOF, PRIOR TO ANY SALE OR SALES THEREOF WHICH MAY BE MADE PURSUANT TO ANY PROVISION HEREOF, OR PURSUANT TO THE DECREE, JUDGMENT OR ORDER OF ANY COURT OF COMPETENT JURISDICTION; OR (III) AFTER ANY SUCH SALE OR SALES, CLAIM OR EXERCISE ANY RIGHT UNDER ANY STATUTE HERETOFORE OR HEREAFTER ENACTED TO REDEEM THE PROPERTY SO SOLD OR ANY PART THEREOF; AND (B) COVENANTS NOT TO HINDER, DELAY OR IMPEDE THE EXECUTION OF ANY POWER HEREIN GRANTED OR DELEGATED TO THE GRANTEE, BUT TO SUFFER AND PERMIT THE EXECUTION OF EVERY POWER AS THOUGH NO SUCH LAW OR LAWS HAD BEEN MADE OR ENACTED. THE GRANTOR, FOR ITSELF AND ALL WHO MAY CLAIM UNDER IT, WAIVES, TO THE EXTENT THAT IT LAWFULLY MAY, ALL RIGHT TO HAVE THE PROPERTY MARSHALLED UPON ANY FORECLOSURE HEREOF.

          4.09 Expenses of Enforcement. In connection with any action to enforce any remedy of the Grantee under this Deed To Secure Debt, the Grantor agrees to pay all costs and expenses which may be paid or incurred by or on behalf of the Grantee, including, without limitation, reasonable attorneys’ fees, receiver’s fees, appraiser’s fees, outlays for documentary and expert evidence, stenographer’s charges, publication costs, and costs (which may be estimated as to items to be expended after entry of the decree) of procuring all such abstracts of title, title searches and examinations, title insurance policies and similar data and assurances with respect to title and value as the Grantee may deem necessary or desirable, and neither the Grantee nor any other Person shall be required to accept tender of any portion of the Obligations unless the same be accompanied by a tender of all such expenses, costs and commissions. All of the costs and expenses described in this Section 4.09, and such expenses and fees as may be incurred in the protection of the Property and the maintenance of the Lien of this Deed To Secure Debt, including the reasonable fees of any attorney employed by the Grantee in any litigation or proceeding, including appellate proceedings, affecting this Deed To Secure Debt or the Property(including, without limitation, the occupancy thereof or any construction work performed thereon), including probate and bankruptcy proceedings, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding whether or not an action is actually commenced, shall be immediately due and payable by the Grantor, with interest thereon at the rate of interest set forth in the Secured Debt Agreements and shall be part of the Obligations secured by this Deed To Secure Debt.

          4.10 Indemnity. (a) The Grantor agrees to indemnify, reimburse and hold the Grantee, each other Secured Creditor and their respective successors, permitted assigns, employees, agents and servants (hereinafter in this Section 4.10 referred to individually, as “Indemnitee,” and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments and any and all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) (for the purposes of this Section 4.10 the foregoing are collectively called “expenses”) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Deed To Secure Debt, or the documents executed in connection herewith or in any other way connected with the enforcement of any of the terms of, or the

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preservation of any rights hereunder, or in any way relating to or arising out of the ownership, lease, financing, possession, operation, condition, sale or other disposition, or use of the Property, the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 4.10(a) for expenses, losses, damages or liabilities to the extent caused by the gross negligence or wilful misconduct of such Indemnitee. The Grantor agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, loss, damage, penalty, claim, demand, action, judgment or suit, the Grantor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the Grantor of any such assertion of which such Indemnitee has knowledge.

          (b) Without limiting the application of Section 4.10(a), the Grantor jointly and severally agrees to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any material misrepresentation by Grantor in this Deed To Secure Debt, or in any statement or writing contemplated by or made or delivered pursuant to or in connection with this Deed To Secure Debt.

          (c) If and to the extent that the obligations of the Grantor under this Section 4.10 are unenforceable for any reason, the Grantor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

          4.11 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Property. The indemnity obligations of the Grantor contained in Sections 4.09 and 4.10 shall continue in full force and effect notwithstanding the full payment of all of the Notes issued under the Credit Agreement, the termination of all Secured Hedging Agreements, the full payment of all Existing Senior Notes issued under the Existing Senior Notes Indenture, the full payment of all New Senior Notes issued under the New Senior Notes Indenture, the full payment of all Refinancing Senior Notes issued under the Refinancing Senior Notes Indenture and the payment of all of the other Obligations and notwithstanding the discharge thereof.

ARTICLE V

ADDITIONAL COLLATERAL

          5.01 Additional Collateral. (a) The Grantor acknowledges and agrees that its Applicable Obligations are secured by the Property and various other collateral including, without limitation, at the time of execution of this Deed To Secure Debt certain personal property of the Grantor described in the Credit Documents. The Grantor specifically acknowledges and agrees that the Property, in and of itself, if foreclosed or realized upon would

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not be sufficient to satisfy the outstanding amount of the Obligations. Accordingly, the Grantor acknowledges that it is in the Grantor’s contemplation that the other collateral pledged to secure the Applicable Obligations may be pursued by the Grantee in separate proceedings in the various States, counties and other countries where such collateral may be located and additionally that the Grantor liable for payment of the Obligations will remain liable for any deficiency judgments in addition to any amounts the Grantee may realize on sales of other property or any other collateral given as security for the Obligations. Specifically, and without limitation of the foregoing, it is agreed that it is the intent of the parties hereto that in the event of a foreclosure of this Deed To Secure Debt, the Indebtedness evidencing the Obligations shall not be deemed merged into any judgment of foreclosure, but rather shall remain outstanding. It is the further intent and understanding of the parties that the Grantee, following a Noticed Event of Default, may pursue all of its collateral with the Obligations remaining outstanding and in full force and effect notwithstanding any judgment of foreclosure or any other judgment which the Grantee may obtain.

          (b) The Grantor acknowledges and agrees that the Property and the property which may from time to time be encumbered by the other Secured Debt Agreements may be located in more than one State or country and therefore the Grantor waives and relinquishes any and all rights it may have, whether at law or equity, to require the Grantee to proceed to enforce or exercise any rights, powers and remedies it may have under the Secured Debt Agreements in any particular manner, in any particular order, or in any particular State or other jurisdiction. Furthermore, the Grantor acknowledges and agrees that the Grantee shall be allowed to enforce payment and performance of the Obligations and to exercise all rights and powers provided under this Deed To Secure Debt, or the other Secured Debt Agreements or under any provision of law, by one or more proceedings, whether contemporaneous, consecutive or both in any one or more States in which the security is located. Neither the acceptance of this Deed To Secure Debt, or any Credit Document nor its enforcement in one State, whether by court action, power of sale, or otherwise, shall prejudice or in any way limit or preclude enforcement of the Credit Documents through one or more additional proceedings, in that State or in any other State or country.

          (c) The Grantor further agrees that any particular remedy or proceeding, including, without limitation, foreclosure through court action (in a state or federal court) or power of sale, may be brought and prosecuted in the local or federal courts of any one or more States as to all or any part of the Property or the property encumbered by the Secured Debt Agreements wherever located, without regard to the fact that any one or more prior or contemporaneous proceedings have been situated elsewhere with respect to the same or any other part of the Property and the property encumbered by the Secured Debt Agreements.

          (d) The Grantee may resort to any other security held by the Grantee for the payment of the Obligations in such order and manner as the Grantee may elect.

          (e) Notwithstanding anything contained herein to the contrary, the Grantee shall be under no duty to the Grantor or others, including, without limitation, the holder of any junior, senior or subordinate mortgage on the Property or any part thereof or on any other security held by the Grantee, to exercise or exhaust all or any of the rights, powers and remedies available to the Grantee.

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ARTICLE VI

MISCELLANEOUS

          6.01 Governing Law. The provisions of this Deed To Secure Debt regarding the creation, perfection and enforcement of the liens and security interests herein granted shall be governed by and construed under the laws of the state in which the Property is located. All other provisions of this Deed To Secure Debt shall be governed by the laws of the State of New York (including, without limitation, Section 5-1401 of the General Obligations Law of the State of New York), without regard to choice of laws provisions.

          6.02 Limitation on Interest. It is the intent of the Grantor and the Grantee in the execution of this Deed To Secure Debt and all other instruments evidencing or securing the Obligations to contract in strict compliance with applicable usury laws. In furtherance thereof, the Grantee and the Grantor stipulate and agree that none of the terms and provisions contained in this Deed To Secure Debt shall ever be construed to create a contract for the use, forbearance or retention of money requiring payment of interest at a rate in excess of the maximum interest rate permitted to be charged by relevant law. If this Deed To Secure Debt or any other instrument evidencing or securing the Obligations violates any applicable usury law, then the interest rate payable in respect of the Loans shall be the highest rate permissible by law.

          6.03 Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile transmission or cable communications) and mailed, telegraphed, telexed, telecopied, cabled or delivered (including by way of overnight courier):

(i)	if to the Grantor, at;
	R. J. Reynolds Tobacco Company
	401 North Main Street,
	Winston-Salem, North Carolina 27102
(ii)	if to the Grantee, at:
	JPMorgan Chase Bank, N.A.
	270 Park Avenue
	New York, New York 10017
	Attn.: Raju Nanoo
	Tel. No.: 212-270-2272
	Fax. No.: 212-270-5120

     (iii) if to any Lender (other than the Grantee), at such address as such Lender shall have specified in the Credit Agreement;

     (iv) if to any Credit Card Issuer, at such address as such Credit Card Issuer shall have specified in writing to the Grantor and the Grantee;

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     (v) if to any Hedging Creditor, at such address as such Hedging Creditor shall have specified in writing to the Grantor and the Grantee;

     (vi) if to any Existing Senior Notes Creditor, at such address of the Existing Senior Notes Trustee as the Existing Senior Notes Trustee shall have specified in writing to the Grantor and the Grantee;

     (vii) if to any New Senior Notes Creditor, at such address of the New Senior Notes Trustee as the New Senior Notes Trustee shall have specified in writing to the Grantor and the Grantee;

     (viii) if to any Refinancing Senior Notes Creditor, at such address of the Refinancing Senior Notes Trustee as the Refinancing Senior Notes Trustee shall have specified in writing to the Grantor and the Grantee;

or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. Except as otherwise expressly provided herein, all such notices and communications shall be deemed to have been duly given or made (i) in the case of any Secured Creditor, when received and (ii) in the case of the Grantor, when delivered to the Grantor in any manner required or permitted hereunder.

          6.04 Captions. The captions or headings at the beginning of each Article and Section hereof are for the convenience of the parties and are not a part of this Deed To Secure Debt.

          6.05 Amendment. None of the terms and conditions of this Deed To Secure Debt may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Grantor and the Grantee (with the consent of (x) if prior to the CA Termination Date, the Required Lenders or, to the extent required by Section 12.12 of the Credit Agreement, all of the Lenders and (y) if on and after the CA Termination Date, the holders of at least a majority of the outstanding principal amount of the Obligations remaining outstanding), provided that (i) no such change, waiver, modification or variance shall be made to Section 4.04 hereof or this Section 6.05 without the consent of each Secured Creditor adversely affected thereby and (ii) that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall require the written consent of the Requisite Creditors of such Class of Secured Creditors. For the purpose of this Agreement, the term “Class” shall mean each class of Secured Creditors, i.e., whether (1) the Lender Creditors as holders of the Credit Document Obligations, (2) the Credit Card Issuers as holders of the Credit Card Obligations, (3) the Hedging Creditors as holders of the Hedging Obligations, (4) the Existing Senior Notes Creditors as holders of the Existing Senior Notes Obligations, (5) the New Senior Notes Creditors as holders of the New Senior Notes Obligations and (6) the Refinancing Senior Notes Creditors as holders of the Refinancing Senior Notes Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of any Class shall mean each of (1) with respect to each of the Credit Document Obligations, the Required Lenders, (2) with respect to the Credit Card Obligations, the holders of at least a majority of all Credit Card Obligations outstanding from time to time, (3) with respect to the Hedging Obligations, the holders of at least a majority of all Secured Hedging Obligations

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outstanding from time to time, (4) with respect to the Existing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Existing Senior Notes, (5) with respect to the New Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the New Senior Notes and (6) with respect to the Refinancing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Refinancing Senior Notes.

          6.06 Obligations Absolute. The Obligations of the Grantor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of the Grantor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Deed To Secure Debt, any other Credit Document or any other Secured Debt Agreement, except as specifically set forth in a waiver granted pursuant to Section 6.05 hereof; or (c) any amendment to or modification of any Credit Document or any other Secured Debt Agreement, except as specifically set forth in a waiver granted pursuant to Section 6.05 hereof, or any security for any of the Obligations; whether or not the Grantor shall have notice or knowledge of any of the foregoing.

          6.07 Further Assurances. The Grantor shall, upon the request of the Grantee and at the expense of the Grantor: (a) promptly correct any defect, error or omission which may be discovered in the contents of this Deed To Secure Debt or any UCC financing statements filed in connection herewith; (b) promptly execute, acknowledge, deliver and record or file such further instruments (including, without limitation, further mortgages, deeds to secure debt, security deeds, security agreements, financing statements, continuation statements and assignments of rents or leases) and promptly do such further acts as may be necessary, desirable or proper to carry out more effectively the purposes of this Deed To Secure Debt and to subject to the security interests hereof any property intended by the terms hereof to be covered hereby, including specifically, but without limitation, any renewals, additions, substitutions, replacements or appurtenances to the Property; and (c) promptly execute, acknowledge, deliver, procure and record or file any document or instrument (including specifically any financing statement) deemed advisable by the Grantee to protect, continue or perfect the security interests hereunder against the rights or interests of third persons.

          6.08 Partial Invalidity. If any of the provisions of this Deed To Secure Debt or the application thereof to any person, party or circumstances shall to any extent be invalid or unenforceable, the remainder of this Deed To Secure Debt, or the application of such provision or provisions to persons, parties or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every provision of this Deed To Secure Debt shall be valid and enforceable to the fullest extent permitted by law.

          6.09 Partial Releases. No release from the security interest of this Deed To Secure Debt of any part of the Property by the Grantee shall in any way alter, vary or diminish the force or effect of this Deed To Secure Debt on the balance of the Property or the priority of the security interest of this Deed To Secure Debt on the balance of the Property.

          6.10 Priority. This Deed To Secure Debt is intended to and shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, excepting

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solely taxes and assessments levied on the real estate, to the extent of the maximum amount secured hereby.

          6.11 Covenants Running with the Land. All Obligations are intended by the Grantor and the Grantee to be, and shall be construed as, covenants running with the Property. As used herein, the “Grantor” shall refer to the party named in the first paragraph of this Deed To Secure Debt and to any subsequent owner of all or any portion of the Property. All persons who may have or acquire an interest in the Property shall be deemed to have notice of, and be bound by, the terms of the Credit Agreement and the other Secured Debt Agreements; provided, however, that no such party shall be entitled to any rights thereunder without prior written consent of the Grantee.

          6.12 Successors and Assigns. This Deed To Secure Debt shall be binding upon and inure to the benefit of the Grantee and the Grantor and their respective successors and assigns. Except as otherwise permitted by Credit Agreement, the Grantor shall not, without the prior written consent of the Grantee, assign any rights, duties, or obligations hereunder.

          6.13 Purpose of Loans. The Grantor hereby represents and agrees that the Loans, Existing Senior Notes, New Senior Notes and Refinancing Senior Notes have or are being obtained or issued for business or commercial purposes, and the proceeds thereof will not be used for personal, family, residential, household or agricultural purposes.

          6.14 No Joint Venture or Partnership. The relationship created hereunder and under the other Credit Documents, the Secured Hedging Agreements, the Secured Credit Card Agreements, the Existing Senior Notes Documents, the New Senior Notes Documents and the Refinancing Senior Notes Documents is that of creditor/debtor. The Grantee does not owe any fiduciary or special obligation to the Grantor and/or any of the Grantor’s, officers, partners, agents, or representatives. Nothing herein or in any other Credit Document, any Secured Hedging Agreement, any Secured Credit Card Document, any Existing Senior Notes Document, any New Senior Notes Document or any Refinancing Senior Notes Document is intended to create a joint venture, partnership, tenancy-in-common or joint tenancy relationship between the Grantor and the Grantee.

          6.15 The Grantee as Collateral Agent for Secured Creditors. It is expressly understood and agreed that the rights and obligations of the Grantee as holder of this Deed To Secure Debt and as Collateral Agent for the Secured Creditors and otherwise under this Deed To Secure Debt are only those expressly set forth in this Deed To Secure Debt and in the Credit Agreement. The Grantee shall act hereunder pursuant to the terms and conditions set forth herein in Section 11 of the Credit Agreement and in Annex M to the Security Agreement, the terms of which shall be deemed incorporated herein by reference as fully as if same were set forth herein in their entirety (for such purpose, treating each reference to the “Security Agreement” as a reference to this Deed To Secure Debt, each reference to the “Collateral Agent” as a reference to the Grantee and each reference to an “Assignor” as a reference to a “Grantor”).

          6.16 Full Recourse. This Deed To Secure Debt is made with full recourse to the Grantor and pursuant to and upon all the warranties, representations, covenants, agreements on

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the part of the Grantor contained herein, in the other Credit Documents and the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

          6.17 Reduction of Secured Amount. In the event the amount secured by this Deed To Secure Debt is less than the aggregate Obligations, then the amount secured hereby shall be reduced only by the last and final sums that the Grantor or the Borrower repays with respect to the Obligations and shall not be reduced by any intervening repayments of the Obligations. So long as the balance of the Obligations exceeds the amount secured hereby, any payments of the Obligations shall not be deemed to be applied against, or to reduce, the portion of the Obligations secured by this Deed To Secure Debt. Such payments shall instead be deemed to reduce only such portions of the Obligations as are secured by other collateral located outside of the state in which the Property is located or are unsecured.

          6.18 Acknowledgment of Receipt. The Grantor hereby acknowledges receipt of a true copy of this Deed To Secure Debt.

          6.19 Release Payment. (a) After the Termination Date (as defined below), this Deed To Secure Debt shall terminate (provided that all indemnities set forth herein shall survive any such termination) and the Grantee, at the request and expense of the Grantor, will execute and deliver to the Grantor a proper instrument or instruments to cancel and surrender the estate and interest created by this Deed to Secure Debt (without recourse and without representation or warranty). As used in this Deed To Secure Debt, (i) “CA Termination Date” shall mean the date upon which the Total Commitment has been terminated, no Letter of Credit or Note under the Credit Agreement is outstanding and all other Credit Document Obligations have been paid in full in cash (other than arising from indemnities for which no request for payment has been made) and (ii) “Termination Date” shall mean the date upon which (x) the CA Termination Date shall have occurred and (y) if (but only if) a Notified Non-Credit Agreement Event of Default (as defined below) shall have occurred and be continuing on the CA Termination Date (and after giving effect thereto), either (I) such Notified Non-Credit Agreement Event of Default shall have been cured or waived by the requisite holders of the relevant Obligations subject to such Notified Non-Credit Agreement Event of Default or (II) all Secured Credit Card Agreements and all Secured Hedging Agreements (if any) giving rise to a Notified Non-Credit Agreement Event of Default shall have been terminated and all Obligations subject to such Notified Non-Credit Agreement Event of Default shall have been paid in full (other than arising from indemnities for which no request for payment has been made). As used herein “Notified Non-Credit Agreement Event of Default” means (i) the acceleration of the maturity of any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes or the failure to pay at maturity any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, or the occurrence of any bankruptcy or insolvency Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, (ii) any Event of Default under a Secured Credit Card Agreement or (iii) any Event of Default under a Secured Hedging Agreement, in the case of any event described in clause (i), (ii) or (iii) to the extent the Existing Senior Notes Trustee, New Senior Notes Trustee, the Refinancing Senior Notes Trustee, the relevant Hedging Creditor or the relevant Credit Card Issuer, as the case may be, has given written notice to the Grantee that a “Notified Non-Credit Agreement Event of Default” exists; provided that such written notice may only be given if such Event of Default is continuing and, provided further, that any such Notified Non-Credit Agreement Event of Default shall cease to exist (I) once there

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is no longer any Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture, the Refinancing Senior Notes Indenture, the respective Secured Credit Card Agreement or the respective Secured Hedging Agreement, as the case may be, in existence, (II) in the case of an Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture, or the Refinancing Senior Notes Indenture, after all Existing Senior Notes Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be, have been repaid in full, (III) in the case of an Event of Default under a Secured Credit Card Agreement or a Secured Hedging Agreement, such Secured Hedging Agreement, as the case may be, has been terminated and all Credit Card Obligations or Hedging Obligations, as the case may be, thereunder have been repaid in full, (IV) in the case of an Event of Default under the Existing Senior Notes Indenture, New Senior Notes Indenture or the Refinancing Senior Notes Indenture, if the Existing Senior Notes Creditors, New Senior Notes Creditors or the Refinancing Senior Notes Creditors, as the case may be, holding at least a majority of the aggregate principal amount of the outstanding Existing Senior Notes, New Senior Notes or the Refinancing Senior Notes, as the case may be, at such time have rescinded such written notice and (V) in the case of an Event of Default under a Secured Credit Card Agreement or a Secured Hedging Agreement, the requisite Credit Card Issuers with Credit Card Obligations or Hedging Creditors with Hedging Obligations thereunder at such time have rescinded such written notice.

          (b) So long as no Notified Non-Credit Agreement Event of Default has occurred and is continuing, in the event that (x) prior to the CA Termination Date, (i) any part of the Property is sold or otherwise disposed of in connection with a sale or other disposition permitted by Section 8.02 of the Credit Agreement (it being agreed for such purposes that a release will be deemed “permitted by Section 8.02 of the Credit Agreement” if the proposed transaction constitutes an exception to Section 8.02(f) of the Credit Agreement) or (ii) all or any part of the Property is released at the direction of the Required Lenders (or all the Lenders if required by Section 12.12 of the Credit Agreement), and the proceeds of such sale or disposition or from such release (if any) are applied in accordance with the terms of the Credit Agreement to the extent required to be so applied or (y) on and after the CA Termination Date, any part of the Property is sold or otherwise disposed of without violating the Existing Senior Notes Documents, the New Senior Notes Documents, the Refinancing Senior Notes Documents, the Secured Credit Card Agreements and the Secured Hedging Agreements, the Grantee, at the request and expense of the Grantor, will release such Property from this Deed To Secure Debt in the manner provided in clause (a) above (it being understood and agreed that upon the release of all or any portion of the Property by the Grantee at the direction of the Lenders as provided above, the security interest in the Property in favor of the Credit Card Issuers, the Hedging Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors shall automatically be released).

          (c) In addition to the foregoing, all Property shall be automatically released (subject to reinstatement upon the occurrence of a new Trigger Event) in accordance with Section 7.10(i) of the Credit Agreement.

          (d) At any time that the Grantor desires that the Grantee take any action to give effect to any release of Property pursuant to the foregoing Section 6.19(a), (b) or (c), it shall deliver to the Grantee a certificate signed by an authorized officer describing the Property to be released and certifying its entitlement to a release pursuant to the applicable provisions of

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Sections 6.19(a), (b) or (c) and in such case the Grantee, at the request and expense of the Grantor, will execute such documents (without recourse and without any representation or warranty) as required to duly release such Property. The Grantee shall have no liability whatsoever to any Secured Creditor as the result of any release of Property by it as permitted by (or which the Grantee in good faith believes to be permitted by) this Section 6.19. Upon any release of Property pursuant to Section 6.19(a), (b) or (c), so long as no Noticed Event of Default is then in existence, none of the Secured Creditors shall have any continuing right or interest in such Property, or the proceeds thereof (subject to reinstatement rights upon the occurrence of a new Trigger Event in the case of a release pursuant to Section 6.19(c)(i)).

          6.20 Time of the Essence. Time is of the essence of this Deed To Secure Debt.

          6.21 The Grantee’s Powers. Without affecting the liability of any other Person liable for the payment and performance of the Obligations and without affecting the security interest of this Deed To Secure Debt in any way, the Grantee (acting at the direction of the requisite holders of the relevant Obligations affected thereby) may, from time to time, regardless of consideration and without notice to or consent by the holder of any subordinate Lien, right, title or interest in or to the Property, (a) release any Persons liable for the Obligations, (b) extend the maturity of, increase or otherwise alter any of the terms of the Obligations, (c) modify the interest rate payable on the principal balance of the Obligations, (d) release or reconvey, or cause to be released or reconveyed, all or any portion of the Property, or (e) take or release any other or additional security for the Obligations.

          6.22 Rules of Usage. The following rules of usage shall apply to this Deed To Secure Debt unless otherwise required by the context:

     (a) Singular words shall connote the plural as well as the singular, and vice versa, as may be appropriate.

     (b) The words “herein”, “hereof” and “hereunder” and words of similar import appearing in each such document shall be construed to refer to such document as a whole and not to any particular section, paragraph or other subpart thereof unless expressly so stated.

     (c) References to any Person shall include such Person and its successors and permitted assigns.

     (d) Each of the parties hereto and their counsel have reviewed and revised, or requested revisions to, such documents, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construction and interpretation of such documents and any amendments or exhibits thereto.

     (e) Unless an express provision requires otherwise, each reference to “the Property” shall be deemed a reference to “the Property or any part thereof”, and each reference to “Secured Property” shall be deemed a reference to “the Secured Property or any part thereof”.

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          6.23 No Off-Set. All sums payable by the Grantor shall be paid without counterclaim, other compulsory counterclaims, set-off, or deduction and without abatement, suspension, deferment, diminution or reduction, and the Obligations shall in no way be released, discharged or otherwise affected (except as expressly provided herein or in the Credit Agreement) by reason of: (i) any damage or any condemnation of the Property or any part thereof; (ii) any title defect or encumbrance or any eviction from the Property or any part thereof by title paramount or otherwise; or (iii) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to the Grantee or the Grantor, or any action taken with respect to this Deed To Secure Debt by any agent or receiver of the Grantee. The Grantor waives, to the extent permitted by law, all rights now or hereafter conferred by statute or otherwise to any abatement, suspension, deferment, diminution or reduction of any of the Obligations.

          6.24 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial. (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS DEED TO SECURE DEBT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GRANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GRANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS PRENTICE-HALL CORPORATION SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 80 STATE STREET, ALBANY, NEW YORK 12207-2543 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE GRANTOR SHALL DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN THE STATE OF NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THIS DEED TO SECURE DEBT. THE GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE GRANTOR AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 6.03 HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER THE CREDIT AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO

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COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.

          (b) THE GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS DEED TO SECURE DEBT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

          (c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS DEED TO SECURE DEBT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS DEED TO SECURE DEBT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

          6.25 Future Advances. This Deed To Secure Debt is given to secure the Grantor’s Applicable Obligations under, or in respect of, the Secured Debt Agreements to which the Grantor is “party” and shall secure not only Applicable Obligations with respect to presently existing indebtedness under the foregoing documents and agreements but also any and all other indebtedness now owing or which may hereafter be owing by the Grantor or the Borrower, as the case may be, to the Secured Creditors, however incurred, whether interest, discount or otherwise, and whether the same shall be deferred, accrued or capitalized, including future advances and re-advances, whether such advances are obligatory or to be made at the option of the Secured Creditors, or otherwise, to the same extent as if such future advances were made on the date of the execution of this Deed To Secure Debt. The security interest of this Deed To Secure Debt shall be valid as to all indebtedness secured hereby, including future advances, from the time of its filing for record in the recorder’s office of the county in which the Property is located. This Deed To Secure Debt is intended to and shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, excepting solely taxes and assessments levied on the real estate, to the extent of the maximum amount secured hereby, and Permitted Encumbrances. Although this Deed To Secure Debt is given wholly or partly to secure all future obligations which may be incurred hereunder and under the other Secured Debt Agreements, whether obligatory or optional, the Grantor and the Grantee hereby acknowledge and agree that the Grantee and the other Secured Creditors are obligated by the terms of the Secured Debt Agreements to make certain future advances, including advances of a revolving nature, subject to the fulfillment of the relevant conditions set forth in the Secured Debt Agreements.

          6.26 Property not a Dwelling.

          The Grantor represents and warrants to the Grantee that no portion of the Property is used as a dwelling place by the Grantor at the time this Deed to Secure Debt is entered into, and, accordingly, the notice requirements of Official Code of Georgia Annotated Section 44-14-

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162.2 shall not be applicable to any exercise of the power of sale contained in this Deed to Secure Debt.

          6.27 Withdrawal or Discontinuance of Proceedings. In case the Grantee shall have proceeded to enforce any right, power or remedy under this Deed to Secure Debt by foreclosure, entry or otherwise or in the event the Grantee shall have commenced advertising the intended exercise of the right of foreclosure provided hereunder, and such proceeding or advertisement shall have been withdrawn, discontinued or abandoned for any reason, or shall have been determined adversely to the Grantee, then in every such case (a) the Grantor and the Grantee shall be restored to their former positions and rights; (b) all rights, powers and remedies of the Grantee shall continue as if no such proceeding had been taken; (c) each and every Event of Default declared or occurring prior or subsequent to such withdrawal, discontinuance or abandonment shall and shall be deemed to be a continuing Event of Default; and (d) this Deed to Secure Debt, the Secured Debt Agreements, and Obligations secured by this Deed to Secure Debt, or any other instrument concerned therewith, shall not be and shall not be deemed to have been reinstated or otherwise affected by such withdrawal, discontinuance or abandonment, and the Grantor hereby expressly waives the benefit of any statute or rule of law now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the above.

          6.28 Deed to Secure Debt Not a Mortgage. This Deed to Secure Debt is a deed to secure debt passing title to the Property pursuant to the laws of the State of Georgia governing loan or security deeds and is not a mortgage. The words “lien of this Deed to Secure Debt”, “Lien of this Deed to Secure Debt” or words of similar import shall mean the security title and security interest granted in this Deed to Secure Debt.

          6.29 Fees. Any reference in this Deed To Secure Debt to “reasonable attorney’s fees” or other similar phraseology shall mean the actual and reasonable fees incurred at customary and reasonable hourly rates in the Property location, not pursuant to any statutory formula or percentage calculation.

          6.30 Amendment and Restatement. From and After the Fourth Restatement Effective Date, this Deed To Secure Debt amends, restates and supersedes the Original Deed to Secure Debt.

ARTICLE VII
DEFINITIONS

          “Existing Senior Notes” shall mean, collectively, (i) RJRTH’s 6.50% Notes due June 1, 2007 in an initial aggregate principal amount equal to $300,000,000, (ii) RJRTH’s 7.875% Notes due May 15, 2009 in an initial aggregate principal amount equal to $200,000,000, (iii) RJRTH’s 6.50% Notes due July 15, 2010 in an initial aggregate principal amount equal to $300,000,000, (iv) RJRTH’s 7.25% Notes due June 1, 2012 in an initial aggregate principal amount equal to $450,000,000, and (v) RJRTH’s 7.30% Notes due July 15, 2015 in an initial

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aggregate principal amount equal to $200,000,000, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “Existing Senior Notes Creditors” shall mean the Existing Senior Notes Trustee and the holders of the Existing Senior Notes.

          “Existing Senior Notes Documents” shall mean the Existing Senior Notes and the Existing Senior Notes Indenture.

          “Existing Senior Notes Indenture” shall mean, collectively, (i) the indenture, dated as of May 20, 2002, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee and (ii) the indenture, dated as of May 15, 1999, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “Existing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the under the Existing Senior Notes Indenture.

          “Initial New Senior Notes” shall mean, collectively, (i) the Borrower’s 7.25% Senior Secured Notes due 2013 in an initial aggregate principal amount equal to $625,000,000, (ii) the Borrower’s 7.625% Senior Secured Notes due 2016 in an initial aggregate principal amount equal to $775,000,000 and (iii) the Borrower’s 7.75% Senior Secured Notes due 2018 in an initial aggregate principal amount equal to $250,000,000, in each case issued pursuant to the New Senior Notes Indenture, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes” shall mean (i) the Initial New Senior Notes, (ii) the Exchange Senior Notes and (iii) the Additional Senior Notes, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes Creditors” shall mean the New Senior Notes Trustee and the holders of the New Senior Notes.

          “New Senior Notes Documents” shall mean the New Senior Notes and the New Senior Notes Indenture.

          “New Senior Notes Indenture” shall mean the Indenture, dated as of May 31, 2006, among the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes Trustee” shall mean the trustee under the New Senior Notes Indenture.

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          “Refinancing Senior Notes” shall have the meaning provided in the Credit Agreement.

          “Refinancing Senior Notes Creditors” shall mean the Refinancing Senior Notes Trustee and the holders of the Refinancing Senior Notes.

          “Refinancing Senior Notes Documents” shall mean, collectively, the Refinancing Senior Notes and the Refinancing Senior Notes Indenture.

          “Refinancing Senior Notes Indenture” shall mean one or more indentures entered into from time to time providing for the issuance of Refinancing Senior Notes by the Borrower, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the term thereof and the Credit Agreement.

          “Refinancing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the Refinancing Senior Notes Indenture.

          “Secured Creditors” shall mean, collectively, the Lender Secured Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors.

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          IN WITNESS WHEREOF, the Grantor has caused this Deed to Secure Debt to be duly executed and delivered under seal as of the day and year first above written.

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Grantor:
R. J. REYNOLDS TOBACCO COMPANY, a North Carolina corporation (formerly a New Jersey corporation)
By:
	Name:
	Title:
[SEAL]

Signed, sealed and delivered in the presence of:

Unoffical Witness

Notary Republic

[NOTARIAL SEAL]

Commission Expiration Date:

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	Grantee:
	JPMORGAN CHASE BANK, N.A.
By:
	Name:
	Title:
		[SEAL]

Signed, sealed and delivered in the presence of:

Unoffical Witness

Notary Republic

[NOTARIAL SEAL]

Commission Expiration Date:

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EXHIBIT A

DESCRIPTION OF LAND

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SCHEDULE 1

CREDIT AGREEMENT LOANS

The Credit Document Obligations secured by this Deed to Secure Debt are evidenced by the Credit Agreement (including the Grantor’s obligations under the Subsidiary Guaranty), which provides that the Grantor is obligated for the payment and performance of, without limitation, the following: (i) Term Loans in the aggregate principal amount of $1,550,000,000 and having a final maturity date of May 31, 2012; (ii) Revolving Loans in the aggregate principal amount of up to $800,000,000 and having final maturity dates no later than May 31, 2011 (the “Revolving Loan Maturity Date”); (iii) Swingline Loans in the original aggregate principal amount of up to $ 75,000,000, and having a final maturity date no later than five business days prior to the Revolving Loan Maturity Date. The Parent and/or one or more of its Subsidiaries may enter into Interest Rate Protection Agreements and Other Hedging Agreements (together with the Existing Interest Rate Swap Agreement), and the Borrower may also request Letters of Credit in accordance Section 2 of the Credit Agreement.

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EX-10.7

EXHIBIT 10.7

This Mortgage was prepared by,	This document is intended
and when recorded should be returned to:	to be recorded in
	Cherokee County, South Carolina

Leila Rachlin, Esq.
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
(212) 819-8720
1107993-0127

FIRST AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS AND PROFITS,
FINANCING STATEMENT AND FIXTURE FILING

made by

R. J. REYNOLDS TOBACCO COMPANY,
as the Mortgagor,

to

JPMorgan Chase Bank, N.A.,
as Administrative Agent and Collateral Agent for the Secured Creditors,
as the Mortgagee

COLLATERAL IS OR INCLUDES FIXTURES

THIS MORTGAGE CONSTITUTES A FIXTURE FINANCING STATEMENT FILING PURSUANT TO SECTION 36-9-402 OF THE SOUTH CAROLINA CODE OF LAWS

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FIRST AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS AND PROFITS,
FINANCING STATEMENT AND FIXTURE FILING

          THIS FIRST AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS AND PROFITS, FINANCING STATEMENT AND FIXTURE FILING dated as July 30, 2004, and amended and restated as of May 31, 2006 (as so amended and restated and as the same may be further amended, restated, supplemented and/or otherwise modified from time to time, this “Mortgage”) made by R. J. Reynolds Tobacco Company, a North Carolina Corporation (the “Mortgagor”), having an address at 401 North Main Street, Winston-Salem, North Carolina 27102, as the Mortgagor to JPMorgan Chase Bank, N.A. (together with any successor Mortgagee, the “Mortgagee”), having an address at 270 Park Avenue, New York, NY 10017, as Administrative Agent and Collateral Agent for the benefit of the Secured Creditors (as defined below).

          All capitalized terms used but not otherwise defined herein shall have the same meanings ascribed to such terms in the Credit Agreement described below.

W I T N E S S E T H :

          WHEREAS, Reynolds American Inc. (the “Borrower”), the various lending institutions from time to time party thereto (the “Lenders”), the Mortgagee, as Administrative Agent (the “Administrative Agent”), Lehman Commercial Paper Inc. and Citicorp USA, Inc., as Syndication Agents (the “Syndication Agents”), General Electric Capital Corporation and Mizuho Corporate Bank, Ltd., as Documentation Agents (the “Documentation Agents”), Lehman Brothers Inc., J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and General Electric Capital Corporation, as Joint Lead Arrangers and Lehman Brothers Inc., J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as Joint Bookrunners (the “Joint Bookrunners”) have entered into a Credit Agreement, dated as of May 7, 1999, as amended and restated as of November 17, 2000, as further amended and restated as of May 10, 2002, as further amended and restated as of July 30, 2004 and as further amended and restated as of the date hereof, providing for the making of Loans to the Borrower and the issuance of, and participation in, Letters of Credit for the account of the Borrower, in the aggregate principal amount of up to $2,350,000,000 all as contemplated therein (with (i) the Lenders, the Swingline Lender, each Letter of Credit Issuer, the Administrative Agent, the Syndication Agents, the Documentation Agents, the other Agents and the Collateral Agent being herein collectively called the “Lender Creditors” and (ii) the term “Credit Agreement” as used herein to mean the Credit Agreement described above in this paragraph, as the same may be further amended, modified, extended, renewed, replaced, restated, supplemented and/or refinanced from time to time, and including any agreement extending the maturity of, or refinancing or restructuring (including, but not limited to, the inclusion of additional borrowers or guarantors thereunder or any increase in the amount borrowed) all or any portion of, the indebtedness under such agreement or any successor agreement, whether or not with the same agent, trustee, representative lenders or holders; provided that, with respect to any agreement providing for the refinancing or replacement of indebtedness under the Credit Agreement, such agreement shall only be treated as, or as part of, the Credit Agreement hereunder if (x) either (A) all obligations under the Credit Agreement

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being refinanced or replaced shall be paid in full at the time of such refinancing or replacement, and all commitments and letters of credit issued pursuant to the refinanced or replaced Credit Agreement shall have terminated in accordance with their terms or (B) the Required Lenders shall have consented in writing to the refinancing or replacement indebtedness being treated as indebtedness pursuant to the Credit Agreement, and (y) a notice to the effect that the refinancing or replacement indebtedness shall be treated as issued under the Credit Agreement shall be delivered by the Borrower to the Collateral Agent);

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and/or may in the future from time to time enter into, one or more agreements or arrangements with JPMCB or any of its affiliates (even if JPMCB ceases to be a Lender under the Credit Agreement for any reason (JPMCB and any such affiliate and their respective successors and assigns, each, a “Credit Card Issuer”)) providing for credit card loans to be made available to certain employees of the Borrower and/or one or more of its Subsidiaries (each such agreement or arrangement with a Credit Card Issuer, a “Secured Credit Card Agreement”);

          WHEREAS, the Borrower and/or one or more of its Subsidiaries has from time to time entered into, and or may in the future from time to time enter into or guarantee one or more (i) interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements), and/or (ii) foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency or commodity values (each such agreement or arrangement with a Hedging Creditor (as hereinafter defined), together with the Existing Interest Rate Swap Agreement, a “Secured Hedging Agreement”), with any Lender, any affiliate thereof or a syndicate of financial institutions organized by a Lender or an affiliate of a Lender (even if any such Lender ceases to be a Lender under the Credit Agreement for any reason) (any such Lender, affiliate or other such financial institution that participates therein, together with Calyon (as counterparty to the Existing Interest Rate Swap Agreement), and in each case their subsequent successors and assigns, collectively, the “Hedging Creditors”, and together with the Lender Creditors and each Credit Card Issuer, the “Lender Secured Creditors”);

          WHEREAS, R.J. Reynolds Tobacco Holdings, Inc., a Wholly-Owned Subsidiary of the Borrower (“RJRTH”) and the Existing Senior Notes Trustee, on behalf of the holders of the Existing Senior Notes, have entered into the Existing Senior Notes Indenture, providing for the issuance of Existing Senior Notes by RJRTH;

          WHEREAS, the Borrower and the New Senior Notes Trustee, on behalf of the holders of the New Senior Notes, have entered into the New Senior Notes Indenture, providing for the issuance of New Senior Notes by the Borrower;

          WHEREAS, the Borrower and the Refinancing Senior Notes Trustee, on behalf of the holders of the Refinancing Senior Notes, may from time to time enter into the Refinancing Senior Notes Indenture, providing for the issuance from time to time of Refinancing Senior Notes by the Borrower providing for the issuance of Refinancing Senior Notes by the Borrower;

          WHEREAS, the Mortgagor is owner of the fee simple title to the Property (as hereinafter defined), subject to Permitted Liens;

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          WHEREAS, pursuant to the Subsidiary Guaranty, the Mortgagor has (together with the other Subsidiaries of the Borrower party thereto) jointly and severally guaranteed to the Lender Secured Creditors the payment when due of the Guaranteed Obligations (as and to the extent defined in the Subsidiary Guaranty);

          WHEREAS, the Mortgagor has guaranteed to the Existing Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the Existing Senior Notes;

          WHEREAS, the Mortgagor has guaranteed to the New Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the New Senior Notes;

          WHEREAS, the Mortgagor may from time to time guarantee to the Refinancing Senior Notes Creditors the payment when due of principal, premium (if any) and interest on the Refinancing Senior Notes;

          WHEREAS, pursuant to the Credit Agreement, the Mortgagor executed and delivered that certain Mortgage, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing dated as of July 30, 2004, for the benefit of JPMorgan Chase Bank, N.A. as Mortgagee, as Collateral Agent for the Secured Creditors as described therein (the “Original Mortgage”), which was recorded in the Records of the Clerk of Court for Cherokee County, South Carolina (the “Records”) on August 3, 2004 in Mortgage Book 1071 at Page 195.

          WHEREAS, the Credit Agreement requires this Mortgage be executed and delivered to the Mortgagee by the Mortgagor and the Secured Hedging Agreements, the Secured Credit Card Agreements, the Existing Senior Notes Indenture and the New Senior Notes Indenture, require that this Mortgage secure the respective Obligations as provided herein; and

          WHEREAS, the Mortgagor desires to further amend and restate the Original Mortgage to satisfy the condition in the preceding paragraph and to secure (and this Mortgage shall secure) the following:

     (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Mortgagor, now existing or hereafter incurred under, arising out of or in connection with any Credit Document to which the Mortgagor is a party (including, without limitation, indemnities, fees and interest (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)), as described in Schedule I hereto and the due performance of and compliance by the Mortgagor with the terms of each such Credit Document (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or liabilities with respect to Secured Hedging Agreements, being herein collectively called the “Credit Document Obligations”);

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     (ii) in accordance with Section 29-3-50 of the South Carolina Code of Laws (1976), as amended, all future advances and re-advances that may subsequently be made to the Mortgagor under the Credit Agreement and evidenced by the Notes, Loans, commitments or other notes or instruments, and all modifications, renewals, or extensions thereof, the maximum amount of all Credit Document Obligations outstanding at one time secured by this Mortgage not to exceed $7,050,000,000, plus interest thereon attorneys’ fees and court costs:

     (iii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Mortgagor, now existing or hereafter incurred under, arising out of or in connection with each Secured Credit Card Agreement (including, all obligations, if any, of the Mortgagor under the Subsidiary Guaranty in respect of any Secured Credit Card Agreement), and all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding (all such obligations and liabilities under this clause (iii) being herein collectively called the “Credit Card Obligations”);

     (iv) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Mortgagor, now existing or hereafter incurred under, arising out of or in connection with each Secured Hedging Agreement (including, all obligations, if any, of the Mortgagor under the Subsidiary Guaranty in respect of any Secured Hedging Agreement), and all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding (all such obligations and liabilities under this clause (iv) being herein collectively called the “Hedging Obligations”);

     (v) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Mortgagor, now existing or hereinafter incurred under, arising out of or in connection with each Existing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Mortgagor with the terms of each such Existing Senior Notes Document (all such obligations and liabilities under this clause (v) being herein collectively called the “Existing Senior Notes Obligations”);

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     (vi) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Mortgagor, now existing or hereinafter incurred under, arising out of or in connection with each New Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Mortgagor with the terms of each such New Senior Notes Document (all such obligations and liabilities under this clause (vi) being herein collectively called the “New Senior Notes Obligations”);

     (vii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Mortgagor now existing or hereinafter incurred under, arising out of or in connection with each Refinancing Senior Notes Document to which it is a party (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Borrower or any other Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) and the due performance and compliance by the Mortgagor with the terms of each such Refinancing Senior Notes Document (all such obligations and liabilities under this clause (vii) being herein collectively called the “Refinancing Senior Notes Obligations” and together with the New Senior Notes Obligations, the “RAI Senior Notes Obligations”);

     (viii) any and all sums advanced by the Mortgagee in order to preserve the Property or preserve its lien and security interest in the Property;

     (ix) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of the Mortgagor and/or the Borrower referred to above after an Event of Default (as hereinafter defined) shall have occurred and be continuing, all expenses of re-taking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Property, or of any exercise by the Mortgagee of its rights hereunder, together with reasonable attorneys’ fees and disbursements (as set forth in Section 4.09 hereof) and court costs;

(x) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 4.10 hereof;

(xi) any and all other indebtedness now owing or which may hereafter be owing by the Mortgagor to the Mortgagee, however and whenever incurred or evidenced, whether express or implied, direct or indirect, absolute or contingent, or due or to become due; and

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(xii) any and all renewals, extensions and modifications of any of the obligations and liabilities referred to in clauses (i) through (xi) above;

all such obligations, liabilities, sums and expenses set forth in clauses (i) through (xii) above being herein collectively called the “Obligations”, provided that notwithstanding the foregoing, (i) the Existing Senior Notes Obligations shall be excluded from the Obligations, to the extent the Existing Senior Notes Documents do not require the Existing Senior Notes Obligations to be secured pursuant to this Mortgage, (ii) the New Senior Notes Obligations shall be excluded from the Obligations, to the extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured pursuant to this Mortgage and (iii) the Refinancing Senior Notes Obligations shall be excluded from the Obligations, to the extent the Refinancing Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured pursuant to this Mortgage.

          NOW, THEREFORE, as security for its Applicable Obligations (as defined below) and in consideration of the sum of ten dollars ($10.00) and the other benefits accruing to the Mortgagor, the receipt and sufficiency of which are hereby acknowledged, THE MORTGAGOR HEREBY MORTGAGES, GIVES, GRANTS, BARGAINS, SELLS, ASSIGNS, TRANSFERS, CONVEYS AND CONFIRMS TO THE MORTGAGEE AND ITS SUCCESSORS AND ASSIGNS FOREVER FOR THE BENEFIT OF THE SECURED CREDITORS all of the Mortgagor’s estate, right, title and interest, whether now owned or hereafter acquired, whether as lessor or lessee and whether vested or contingent, in and to all of the following:

          A. The land described in Exhibit A hereto, together with all rights, privileges, franchises and powers related thereto which are appurtenant to said land or its ownership, including all minerals, oil and gas and other hydrocarbon substances thereon or therein; waters, water courses, water stock, water rights (whether riparian, appropriative, or otherwise, and whether or not appurtenant), sewer rights, shrubs, crops, trees, timber and other emblements now or hereafter on, under or above the same or any part or parcel thereof (the “Land”);

          B. All buildings, structures, tenant improvements and other improvements of every kind and description now or hereafter located in or on the Land, including, but not limited to all machine shops, structures, improvements, rail spurs, dams, reservoirs, water, sanitary and storm sewers, drainage, electricity, steam, gas, telephone and other utility facilities, parking areas, roads, driveways, walks and other site improvements of every kind and description now or hereafter erected or placed on the Land; and all additions and betterments thereto and all renewals, alterations, substitutions and replacements thereof (collectively, the “Improvements”);

          C. All fixtures, attachments, appliances, equipment, machinery, building materials and supplies, and other tangible personal property, now or hereafter attached to said Improvements or now or at any time hereafter located on the Land and/or Improvements including, but not limited to, artwork, decorations, draperies, furnaces, boilers, oil burners, piping, plumbing, refrigeration, air conditioning, lighting, ventilation, disposal and sprinkler systems, elevators, motors, dynamos and all other equipment and machinery, appliances, fittings and fixtures of every kind located in or used in the operation of the Improvements, together with any and all replacements or substitutions thereof and additions thereto, including the proceeds of any

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sale or transfer of the foregoing (hereinafter sometimes collectively referred to as the “Equipment”);

          D. All surface rights, appurtenant rights and easements, rights of way, and other rights appurtenant to the use and enjoyment of or used in connection with the Land and/or the Improvements;

          E. All streets, roads and public places (whether open or proposed) now or hereafter adjoining or otherwise providing access to the Land, the land lying in the bed of such streets, roads and public places, and all other sidewalks, alleys, ways, passages, vaults, water courses, strips and gores of land now or hereafter adjoining or used or intended to be used in connection with all or any part of the Land and/or the Improvements;

          F. Any leases, lease guaranties and any other agreements, relating to the use and occupancy of the Land and/or the Improvements or any portion thereof, including but not limited to any use or occupancy arrangements created pursuant to Section 365(h) of he Bankruptcy Code or otherwise in connection with the commencement or continuance of any bankruptcy, reorganization, arrangement, insolvency, dissolution, receivership or similar proceedings, or any assignment for the benefit of creditors, in respect of any tenant or occupant of any portion of the Land and/or the Improvements (collectively, “Leases”);

          G. All revenues, rents, receipts, income, accounts receivable, issues and profits of the Property (collectively, “Rents”);

          H. To the extent assignable, all permits, licenses and rights relating to the use, occupation and operation of the Land and the Improvements, any business conducted thereon or therein and any part thereof;

          I. All real estate tax refunds payable to the Mortgagor with respect to the Land and/or the Improvements, and refunds, credits or reimbursements payable with respect to bonds, escrow accounts or other sums payable in connection with the use, development, or ownership of the Land or Improvements;

          J. Any claims or demands with respect to any proceeds of insurance in effect with respect to the Land and/or the Improvements, including interest thereon, which the Mortgagor now has or may hereafter acquire and any and all awards made for the taking by eminent domain, condemnation or by any proceedings, transfer or purchase in lieu or in anticipation of the exercise of said rights, or for a change of grade, or for any other injury to or decrease in the value of the whole or any part of the Property;

          K. Any zoning lot agreements and air rights and development rights which may be vested in the Mortgagor together with any additional air rights or development rights which have been or may hereafter be conveyed to or become vested in the Mortgagor; and

          L. All proceeds and products of the conversion, voluntary or involuntary, including, without limitation, those from sale, exchange, transfer, collection, loss, damage,

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disposition, substitution or replacement of any of the foregoing; whether into cash, liquidated claims or otherwise.

All of the foregoing estates, right, properties and interests hereby conveyed to the Mortgagee may be referred to herein as the “Property”. Notwithstanding the foregoing, (x) the Property that secures the Existing Senior Notes Obligations shall be limited to Property consisting of any Principal Property (as defined in the Existing Senior Notes Indenture (in each case as in effect on the date hereof)) of the Mortgagor (the “Designated Existing Senior Notes Trust Property”), all of which Property shall also ratably secure all other Applicable Obligations of the Mortgagor, and the Trust Property Proceeds (as defined in Section 4.04(a)) that are to be applied to the Existing Senior Notes Obligations shall be limited to Trust Property Proceeds resulting from the sale of, and Rents and other amounts generated by the holding, leasing, management, operation or other use pursuant to this Mortgage of, the Designated Existing Senior Notes Trust Property, with such Trust Property Proceeds to also be applied ratably to all other Applicable Obligations of the Mortgagor and (y) the Property that secures the RAI Senior Notes Obligations shall be limited to Property consisting of any Principal Property (as defined in the New Senior Notes Indenture Notes Indenture (in each case as in effect on the date hereof) or the Refinancing Senior Notes Indenture) of the Mortgagor (the “Designated RAI Senior Notes Trust Property”, and together with the Designated Existing Senior Notes Trust Property, the “Limited Trust Property”), all of which Property shall also ratably secure all other Applicable Obligations of the Mortgagor, and the Trust Property Proceeds (as defined in Section 4.04(a)) that are to be applied to the RAI Senior Notes Obligations shall be limited to Trust Property Proceeds resulting from the sale of, and Rents and other amounts generated by the holding, leasing, management, operation or other use pursuant to this Mortgage of, the Designated RAI Senior Notes Trust Property, with such Trust Property Proceeds to also be applied ratably to all other Applicable Obligations of the Mortgagor.

“Applicable Obligations” shall mean all of the Obligations; provided that (x) the Existing Senior Notes Obligations shall be excluded from the Applicable Obligations of the Mortgagor to the extent the Existing Senior Notes Documents do not require the Existing Senior Notes Obligations to be secured pursuant to this Mortgage, (y) the New Senior Notes Obligations shall be excluded from the Applicable Obligations of the Mortgagor to the extent the New Senior Notes Documents do not require the New Senior Notes Obligations to be secured pursuant to this Mortgage, and (z) the Refinancing Senior Notes Obligations shall be excluded from the Applicable Obligations of the Mortgagor to the extent the Refinancing Senior Notes Documents do not require the Refinancing Senior Notes Obligations to be secured pursuant to this Agreement.

          TO HAVE AND TO HOLD the above granted and described Property unto the Mortgagee and to its successors and assigns forever, and the Mortgagor hereby covenants and agrees on behalf of itself and its successors and assigns to warrant and defend the Property unto the Mortgagee, its successors and assigns against the claim or claims of all persons and parties whatsoever.

          PROVIDED, HOWEVER, that if Obligations shall have been paid in cash at the time and in the manner stipulated in the Secured Debt Agreements and all other sums payable hereunder and all other indebtedness secured hereby shall have been paid and all other covenants

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contained in the Secured Debt Agreements (as defined below) shall have been performed, then, in such case the Mortgagee shall, subject to the provisions of Section 6.19 of this Mortgage, at the request and expense of the Mortgagor, satisfy this Mortgage (without recourse and without any representation or warranty) and the estate, right, title and interest of the Mortgagee in the Property shall cease, and upon payment to the Mortgagee of all reasonable costs and expenses incurred for the preparation of the release hereinafter referenced and all recording costs if allowed by law, the Mortgagee shall cancel and surrender the estate and interest created by this Mortgage.

ARTICLE I

REPRESENTATIONS, WARRANTIES, COVENANTS

          1.01 Title to this Property. The Mortgagor represents and warrants: (a) it has good and marketable fee title to the Property, free and clear of any liens and encumbrances, other than Liens permitted under Section 8.03 of the Credit Agreement (or, after the CA Termination Date (as defined below), the Credit Agreement as in effect immediately prior to the occurrence of the CA Termination Date) and any other easements, rights and claims of record (collectively “Permitted Liens”), and is lawfully seized and possessed of the Property; (b) this Mortgage is a valid first priority security interest and lien upon the Property subject to the Permitted Liens; (c) it has full power and authority to encumber the Property in the manner set forth herein; and (d) there are no defenses or offsets to this Mortgage or to the Obligations which it secures. The Mortgagor shall preserve such title and the validity and priority of this Mortgage and shall forever warrant and defend the same to the Mortgagee and the Mortgagee’s successors and assigns against the claims of all persons and parties whatsoever. The Mortgagor shall take no action nor shall it fail to take any action which could result in an impairment of the lien of this Mortgage or which could form the basis for any Person(s) to claim an interest in the Property (including, without limitation, any claim for adverse use or possession or any implied dedication or easement by prescription other than leases permitted under the Credit Agreement). If any Lien (other than Permitted Liens) is asserted against the Property, the Mortgagor shall promptly, at its expense: (a) provide the Mortgagee with written notice of such Lien, including information relating to the amount of the Lien asserted; and (b) pay the Lien in full or take such other action to cause the Lien to be released, or, so long as the Lien of this Mortgage is not compromised, contest the same pursuant to the provisions of the Credit Agreement. From and after the occurrence of an Event of Default, the Mortgagee may, but shall not be obligated, to pay any such asserted Lien if not timely paid by the Mortgagor.

          1.02 Compliance with Law. The Mortgagor represents and warrants that it possesses all material certificates, licenses, authorizations, registrations, permits and/or approvals necessary for the ownership, operation, leasing and management of the Property, including, without limitation, all material environmental permits, all of which are in full force and effect and not the subject of any revocation proceeding, undisclosed amendment, release, suspension, forfeiture or the like. The present and contemplated use and occupancy of the Property does not conflict with or violate any such certificate, license, authorization, registration, permit or approval, including, without limitation, any certificate of occupancy which may have been issued for the Property. The Mortgagor will not take any action, or fail to take any required action, so as to compromise or adversely affect the zoning classification of the Property.

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          1.03 Payment and Performance of Obligations. Subject to the terms of the Secured Debt Agreements, the Mortgagor shall pay all of the Obligations when due and payable without offset or counterclaim, and shall observe and comply in all material respects with all of the terms, provisions, conditions, covenants and agreements to be observed and performed by it under this Mortgage, the other Credit Documents to which it is a party, the Secured Credit Card Agreements, the Secured Hedging Agreements, the Existing Senior Notes Documents, the New Senior Notes Documents and the Refinancing Senior Notes Documents (collectively, the “Secured Debt Agreements”).

          1.04 Maintenance, Repair, Alterations, Etc. The Mortgagor will: (i) keep and maintain the Property, to the extent used in Mortgagor’s day to day business, in good condition and repair (normal wear and tear excepted); (ii) make or cause to be made, as and when necessary, all material repairs, renewals and replacements, structural and nonstructural, exterior and interior, ordinary and extraordinary, foreseen and unforeseen which are necessary to so maintain the Property in Mortgagor’s reasonable business judgment; (iii) restore any Improvement, to the extent used in Mortgagor’s day to day business, which may be damaged or destroyed so that the same shall be at least substantially equal to its value, condition and character immediately prior to the damage or destruction; (iv) not commit or permit any waste or deterioration (normal wear and tear excepted) of the Property, to the extent used in Mortgagor’s day to day business; (v) not permit any material Improvements, to the extent used in Mortgagor’s day to day business, to be demolished or substantially altered in any manner that substantially decreases the value thereof; (vi) promptly pay when due all claims for labor performed and materials furnished therefor or contest such claim and; (vii) comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental authorities having jurisdiction over the Property, as well as comply with the provisions of any lease, easement or other agreement affecting all or any part of the Property.

          1.05 Required Insurance; Use of Proceeds. The Mortgagor will, at its expense, at all times provide, maintain and keep in force policies of property, hazard and liability insurance in accordance with Section 7.03 of the Credit Agreement with respect to the Property, together with statutory workers’ compensation insurance with respect to any work to be performed on or about the Property. To the extent required under the Credit Agreement, the Mortgagor shall give prompt written notice to the Mortgagee of the occurrence of any material damage to or material destruction of the Improvements or the Equipment. In the event of any damage to or destruction of the Property or any part thereof, so long as a Noticed Event of Default (as defined in Section 3.03(a) hereof) has not occurred and is not continuing the Mortgagee will release any interest they have in the proceeds of any insurance to the Mortgagor on account of such damage or destruction and Mortgagor may use such proceeds for repair restoration replacement or other business purposes as Mortgagor may reasonably determine. In the event of foreclosure of the lien and interest of this Mortgage or other transfer of title or assignment of the Property in extinguishment, in whole or in part, of the Obligations, all right, title and interest of the Mortgagor in and to all proceeds then payable under any policy of insurance required by this Mortgage shall inure to the benefit of and pass to the successor in interest of the Mortgagor, or the purchaser or mortgagor of the Property. After the occurrence of an Event of Default, the Mortgagee shall be afforded the right to participate in and approve the settlement of any claim made by the Mortgagor against the insurance company.

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          1.06 Preservation of Property. The Mortgagor agrees to pay for any and all reasonable and actual fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Mortgagee’s liens on, and security interest in, the Property, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices (including stamp and mortgage or intangible recording taxes or other taxes imposed on the Mortgagee by virtue of its ownership of this Mortgage), which are imposed upon the recording of this Mortgage or thereafter, all reasonable attorneys’ fees, payment or discharge of any taxes or Liens upon or in respect of the Property, premiums for insurance with respect to the Property and all other reasonable fees, costs and expenses in connection with protecting, maintaining or preserving the Property and the Mortgagee’s interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Property.

          1.07 Condemnation. Should the Mortgagor receive any notice that a material portion of the Property or interest therein may be taken or damaged by reason of any public improvements or condemnation proceeding or in any other similar manner (a “Condemnation”), the Mortgagor, to the extent required under the Credit Agreement, shall give prompt written notice thereof to the Mortgagee. In the event of any Condemnation, after the occurrence and during the continuation of any Event of Default, the Mortgagee shall have the right to participate in any negotiations or litigation and shall have the right to approve any settlement. So long as no Noticed Event of Default has occurred and is continuing, the Mortgagee will release any interest they have in any and all compensation, awards, damages and proceeds paid to the Mortgagor or the Borrower on account of such Condemnation and Mortgagor may use such compensation awards, damages and proceeds for repair, restoration, replacement or other business purposes as Mortgagor may reasonably determine.

          1.08 Inspections. The Mortgagor hereby authorizes the Mortgagee, its agents, employees and representatives, upon reasonable prior written notice to the Mortgagor (except in an emergency or following the occurrence and during the continuance of any Event of Default, in which case notice shall not be required) to visit and inspect the Property or any portion(s) thereof, all at such reasonable times and as often as the Mortgagee may reasonably request.

          1.09 Transfers. Except as otherwise permitted in accordance with the terms of the Credit Agreement, no part of the Property or of any legal or beneficial interest in the Property shall be sold, assigned, conveyed, transferred or otherwise disposed of (whether voluntarily or involuntarily, directly or indirectly, by sale of stock or any interest in the Mortgagor, or by operation of law or otherwise).

          1.10 After Acquired Property Interests. Subject to applicable law, all right, title and interest of the Mortgagor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to, the Property, hereafter acquired by, or released to, the Mortgagor or constructed, assembled or placed by the Mortgagor on the Land, and all conversions of the security constituted thereby (collectively, “After Acquired Property Interests”), immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further mortgage, conveyance, assignment or other act by the Mortgagor, shall become subject to the lien of this Mortgage as fully and completely, and with the same effect, as though now

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owned by the Mortgagor and specifically described in the granting clauses hereof. The Mortgagor shall execute and deliver to the Mortgagee all such other assurances, mortgages, conveyances or assignments thereof as the Mortgagee may reasonably require for the purpose of expressly and specifically subjecting such After Acquired Property Interests to the lien of this Mortgage. The Mortgagor hereby irrevocably authorizes and appoints the Mortgagee as the agent and attorney-in-fact of the Mortgagor to execute all such documents and instruments on behalf of the Mortgagor, which appointment shall be irrevocable and coupled with an interest, if the Mortgagor fails or refuses to do so within ten (10) days after a request therefor by the Mortgagee.

ARTICLE II

SECURITY AGREEMENT

          2.01 Grant of Security; Incorporation by Reference. This Mortgage shall, in addition to constituting a mortgage lien on and security interest in those portions of the Property classified as real property (including fixtures to the extent they are real property), constitute a security agreement within the meaning of the Uniform Commercial Code or within the meaning of the common law with respect to those parts of the Property classified as personal property (including fixtures to the extent they are personal property) to the extent a security interest therein can be created by this Mortgage. The Mortgagor hereby grants to the Mortgagee a security interest in and to the following property whether now owned or hereafter acquired (collectively, the “Secured Property”) for the benefit of the Mortgagee to further secure the payment and performance of its Applicable Obligations:

     (a) Those parts of the Property classified as personal property (including (i) fixtures to the extent they are personal property and (ii) personal property and fixtures that are leased, but only to the extent the Mortgagor can grant to the Mortgagee a security interest therein without breaching the terms of such lease);

     (b) All general intangibles, contract rights, accounts and proceeds arising from all insurance policies required to be maintained by the Mortgagor and related to the Property hereunder;

     (c) All proceeds of any judgment, award or settlement in any condemnation or eminent domain proceeding in connection with the Property, together with all general intangibles, contract rights and accounts arising therefrom;

     (d) All permits, consents and other governmental approvals in connection with the construction of the Improvements or the operation of the Property, to the extent any of the same may be assigned, transferred, pledged or subjected to a security interest;

     (e) All plans and specifications, studies, tests or design materials relating to the design, construction, repair, alteration or leasing of the Property, to the extent any of the same may be assigned, transferred, pledged or subjected to a security interest; and

     (f) All cash and non-cash proceeds of the above-mentioned items.

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; provided that notwithstanding the foregoing, Secured Property securing Existing Senior Notes Obligations and RAI Senior Notes Obligations shall be limited to Limited Property, as the case may be.

          The provisions contained in the Security Agreement are hereby incorporated by reference into this Mortgage with the same effect as if set forth in full herein. In the event of a conflict between the provisions of this Article II and the Security Agreement, the Security Agreement shall control and govern and the Mortgagor shall comply therewith.

          2.02 Fixture Filing and Financing Statements. This Mortgage constitutes a security agreement, fixture filing and financing statement as those terms are used in the Uniform Commercial Code. For purposes of this Section, this Mortgage is to be filed and recorded in, among other places, the real estate records of Cherokee County and the following information is included: (1) the Mortgagor shall be deemed the “Debtor” with the address set forth for the Mortgagor on the first page of this Mortgage which the Mortgagor certifies is accurate; (2) the Mortgagee shall be deemed to be the “Secured Party” with the address set forth for the Mortgagee on the first page of this Mortgage and shall have all of the rights of a secured party under the Uniform Commercial Code; (3) this Mortgage covers goods which are or are to become fixtures on the real property described in Exhibit A attached hereto; (4) the name of the record owner of the land is the Debtor; (5) the organizational identification number of the Debtor is NC0711678; (6) the Debtor is a corporation, organized under the laws of the State of North Carolina; and (7) the legal name of the Debtor is R. J. Reynolds Tobacco Company. The Debtor hereby authorizes the Mortgagee to file any financing statements and terminations thereof or amendments or modifications thereto without the signature of the Debtor where permitted by law.

ARTICLE III

ASSIGNMENT OF LEASES, RENTS AND PROFITS

          3.01 Assignment. The Mortgagor hereby absolutely, irrevocably and unconditionally sells, assigns, transfers and conveys to the Mortgagee all of the Mortgagor’s right, title and interest in and to all current and future Leases and Rents, including those now due, past due, or to become due by virtue of any Lease or other agreement for the occupancy or use of all or any part of the Property regardless of to whom the Rents are payable. The Mortgagor intends that this assignment of Leases and Rents constitutes a present and absolute assignment and not an assignment for additional security only. Such assignment to the Mortgagee shall not be construed to bind the Mortgagee to the performance of any of the covenants, conditions or provisions contained in any such Lease or otherwise impose any obligation upon the Mortgagee. The Mortgagor covenants that the Mortgagor will not hereafter collect or accept payment of any Rents more than one month prior to the due dates of such Rents, and that no payment of any of the Rents to accrue for any portion of the Property (other than a de minimis amount) will be waived, released, reduced, discounted or otherwise discharged or compromised by the Mortgagor, except as may be approved in writing by the Mortgagee. The Mortgagor agrees that it will not assign any of the Leases or Rents to any other Person. The Mortgagee shall have no liability for any loss which may arise from a failure or inability to collect Rents, proceeds or

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other payments. The Mortgagor shall maintain all security deposits in accordance with applicable law.

          3.02 Revocable License; Agent. Notwithstanding the foregoing, subject to the terms of this Article III, the Mortgagee grants to the Mortgagor a revocable license to operate and manage the Property and to collect the Rents and hereby directs each tenant under a Lease to pay such Rents to, or at the direction of, the Mortgagor, until such time as the Mortgagee provides notice to the contrary to such tenants. The Mortgagor shall hold the Rents, or a portion thereof sufficient to discharge all current sums due in respect of the Obligations, in trust for the benefit of the Mortgagee for use in the payment of such sums.

          3.03 Rents. (a) Upon the occurrence and during the continuance of a Noticed Event of Default, without the need for notice or demand, the license granted pursuant to this Article III shall immediately and automatically be revoked and the Mortgagee shall immediately be entitled to possession of all Rents, whether or not the Mortgagee enters upon or takes control of the Property. Upon the revocation of such license, the Mortgagor grants to the Mortgagee the right, at its option, to exercise all the rights granted in Section 4.02(a). Nothing herein contained shall be construed as constituting the Mortgagee a lender in possession in the absence of the taking of actual possession of the Property by the Mortgagee pursuant to Section 4.02(a). As used herein, a “Noticed Event of Default” shall mean (i) an Event of Default with respect to the Borrower under Section 9.05 of the Credit Agreement and (ii) any other Event of Default in respect of which the Mortgagee has given the Borrower notice that such Event of Default constitutes a “Noticed Event of Default”.

          (b) From and after the termination of such license, the Mortgagor may, at the Mortgagee’s direction, be the agent for the Mortgagee in collection of the Rents and all of the Rents so collected by the Mortgagor shall be held in trust by the Mortgagor for the sole and exclusive benefit of the Mortgagee and the Mortgagor shall, within one (1) business day after receipt of any Rents, pay the same to the Mortgagee to be applied by the Mortgagee as provided for herein. All Rents collected shall be applied against all expenses of collection, including, without limitation, attorneys’ fees, against costs of operation and management of the Property and against the Obligations, in whatever order or priority as to any of the items so mentioned as the Mortgagee directs in its sole and absolute discretion and without regard to the adequacy of its security. Neither the demand for or collection of Rents by the Mortgagee shall constitute any assumption by the Mortgagee of any obligations under any Lease or agreement relating thereto.

          (c) Any reasonable funds expended by the Mortgagee to take control of and manage the Property and collect the Rents shall become part of the Obligations secured hereby. Such amounts shall be payable from the Mortgagor to the Mortgagee upon the Mortgagee’s demand therefor and shall bear interest from the date of disbursement at the interest rate set forth in Section 1.08(c) of the Credit Agreement unless payment of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from the Mortgagor under applicable law.

          3.04 Sale of Property. (a) Upon any sale of any portion of the Property by or for the benefit of the Mortgagee pursuant to this Mortgage, the Rents attributable to the part of the

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Property so sold shall be included in such sale and shall pass to the purchaser free and clear of any rights granted herein to the Mortgagor.

          (b) The Mortgagor acknowledges and agrees that, upon recordation of this Mortgage, the Mortgagee’s interest in the Rents shall be deemed to be fully perfected, “choate” and enforceable against the Mortgagor and all third parties, including, without limitation, any debtor in possession or trustee in any case under title 11 of the United States Code, without the necessity of (i) commencing a foreclosure action with respect to this Mortgage, (ii) furnishing notice to the Mortgagor or tenants under the Leases, (iii) making formal demand for the Rents, (iv) taking possession of the Property as a lender-in-possession, (v) obtaining the appointment of a receiver of the Rents, (vi) sequestering or impounding the Rents or (vii) taking any other affirmative action.

          3.05 Bankruptcy Provisions. Without limiting the provisions of Article III hereof or the absolute nature of the assignment of the Rents hereunder, the Mortgagor and the Mortgagee agree that, to the extent that the assignment of the Rents hereunder is deemed to be other than an absolute assignment, (a) this Mortgage shall constitute a “security agreement” for purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest created by this Mortgage extends to property of the Mortgagor acquired before the commencement of a bankruptcy case and to all amounts paid as Rents and (c) such security interest shall extend to all Rents acquired by the estate after the commencement of any bankruptcy case. Without limitation of the absolute nature of the assignment of the Rents hereunder, to the extent the Mortgagor (or the Mortgagor’s bankruptcy estate) shall be deemed to hold any interest in the Rents after the commencement of a voluntary or involuntary bankruptcy case, the Mortgagor hereby acknowledges and agrees that such Rents are and shall be deemed to be “cash collateral” under Section 363 of the Bankruptcy Code.

ARTICLE IV

EVENTS OF DEFAULT AND REMEDIES

          4.01 Events of Default. The occurrence of (i) an “Event of Default” under and as defined in the Credit Agreement, (ii) any “event of default” under the Existing Senior Notes Documents, the New Senior Notes Documents or the Refinancing Senior Notes Documents and (iii) any payment default, after any applicable grace period, under any Secured Credit Card Agreement or any Secured Hedging Agreement shall constitute an Event of Default (each, an “Event of Default”) hereunder.

     4.02 Remedies Upon Default. Upon the occurrence of a Noticed Event of Default, the Mortgagee may, in the Mortgagee’s sole discretion, either itself or by or through one or more trustees, agents, nominees, assignees or otherwise, to the fullest extent permitted by law, exercise any or all of the following rights and remedies individually, collectively or cumulatively:

     (a) either in person or by its agent, with or without bringing any action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, (i) enter upon and take possession of the Property or any part thereof and of

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all books, records and accounts relating thereto or located thereon, in its own name or in the name of the Mortgagor, and do or cause to be done any acts which it deems necessary or desirable to preserve the value of the Property or any part thereof or interest therein, collect the income therefrom or protect the security hereof; (ii) with or without taking possession of the Property make such repairs, alterations, additions and improvements as the Mortgagee deems necessary or desirable and do any and all acts and perform any and all work which the Mortgagee deems necessary or desirable to complete any unfinished construction on the Property; (iii) make, cancel or modify Leases and sue for or otherwise collect the Rents thereof, including those past due and unpaid; (iv) make any payment or perform any act which the Mortgagor has failed to make or perform hereunder; (v) appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of the Mortgagee; (vi) pay, purchase, contest or compromise any encumbrance, charge or Lien on the Property; and (vii) take such other actions as the Mortgagee deems necessary or desirable;

     (b) commence and maintain one or more actions at law or in equity or by any other appropriate remedy (i) to protect and enforce the rights of the Mortgagee hereunder, including for the specific performance of any covenant or agreement herein contained (which covenants and agreements the Mortgagor agrees shall be specifically enforceable by injunctive or other appropriate equitable remedy), (ii) to collect any sum then due hereunder, (iii) to aid in the execution of any power herein granted, or (iv) to foreclose this Mortgage in accordance with Section 4.03 hereof;

     (c) exercise any or all of the remedies available to a secured party under the Uniform Commercial Code;

     (d) by notice to the Mortgagor (to the extent such notice is required to be given under the Credit Documents), but without formal demand, presentment, notice of intention to accelerate or of acceleration, protest or notice of protest, all of which are hereby waived by the Mortgagor, declare all of the Obligations (except for the Existing Senior Notes Obligations and the RAI Senior Notes Obligations) secured hereby to be immediately due and payable, and upon such declaration all of such indebtedness shall become and be immediately due and payable, anything in this Mortgage or any other Credit Documents to the contrary notwithstanding; and

     (e) exercise any other right or remedy available to the Mortgagee under the Secured Debt Agreements.

          4.03 Right of Foreclosure. (a) Upon the occurrence of a Noticed Event of Default, the Mortgagee shall have the right, in its sole discretion, to proceed at law or in equity to foreclose this Mortgage with respect to all or any portion of the Property by judicial sale under the judgment of a Court of competent jurisdiction, in accordance with the applicable laws of jurisdiction in which the Property is located. If the Property consists of several lots, parcels or items of Property, the Mortgagee may, in its sole discretion: (i) designate the order in which such lots, parcels or items shall be offered for sale or sold, or (ii) elect to sell such lots, parcels or items through a single sale, or through two or more successive sales, or in any other manner the Mortgagee deems in its best interest. Should the Mortgagee desire that more than one sale or

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other disposition of the Property be conducted, the Mortgagee may, at its option, cause the same to be conducted simultaneously, or successively, on the same day, or at such different days or times and in such order as the Mortgagee may deem to be in its best interests, and no such sale shall terminate or otherwise affect the lien of this Mortgage on any part of the Property not sold until all Obligations have been fully paid and performed. The Mortgagee may elect to sell the Property for cash or credit. The Mortgagee may, to the extent permitted by law, adjourn from time to time any sale by it to be made under or by virtue of this Mortgage by announcement at the time and place appointed for such sale or for such adjourned sale or sales; and, except as otherwise provided by an applicable provision of law, the Mortgagee may make such sale at the time and place to which the same shall be so adjourned. With respect to all components of the Property and to the extent allowed by applicable law, the Mortgagee is hereby irrevocably appointed the true and lawful attorney-in-fact of the Mortgagor (coupled with an interest), in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Property in connection with any foreclosure of this Mortgage, and for that purpose the Mortgagee may execute all necessary instruments of conveyance, assignment, transfer and delivery, and may substitute one or more persons with such power, the Mortgagor hereby ratifying and confirming all that its said attorney-in-fact or such substitute or substitutes shall lawfully do by virtue hereof. Notwithstanding the foregoing, the Mortgagor, if so requested by the Mortgagee, shall ratify and confirm any such sale or sales by executing and delivering to the Mortgagee or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of the Mortgagee, for such purpose, and as may be designated in such request. To the extent permitted by law, any such sale or sales made under or by virtue of this Article IV shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of the Mortgagor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against the Mortgagor and against any and all persons claiming or who may claim the same, or any part thereof, from, through or under the Mortgagor. Upon any sale made under or by virtue of this Article IV, the Mortgagee may, to the extent permitted by law, bid for and acquire the Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the Obligations secured hereby the net sales price after deducting therefrom the expenses of the sale and the cost of the action and any other sums which the Mortgagee is authorized to deduct by law or under this Mortgage.

          (b) Any foreclosure of this Mortgage and any other transfer of all or any part of the Property in extinguishment of all or any part of the Obligations may, at the Mortgagee’s option, be subject to any or all Leases of all or any part of the Property and the rights of tenants under such Leases. No failure to make any such tenant a defendant in any foreclosure proceedings or to foreclose or otherwise terminate any such Lease and the rights of any such tenant in connection with any such foreclosure or transfer shall be, or be asserted to be, a defense or hindrance to any such foreclosure or transfer or to any proceedings seeking collection of all or any part of the Obligations (including, without limitation, any deficiency remaining unpaid after completion of any such foreclosure or transfer).

          (c) If the Mortgagor retains possession of the Property or any part thereof subsequent to a sale, the Mortgagor will be considered a tenant at sufferance of the purchaser, and will, if the Mortgagor remains in possession after demand to remove, be guilty of forcible detainer and will be subject to eviction and removal, forcible or otherwise, with or without

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process of law, and all damages to the Mortgagor by reason thereof are hereby expressly waived by the Mortgagor.

          (d) It is agreed and understood that (x) this Mortgage may be enforced only by the action of the Mortgagee acting upon the instructions of the Required Lenders or, if the CA Termination Date has occurred, the holders of a majority of the outstanding principal amount of all remaining Obligations, provided that if prior to the CA Termination Date a payment default with respect to at least $300,000,000 principal amount in the aggregate of Existing Senior Notes, New Senior Notes and/or Refinancing Senior Notes has continued for at least 180 days (and such defaulted payment has not been received pursuant to a drawing under any letter of credit), the holders of a majority of the outstanding principal amount of the Indebtedness subject to such payment default or defaults can direct the Mortgagee to commence and continue enforcement of the Liens created hereunder, which the Mortgagee shall comply with subject to receiving any indemnity which it reasonably requests, provided further, that the Mortgagee shall thereafter comply only with the directions of the Required Lenders as to carrying out such enforcement so long as such directions are not adverse to the aforesaid directions of the holders of Indebtedness subject to such payment default or defaults, and (y) no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Mortgage or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies shall be exercised exclusively by the Mortgagee for the benefit of the Secured Creditors as their interest may appear upon the terms of this Mortgage and the other Secured Debt Agreements.

          4.04 Application of Proceeds. (a) To the fullest extent permitted by law, the proceeds of any sale of, and the Rents and other amounts generated by the holding, leasing, management, operation or other use of, each item of the Property pursuant to this Mortgage (the “Trust Property Proceeds”) shall be applied by the Mortgagee (or the receiver, if one is appointed) as follows:

     (i) first, to the payment of all Obligations owing to the Mortgagee of the type described in clauses (viii), (ix), (x), (xi) and (xii) of the definition of Obligations herein;

     (ii) second, to the extent Trust Property Proceeds of Property remain after the application pursuant to preceding clause (i), an amount equal to the outstanding Applicable Obligations secured by such item of Property shall be paid to the Secured Creditors as their interests may appear, with (x) each Secured Creditor receiving an amount equal to its outstanding Applicable Obligations secured by such item of Property or, if the proceeds are insufficient to pay in full all such Applicable Obligations, its Pro Rata Share of the amount so remaining to be distributed and (y) in the case of the Credit Document Obligations, the Existing Senior Notes Obligations, the New Senior Notes Obligations and the Refinancing Senior Notes Obligations included in such Applicable Obligations, any such amount to be applied (1) first to the payment of interest in respect of the unpaid principal amount of Loans, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, as the case may be, (2) second to the payment of principal of Loans, Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, as the case may be, and (3) third to the other Credit Document Obligations, Existing Senior Notes

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Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be; and

(iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii) to the Mortgagor or, to the extent directed by the Mortgagor or a court of competent jurisdiction, to whomever may be lawfully entitled to receive such surplus.

          (b) For purposes of this Agreement, “Pro Rata Share” shall mean when calculating a Secured Creditor’s portion of any distribution or amount pursuant to clause (a) above, the amount (expressed as a percentage) equal to a fraction the numerator of which is the then outstanding amount of the relevant Applicable Obligations secured by the relevant item of Property owed such Secured Creditor and the denominator of which is the then outstanding amount of all relevant Applicable Obligations secured by the relevant item of Property.

          (c) All payments required to be made to the (i) Lender Creditors hereunder shall be made to the Administrative Agent for the account of the respective Lender Creditors, (ii) Credit Card Issuers hereunder shall be made to the Credit Card Issuer(s) under the applicable Secured Credit Card Agreement, (iii) Hedging Creditors hereunder shall be made to the paying agent under the applicable Secured Hedging Agreement or, in the case of Secured Hedging Agreements without a paying agent, directly to the applicable Hedging Creditors, (iv) Existing Senior Notes Creditors hereunder shall be made to the Existing Senior Notes Trustee for the account of the respective Existing Senior Notes Creditors, (v) New Senior Notes Creditors hereunder shall be made to the New Senior Notes Trustee for the account of the respective New Senior Notes Creditors and (vi) Refinancing Senior Notes Creditors hereunder shall be made to the Refinancing Senior Notes Trustee for the account of the respective Refinancing Senior Notes Creditors.

          (d) For purposes of applying payments received in accordance with this Section 4.04, the Mortgagee shall be entitled to rely upon (i) the Administrative Agent for a determination of the outstanding Credit Document Obligations, (ii) any Credit Card Issuer for a determination of the outstanding Credit Card Obligations owed to such Credit Card Issuer, (iii) upon any Hedging Creditor for a determination of the outstanding Hedging Obligations owed to such Hedging Creditor, (iv) the Existing Senior Notes Trustee for a determination of the outstanding Existing Senior Notes Obligations, (v) the New Senior Notes Trustee for a determination of the outstanding New Senior Notes Obligations and (vi) the Refinancing Senior Notes Trustee for a determination of the outstanding Refinancing Senior Notes Obligations. Unless it has actual knowledge (including by way of written notice from a Secured Creditor) to the contrary, the Administrative Agent under the Credit Agreement, in furnishing information pursuant to the preceding sentence, and the Mortgagee, in acting hereunder, shall be entitled to assume that no Credit Document Obligations other than principal, interest and regularly accruing fees are owing to any Lender Creditor.

          (e) It is understood and agreed that the Mortgagor shall remain liable to the extent of any deficiency between (x) the amount of the Obligations for which it is responsible directly or as a guarantor that are satisfied with proceeds of the Property and (y) the aggregate outstanding amount of such Obligations.

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          4.05 Appointment of Receiver. Upon the occurrence and during the continuance of a Noticed Event of Default, the Mortgagee as a matter of strict right and without notice to the Mortgagor or anyone claiming under the Mortgagor, and without regard to the adequacy or the then value of the Property or the interest of the Mortgagor therein or the solvency of any party bound for payment of the Obligations, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Property, and the Mortgagor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual rights, powers and duties of receivers in like or similar cases and all the rights, powers and duties of the Mortgagee in case of entry as provided in Section 4.02 hereof, including but not limited to the full power to rent, maintain and otherwise operate the Property upon such terms as are approved by the court and shall continue as such and exercise all such powers until the date of confirmation of sale of the Property unless such receivership is sooner terminated.

          4.06 Exercise of Rights and Remedies. The entering upon and taking possession of the Property, the collection of any Rents and the exercise of any of the rights contained in this Article IV, shall not, alone, cure or waive any Event of Default or notice of default hereunder or invalidate any act done in response to such Event of Default or pursuant to such notice of default and, notwithstanding the continuance in possession of the Property or the collection, receipt and application of Rents, the Mortgagee shall be entitled to exercise every right provided for herein or in the Secured Debt Agreements, or at law or in equity upon the occurrence of any Event of Default.

          4.07 Remedies Not Exclusive. The Mortgagee shall be entitled to enforce payment and performance of the Obligations and to exercise all rights and powers under this Mortgage or other agreement or any laws now or hereafter in force, notwithstanding that some or all of the Obligations may now or hereafter be otherwise secured, whether by mortgage, deed of trust, security deed, pledge, lien, assignment or otherwise. Neither the acceptance of this Mortgage nor its enforcement, whether by court action or pursuant to the powers herein contained, shall prejudice or in any manner affect the Mortgagee’s right to realize upon or enforce any other security now or hereafter held by the Mortgagee, it being agreed that the Mortgagee shall be entitled to enforce this Mortgage and any other security now or hereafter held by the Mortgagee in such order and manner as it may in its absolute and sole discretion and election determine. No remedy herein conferred upon or reserved to the Mortgagee is intended to be exclusive of any other remedy herein or in any of the other Secured Debt Agreements or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy to which the Mortgagee is entitled may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Mortgagee, and the Mortgagee may pursue inconsistent remedies. No delay or omission of the Mortgagee to exercise any right or power accruing upon any Event of Default shall impair any right or power or shall be construed as a waiver of any Event of Default or any acquiescence therein. If the Mortgagee shall have proceeded to invoke any right or remedy hereunder or under any other Secured Debt Agreement, and shall thereafter elect to discontinue or abandon it for any reason, the Mortgagee shall have the unqualified right to do so and, in such an event, the rights and remedies of the Mortgagee shall continue as if such right or remedy had never been invoked, but no such discontinuance or abandonment shall waive any Event of Default which may then exist

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or the right of the Mortgagee thereafter to exercise any right or remedy under the Secured Debt Agreements for such Event of Default.

          4.08 WAIVER OF REDEMPTION, NOTICE, MARSHALLING, ETC. NOTWITHSTANDING ANYTHING HEREIN CONTAINED TO THE CONTRARY, TO THE EXTENT PERMITTED BY LAW, THE MORTGAGOR ACKNOWLEDGING THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS HEREUNDER; (A) WILL NOT (I) AT ANY TIME INSIST UPON, OR PLEAD, OR IN ANY MANNER WHATSOEVER, CLAIM OR TAKE ANY BENEFIT OR ADVANTAGE OF ANY STAY OR EXTENSION OR MORATORIUM LAW, PRESENT OR FUTURE STATUTE OF LIMITA TIONS, ANY LAW RELATING TO THE ADMINISTRATION OF ESTATES OF DECEDENTS, APPRAISEMENT, VALUATION, REDEMPTION, STATUTORY RIGHT OF REDEMPTION, OR THE MATURING OR DECLARING DUE OF THE WHOLE OR ANY PART OF THE OBLIGATIONS, NOTICE OF INTENTION OF SUCH MATURING OR DECLARING DUE, OTHER NOTICE (WHETHER OF DEFAULTS, ADVANCES, THE CREATION, EXISTENCE, EXTENSION OR RENEWAL OF ANY OF THE OBLIGATIONS OR OTHERWISE, EXCEPT FOR RIGHTS TO NOTICES EXPRESSLY GRANTED HEREIN OR IN THE SECURED DEBT AGREEMENTS), SUBROGATION, ANY SET-OFF RIGHTS, HOMESTEAD OR ANY OTHER EXEMPTIONS FROM EXECUTION OR SALE OF THE PROPERTY OR ANY PART THEREOF, WHEREVER ENACTED, NOW OR AT ANY TIME HEREAFTER IN FORCE, WHICH MAY AFFECT THE COVENANTS AND TERMS OF PERFORMANCE OF THIS MORTGAGE, OR (II) CLAIM, TAKE OR INSIST UPON ANY BENEFIT OR ADVANTAGE OF ANY LAW NOW OR HEREAFTER IN FORCE PROVIDING FOR THE VALUATION OR APPRAISAL OF THE PROPERTY OR ANY PART THEREOF, PRIOR TO ANY SALE OR SALES THEREOF WHICH MAY BE MADE PURSUANT TO ANY PROVISION HEREOF, OR PURSUANT TO THE DECREE, JUDGMENT OR ORDER OF ANY COURT OF COMPETENT JURISDICTION; OR (III) AFTER ANY SUCH SALE OR SALES, CLAIM OR EXERCISE ANY RIGHT UNDER ANY STATUTE HERETOFORE OR HEREAFTER ENACTED TO REDEEM THE PROPERTY SO SOLD OR ANY PART THEREOF; AND (B) COVENANTS NOT TO HINDER, DELAY OR IMPEDE THE EXECUTION OF ANY POWER HEREIN GRANTED OR DELEGATED TO THE MORTGAGEE, BUT TO SUFFER AND PERMIT THE EXECUTION OF EVERY POWER AS THOUGH NO SUCH LAW OR LAWS HAD BEEN MADE OR ENACTED. THE MORTGAGOR, FOR ITSELF AND ALL WHO MAY CLAIM UNDER IT, WAIVES, TO THE EXTENT THAT IT LAWFULLY MAY, ALL RIGHT TO HAVE THE PROPERTY MARSHALLED UPON ANY FORECLOSURE HEREOF.

          4.09 Expenses of Enforcement. In connection with any action to enforce any remedy of the Mortgagee under this Mortgage, the Mortgagor agrees to pay all costs and expenses which may be paid or incurred by or on behalf of the Mortgagee, including, without limitation, reasonable attorneys’ fees, receiver’s fees, appraiser’s fees, outlays for documentary and expert evidence, stenographer’s charges, publication costs, and costs (which may be estimated as to items to be expended after entry of the decree) of procuring all such abstracts of title, title searches and examinations, title insurance policies and similar data and assurances with respect to title and value as the Mortgagee may deem necessary or desirable, and neither the Mortgagee nor any other Person shall be required to accept tender of any portion of the

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Obligations unless the same be accompanied by a tender of all such expenses, costs and commissions. All of the costs and expenses described in this Section 4.09, and such expenses and fees as may be incurred in the protection of the Property and the maintenance of the Lien of this Mortgage, including the reasonable fees of any attorney employed by the Mortgagee or in any litigation or proceeding, including appellate proceedings, affecting this Mortgage or the Property(including, without limitation, the occupancy thereof or any construction work performed thereon), including probate and bankruptcy proceedings, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding whether or not an action is actually commenced, shall be immediately due and payable by the Mortgagor, with interest thereon at the rate of interest set forth in the Secured Debt Agreements and shall be part of the Obligations secured by this Mortgage.

          4.10 Indemnity. (a) The Mortgagor agrees to indemnify, reimburse and hold the Mortgagee, each other Secured Creditor and their respective successors, permitted assigns, employees, agents and servants (hereinafter in this Section 4.10 referred to individually, as “Indemnitee,” and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, suits, judgments and any and all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) (for the purposes of this Section 4.10 the foregoing are collectively called “expenses”) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Mortgage, or the documents executed in connection herewith or in any other way connected with the enforcement of any of the terms of, or the preservation of any rights hereunder, or in any way relating to or arising out of the ownership, lease, financing, possession, operation, condition, sale or other disposition, or use of the Property, the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 4.10(a) for expenses, losses, damages or liabilities to the extent caused by the gross negligence or wilful misconduct of such Indemnitee. The Mortgagor agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, loss, damage, penalty, claim, demand, action, judgment or suit, the Mortgagor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the Mortgagor of any such assertion of which such Indemnitee has knowledge.

          (b) Without limiting the application of Section 4.10(a), the Mortgagor jointly and severally agrees to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any material misrepresentation by Mortgagor in this Mortgage, or in any statement or writing contemplated by or made or delivered pursuant to or in connection with this Mortgage.

          (c) If and to the extent that the obligations of the Mortgagor under this Section 4.10 are unenforceable for any reason, the Mortgagor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

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          4.11 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Property. The indemnity obligations of the Mortgagor contained in Sections 4.09 and 4.10 shall continue in full force and effect notwithstanding the full payment of all of the Notes issued under the Credit Agreement, the termination of all Secured Hedging Agreements, the full payment of all Existing Senior Notes issued under the Existing Senior Notes Indenture, the full payment of all New Senior Notes issued under the New Senior Notes Indenture, the full payment of all Refinancing Senior Notes issued under the Refinancing Senior Notes Indenture and the payment of all of the other Obligations and notwithstanding the discharge thereof.

ARTICLE V

ADDITIONAL COLLATERAL

          5.01 Additional Collateral. (a) The Mortgagor acknowledges and agrees that its Applicable Obligations are secured by the Property and various other collateral including, without limitation, at the time of execution of this Mortgage certain personal property of the Mortgagor described in the Credit Documents. The Mortgagor specifically acknowledges and agrees that the Property, in and of itself, if foreclosed or realized upon would not be sufficient to satisfy the outstanding amount of the Obligations. Accordingly, the Mortgagor acknowledges that it is in the Mortgagor’s contemplation that the other collateral pledged to secure the Applicable Obligations may be pursued by the Mortgagee in separate proceedings in the various States, counties and other countries where such collateral may be located and additionally that the Mortgagor liable for payment of the Obligations will remain liable for any deficiency judgments in addition to any amounts the Mortgagee may realize on sales of other property or any other collateral given as security for the Obligations. Specifically, and without limitation of the foregoing, it is agreed that it is the intent of the parties hereto that in the event of a foreclosure of this Mortgage, the Indebtedness evidencing the Obligations shall not be deemed merged into any judgment of foreclosure, but rather shall remain outstanding. It is the further intent and understanding of the parties that the Mortgagee, following a Noticed Event of Default, may pursue all of its collateral with the Obligations remaining outstanding and in full force and effect notwithstanding any judgment of foreclosure or any other judgment which the Mortgagee may obtain.

          (b) The Mortgagor acknowledges and agrees that the Property and the property which may from time to time be encumbered by the other Secured Debt Agreements may be located in more than one State or country and therefore the Mortgagor waives and relinquishes any and all rights it may have, whether at law or equity, to require the Mortgagee to proceed to enforce or exercise any rights, powers and remedies it may have under the Secured Debt Agreements in any particular manner, in any particular order, or in any particular State or other jurisdiction. Furthermore, the Mortgagor acknowledges and agrees that the Mortgagee shall be allowed to enforce payment and performance of the Obligations and to exercise all rights and powers provided under this Mortgage, or the other Secured Debt Agreements or under any provision of law, by one or more proceedings, whether contemporaneous, consecutive or both in

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any one or more States in which the security is located. Neither the acceptance of this Mortgage, or any Credit Document nor its enforcement in one State, whether by court action, power of sale, or otherwise, shall prejudice or in any way limit or preclude enforcement of the Credit Documents through one or more additional proceedings, in that State or in any other State or country.

          (c) The Mortgagor further agrees that any particular remedy or proceeding, including, without limitation, foreclosure through court action (in a state or federal court) or power of sale, may be brought and prosecuted in the local or federal courts of any one or more States as to all or any part of the Property or the property encumbered by the Secured Debt Agreements wherever located, without regard to the fact that any one or more prior or contemporaneous proceedings have been situated elsewhere with respect to the same or any other part of the Property and the property encumbered by the Secured Debt Agreements.

          (d) The Mortgagee may resort to any other security held by the Mortgagee for the payment of the Obligations in such order and manner as the Mortgagee may elect.

          (e) Notwithstanding anything contained herein to the contrary, the Mortgagee shall be under no duty to the Mortgagor or others, including, without limitation, the holder of any junior, senior or subordinate mortgage on the Property or any part thereof or on any other security held by the Mortgagee, to exercise or exhaust all or any of the rights, powers and remedies available to the Mortgagee.

ARTICLE VI

MISCELLANEOUS

          6.01 Governing Law. The provisions of this Mortgage regarding the creation, perfection and enforcement of the liens, security title and security interests herein granted shall be governed by and construed under the laws of the state in which the Property is located. All other provisions of this Mortgage shall be governed by the laws of the State of New York (including, without limitation, Section 5-1401 of the General Obligations Law of the State of New York), without regard to choice of laws provisions.

          6.02 Limitation on Interest. It is the intent of the Mortgagor and the Mortgagee in the execution of this Mortgage and all other instruments evidencing or securing the Obligations to contract in strict compliance with applicable usury laws. In furtherance thereof, the Mortgagee and the Mortgagor stipulate and agree that none of the terms and provisions contained in this Mortgage shall ever be construed to create a contract for the use, forbearance or retention of money requiring payment of interest at a rate in excess of the maximum interest rate permitted to be charged by relevant law. If this Mortgage or any other instrument evidencing or securing the Obligations violates any applicable usury law, then the interest rate payable in respect of the Loans shall be the highest rate permissible by law.

          6.03 Notices. All notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile transmission or cable communications) and

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mailed, telegraphed, telexed, telecopied, cabled or delivered (including by way of overnight courier):

(i)	if to the Mortgagor, at;
	R. J. Reynolds Tobacco Company
	401 North Main Street,
	Winston-Salem, North Carolina 27102
(ii)	if to the Mortgagee, at:
	JPMorgan Chase Bank, N.A.
	270 Park Avenue
	New York, New York 10017
	Attn.: Raju Nanoo
	Tel. No.: 212-270-2272
	Fax. No.: 212-270-5120

     (iii) if to any Lender (other than the Mortgagee), at such address as such Lender shall have specified in the Credit Agreement;

     (iv) if to any Credit Card Issuer, at such address as such Credit Card Issuer shall have specified in writing to the Mortgagor and the Mortgagee;

     (v) if to any Hedging Creditor, at such address as such Hedging Creditor shall have specified in writing to the Mortgagor and the Mortgagee;

     (vi) if to any Existing Senior Notes Creditor, at such address of the Existing Senior Notes Trustee as the Existing Senior Notes Trustee shall have specified in writing to the Mortgagor and the Mortgagee;

     (vii) if to any New Senior Notes Creditor, at such address of the New Senior Notes Trustee as the New Senior Notes Trustee shall have specified in writing to the Mortgagor and the Mortgagee;

     (viii) if to any Refinancing Senior Notes Creditor, at such address of the Refinancing Senior Notes Trustee as the Refinancing Senior Notes Trustee shall have specified in writing to the Mortgagor and the Mortgagee;

or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. Except as otherwise expressly provided herein, all such notices and communications shall be deemed to have been duly given or made (i) in the case of any Secured Creditor, when received and (ii) in the case of the Mortgagor, when delivered to the Mortgagor in any manner required or permitted hereunder.

          6.04 Captions. The captions or headings at the beginning of each Article and Section hereof are for the convenience of the parties and are not a part of this Mortgage.

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          6.05 Amendment. None of the terms and conditions of this Mortgage may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Mortgagor and the Mortgagee (with the consent of (x) if prior to the CA Termination Date, the Required Lenders or, to the extent required by Section 12.12 of the Credit Agreement, all of the Lenders and (y) if on and after the CA Termination Date, the holders of at least a majority of the outstanding principal amount of the Obligations remaining outstanding), provided that (i) no such change, waiver, modification or variance shall be made to Section 4.04 hereof or this Section 6.05 without the consent of each Secured Creditor adversely affected thereby and (ii) that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall require the written consent of the Requisite Creditors of such Class of Secured Creditors. For the purpose of this Agreement, the term “Class” shall mean each class of Secured Creditors, i.e., whether (1) the Lender Creditors as holders of the Credit Document Obligations, (2) the Credit Card Issuers as holders of the Credit Card Obligations, (3) the Hedging Creditors as holders of the Hedging Obligations, (4) the Existing Senior Notes Creditors as holders of the Existing Senior Notes Obligations, (5) the New Senior Notes Creditors as holders of the New Senior Notes Obligations and (6) the Refinancing Senior Notes Creditors as holders of the Refinancing Senior Notes Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of any Class shall mean each of (1) with respect to each of the Credit Document Obligations, the Required Lenders, (2) with respect to the Credit Card Obligations, the holders of at least a majority of all Credit Card Obligations outstanding from time to time, (3) with respect to the Hedging Obligations, the holders of at least a majority of all Secured Hedging Obligations outstanding from time to time, (4) with respect to the Existing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Existing Senior Notes, (5) with respect to the New Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the New Senior Notes and (6) with respect to the Refinancing Senior Notes Obligations, the holders of at least a majority of the outstanding principal amount of the Refinancing Senior Notes.

          6.06 Obligations Absolute. The Obligations of the Mortgagor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of the Mortgagor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Mortgage, any other Credit Document or any other Secured Debt Agreement, except as specifically set forth in a waiver granted pursuant to Section 6.05 hereof; or (c) any amendment to or modification of any Credit Document or any other Secured Debt Agreement, except as specifically set forth in a waiver granted pursuant to Section 6.05 hereof, or any security for any of the Obligations; whether or not the Mortgagor shall have notice or knowledge of any of the foregoing.

          6.07 Further Assurances. The Mortgagor shall, upon the request of the Mortgagee and at the expense of the Mortgagor: (a) promptly correct any defect, error or omission which may be discovered in the contents of this Mortgage or any UCC financing statements filed in connection herewith; (b) promptly execute, acknowledge, deliver and record or file such further instruments (including, without limitation, further mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements and assignments of rents or leases) and promptly do such further acts as may be necessary, desirable

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or proper to carry out more effectively the purposes of this Mortgage and to subject to the liens and security interests hereof any property intended by the terms hereof to be covered hereby, including specifically, but without limitation, any renewals, additions, substitutions, replacements or appurtenances to the Property; and (c) promptly execute, acknowledge, deliver, procure and record or file any document or instrument (including specifically any financing statement) deemed advisable by the Mortgagee to protect, continue or perfect the liens or the security interests hereunder against the rights or interests of third persons.

          6.08 Partial Invalidity. If any of the provisions of this Mortgage or the application thereof to any person, party or circumstances shall to any extent be invalid or unenforceable, the remainder of this Mortgage, or the application of such provision or provisions to persons, parties or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every provision of this Mortgage shall be valid and enforceable to the fullest extent permitted by law.

          6.09 Partial Releases. No release from the Lien of this Mortgage of any part of the Property by the Mortgagee shall in any way alter, vary or diminish the force or effect of this Mortgage on the balance of the Property or the priority of the Lien of this Mortgage on the balance of the Property.

          6.10 Priority. This Mortgage is intended to and shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, excepting solely taxes and assessments levied on the real estate, to the extent of the maximum amount secured hereby.

          6.11 Covenants Running with the Land. All Obligations are intended by the Mortgagor and the Mortgagee to be, and shall be construed as, covenants running with the Property. As used herein, the “Mortgagor” shall refer to the party named in the first paragraph of this Mortgage and to any subsequent owner of all or any portion of the Property. All persons who may have or acquire an interest in the Property shall be deemed to have notice of, and be bound by, the terms of the Credit Agreement and the other Secured Debt Agreements; provided, however, that no such party shall be entitled to any rights thereunder without prior written consent of the Mortgagee.

          6.12 Successors and Assigns. This Mortgage shall be binding upon and inure to the benefit of the Mortgagee and the Mortgagor and their respective successors and assigns. Except as otherwise permitted by Credit Agreement, the Mortgagor shall not, without the prior written consent of the Mortgagee, assign any rights, duties, or obligations hereunder.

          6.13 Purpose of Loans. The Mortgagor hereby represents and agrees that the Loans, Existing Senior Notes, New Senior Notes and Refinancing Senior Notes have or are being obtained or issued for business or commercial purposes, and the proceeds thereof will not be used for personal, family, residential, household or agricultural purposes.

          6.14 No Joint Venture or Partnership. The relationship created hereunder and under the other Credit Documents, the Secured Hedging Agreements, the Secured Credit Card Agreements, the Existing Senior Notes Documents, the New Senior Notes Documents and the Refinancing Senior Notes Documents is that of creditor/debtor. The Mortgagee does not owe

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any fiduciary or special obligation to the Mortgagor and/or any of the Mortgagor’s, officers, partners, agents, or representatives. Nothing herein or in any other Credit Document, any Secured Hedging Agreement, any Secured Credit Card Document, any Existing Senior Notes Document, any New Senior Notes Document or any Refinancing Senior Notes Document is intended to create a joint venture, partnership, tenancy-in-common or joint tenancy relationship between the Mortgagor and the Mortgagee.

          6.15 The Mortgagee as Collateral Agent for Secured Creditors. It is expressly understood and agreed that the rights and obligations of the Mortgagee as holder of this Mortgage and as Collateral Agent for the Secured Creditors and otherwise under this Mortgage are only those expressly set forth in this Mortgage and in the Credit Agreement. The Mortgagee shall act hereunder pursuant to the terms and conditions set forth herein in Section 11 of the Credit Agreement and in Annex M to the Security Agreement, the terms of which shall be deemed incorporated herein by reference as fully as if same were set forth herein in their entirety (for such purpose, treating each reference to the “Security Agreement” as a reference to this Mortgage, each reference to the “Collateral Agent” as a reference to the Mortgagee and each reference to an “Assignor” as a reference to a “Mortgagor”).

          6.16 Full Recourse. This Mortgage is made with full recourse to the Mortgagor and pursuant to and upon all the warranties, representations, covenants, agreements on the part of the Mortgagor contained herein, in the other Credit Documents and the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

          6.17 Reduction of Secured Amount. In the event the amount secured by this Mortgage is less than the aggregate Obligations, then the amount secured hereby shall be reduced only by the last and final sums that the Mortgagor or the Borrower repays with respect to the Obligations and shall not be reduced by any intervening repayments of the Obligations. So long as the balance of the Obligations exceeds the amount secured hereby, any payments of the Obligations shall not be deemed to be applied against, or to reduce, the portion of the Obligations secured by this Mortgage. Such payments shall instead be deemed to reduce only such portions of the Obligations as are secured by other collateral located outside of the state in which the Property is located or are unsecured.

          6.18 Acknowledgment of Receipt. The Mortgagor hereby acknowledges receipt of a true copy of this Mortgage.

          6.19 Release Payment. (a) After the Termination Date (as defined below), this Mortgage shall terminate (provided that all indemnities set forth herein shall survive any such termination) and the Mortgagee, at the request and expense of the Mortgagor, will execute and deliver to the Mortgagor a proper instrument or instruments (without recourse and without representation or warranty) acknowledging the satisfaction and termination of this Mortgage. As used in this Mortgage, (i) “CA Termination Date” shall mean the date upon which the Total Commitment has been terminated, no Letter of Credit or Note under the Credit Agreement is outstanding and all other Credit Document Obligations have been paid in full in cash (other than arising from indemnities for which no request for payment has been made) and (ii) “Termination Date” shall mean the date upon which (x) the CA Termination Date shall have occurred and (y) if (but only if) a Notified Non-Credit Agreement Event of Default (as defined below) shall have

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occurred and be continuing on the CA Termination Date (and after giving effect thereto), either (I) such Notified Non-Credit Agreement Event of Default shall have been cured or waived by the requisite holders of the relevant Obligations subject to such Notified Non-Credit Agreement Event of Default or (II) all Secured Credit Card Agreements and all Secured Hedging Agreements (if any) giving rise to a Notified Non-Credit Agreement Event of Default shall have been terminated and all Obligations subject to such Notified Non-Credit Agreement Event of Default shall have been paid in full (other than arising from indemnities for which no request for payment has been made). As used herein “Notified Non-Credit Agreement Event of Default” means (i) the acceleration of the maturity of any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes or the failure to pay at maturity any Existing Senior Notes, New Senior Notes or Refinancing Senior Notes, or the occurrence of any bankruptcy or insolvency Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture or the Refinancing Senior Notes Indenture, (ii) any Event of Default under a Secured Credit Card Agreement or (iii) any Event of Default under a Secured Hedging Agreement, in the case of any event described in clause (i), (ii) or (iii) to the extent the Existing Senior Notes Trustee, New Senior Notes Trustee, the Refinancing Senior Notes Trustee, the relevant Hedging Creditor or the relevant Credit Card Issuer, as the case may be, has given written notice to the Mortgagee that a “Notified Non-Credit Agreement Event of Default” exists; provided that such written notice may only be given if such Event of Default is continuing and, provided further, that any such Notified Non-Credit Agreement Event of Default shall cease to exist (I) once there is no longer any Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture, the Refinancing Senior Notes Indenture, the respective Secured Credit Card Agreement or the respective Secured Hedging Agreement, as the case may be, in existence, (II) in the case of an Event of Default under the Existing Senior Notes Indenture, the New Senior Notes Indenture, or the Refinancing Senior Notes Indenture, after all Existing Senior Notes Obligations, New Senior Notes Obligations or Refinancing Senior Notes Obligations, as the case may be, have been repaid in full, (III) in the case of an Event of Default under a Secured Credit Card Agreement or a Secured Hedging Agreement, such Secured Hedging Agreement, as the case may be, has been terminated and all Credit Card Obligations or Hedging Obligations, as the case may be, thereunder have been repaid in full, (IV) in the case of an Event of Default under the Existing Senior Notes Indenture, New Senior Notes Indenture or the Refinancing Senior Notes Indenture, if the Existing Senior Notes Creditors, New Senior Notes Creditors or the Refinancing Senior Notes Creditors, as the case may be, holding at least a majority of the aggregate principal amount of the outstanding Existing Senior Notes, New Senior Notes or the Refinancing Senior Notes, as the case may be, at such time have rescinded such written notice and (V) in the case of an Event of Default under a Secured Credit Card Agreement or a Secured Hedging Agreement, the requisite Credit Card Issuers with Credit Card Obligations or Hedging Creditors with Hedging Obligations thereunder at such time have rescinded such written notice.

          (b) So long as no Notified Non-Credit Agreement Event of Default has occurred and is continuing, in the event that (x) prior to the CA Termination Date, (i) any part of the Property is sold or otherwise disposed of in connection with a sale or other disposition permitted by Section 8.02 of the Credit Agreement (it being agreed for such purposes that a release will be deemed “permitted by Section 8.02 of the Credit Agreement” if the proposed transaction constitutes an exception to Section 8.02(f) of the Credit Agreement) or (ii) all or any part of the Property is released at the direction of the Required Lenders (or all the Lenders if required by Section 12.12 of the Credit Agreement), and the proceeds of such sale or disposition

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or from such release (if any) are applied in accordance with the terms of the Credit Agreement to the extent required to be so applied or (y) on and after the CA Termination Date, any part of the Property is sold or otherwise disposed of without violating the Existing Senior Notes Documents, the New Senior Notes Documents, the Refinancing Senior Notes Documents, the Secured Credit Card Agreements and the Secured Hedging Agreements, the Mortgagee, at the request and expense of the Mortgagor, will release such Property from this Mortgage in the manner provided in clause (a) above (it being understood and agreed that upon the release of all or any portion of the Property by the Mortgagee at the direction of the Lenders as provided above, the Lien on the Property in favor of the Credit Card Issuers, the Hedging Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors shall automatically be released).

          (c) In addition to the foregoing, all Property shall be automatically released (subject to reinstatement upon the occurrence of a new Trigger Event) in accordance with Section 7.10(i) of the Credit Agreement.

          (d) At any time that the Mortgagor desires that the Mortgagee take any action to give effect to any release of Property pursuant to the foregoing Section 6.19(a), (b) or (c), it shall deliver to the Mortgagee a certificate signed by an authorized officer describing the Property to be released and certifying its entitlement to a release pursuant to the applicable provisions of Sections 6.19(a), (b) or (c) and in such case the Mortgagee, at the request and expense of the Mortgagor, will execute such documents (without recourse and without any representation or warranty) as required to duly release such Property. The Mortgagee shall have no liability whatsoever to any Secured Creditor as the result of any release of Property by it as permitted by (or which the Mortgagee in good faith believes to be permitted by) this Section 6.19. Upon any release of Property pursuant to Section 6.19(a), (b) or (c), so long as no Noticed Event of Default is then in existence, none of the Secured Creditors shall have any continuing right or interest in such Property, or the proceeds thereof (subject to reinstatement rights upon the occurrence of a new Trigger Event in the case of a release pursuant to Section 6.19(c)(i)).

          6.20 Time of the Essence. Time is of the essence of this Mortgage.

          6.21 The Mortgagee’s Powers. Without affecting the liability of any other Person liable for the payment and performance of the Obligations and without affecting the Lien of this Mortgage in any way, the Mortgagee (acting at the direction of the requisite holders of the relevant Obligations affected thereby) may, from time to time, regardless of consideration and without notice to or consent by the holder of any subordinate Lien, right, title or interest in or to the Property, (a) release any Persons liable for the Obligations, (b) extend the maturity of, increase or otherwise alter any of the terms of the Obligations, (c) modify the interest rate payable on the principal balance of the Obligations, (d) release or reconvey, or cause to be released or reconveyed, all or any portion of the Property, or (e) take or release any other or additional security for the Obligations.

          6.22 Rules of Usage. The following rules of usage shall apply to this Mortgage unless otherwise required by the context:

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     (a) Singular words shall connote the plural as well as the singular, and vice versa, as may be appropriate.

     (b) The words “herein”, “hereof” and “hereunder” and words of similar import appearing in each such document shall be construed to refer to such document as a whole and not to any particular section, paragraph or other subpart thereof unless expressly so stated.

     (c) References to any Person shall include such Person and its successors and permitted assigns.

     (d) Each of the parties hereto and their counsel have reviewed and revised, or requested revisions to, such documents, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construction and interpretation of such documents and any amendments or exhibits thereto.

     (e) Unless an express provision requires otherwise, each reference to “the Property” shall be deemed a reference to “the Property or any part thereof”, and each reference to “Secured Property” shall be deemed a reference to “the Secured Property or any part thereof”.

          6.23 No Off-Set. All sums payable by the Mortgagor shall be paid without counterclaim, other compulsory counterclaims, set-off, or deduction and without abatement, suspension, deferment, diminution or reduction, and the Obligations shall in no way be released, discharged or otherwise affected (except as expressly provided herein or in the Credit Agreement) by reason of: (i) any damage or any condemnation of the Property or any part thereof; (ii) any title defect or encumbrance or any eviction from the Property or any part thereof by title paramount or otherwise; or (iii) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to the Mortgagee or the Mortgagor, or any action taken with respect to this Mortgage by any agent or receiver of the Mortgagee. The Mortgagor waives, to the extent permitted by law, all rights now or hereafter conferred by statute or otherwise to any abatement, suspension, deferment, diminution or reduction of any of the Obligations.

     6.24 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial. (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS MORTGAGE OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE MORTGAGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE MORTGAGOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS PRENTICE-HALL CORPORATION SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 80 STATE STREET, ALBANY, NEW YORK 12207-2543 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND

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ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE MORTGAGOR SHALL DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN THE STATE OF NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THIS MORTGAGE. THE MORTGAGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE MORTGAGOR AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 6.03 HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE MORTGAGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER THE CREDIT AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION BUT NOT LIMITED TO THE JURISDICTION WHERE THE PROPERTY IS LOCATED WITH RESPECT TO THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST GRANTED BY THIS MORTGAGE.

          (b) THE MORTGAGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS MORTGAGE OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

          (c) EACH OF THE PARTIES TO THIS MORTGAGE HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

     6.25 Future Advances. This Mortgage is given to secure the Mortgagor’s Applicable Obligations under, or in respect of, the Secured Debt Agreements to which the Mortgagor is “party” and shall secure not only Applicable Obligations with respect to presently

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existing indebtedness under the foregoing documents and agreements but also any and all other indebtedness now owing or which may hereafter be owing by the Mortgagor or the Borrower, as the case may be, to the Secured Creditors, however incurred, whether interest, discount or otherwise, and whether the same shall be deferred, accrued or capitalized, including future advances and re-advances, whether such advances are obligatory or to be made at the option of the Secured Creditors, or otherwise, to the same extent as if such future advances were made on the date of the execution of this Mortgage. The lien of this Mortgage shall be valid as to all indebtedness secured hereby, including future advances, from the time of its filing for record in the recorder’s office of the county in which the Property is located. This Mortgage is intended to and shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, excepting solely taxes and assessments levied on the real estate, to the extent of the maximum amount secured hereby, and Permitted Encumbrances. Although this Mortgage is given wholly or partly to secure all future obligations which may be incurred hereunder and under the other Secured Debt Agreements, whether obligatory or optional, the Mortgagor and the Mortgagee hereby acknowledge and agree that the Mortgagee and the other Secured Creditors are obligated by the terms of the Secured Debt Agreements to make certain future advances, including advances of a revolving nature, subject to the fulfillment of the relevant conditions set forth in the Secured Debt Agreements. In accordance with Section 29-3-50 of the South Carolina Code of Laws (1976), as amended, all future advances and re-advances that may subsequently be made to the Mortgagor under the Credit Agreement and evidenced by the Notes, Loans, commitments or other notes or instruments, and all modifications, renewals, or extensions thereof, the maximum amount of all Credit Document Obligations outstanding at one time secured by this Mortgage shall not exceed $7,050,000,000, plus interest thereon attorneys’ fees and court costs.

          6.26 Amendment and Restatement . From and after the Fourth Restatement Effective Date, this mortgage amends, restates and supercedes the Original Mortgage.

ARTICLE VII
DEFINITIONS

          “Existing Senior Notes” shall mean, collectively, (i) RJRTH’s 6.50% Notes due June 1, 2007 in an initial aggregate principal amount equal to $300,000,000, (ii) RJRTH’s 7.875% Notes due May 15, 2009 in an initial aggregate principal amount equal to $200,000,000, (iii) RJRTH’s 6.50% Notes due July 15, 2010 in an initial aggregate principal amount equal to $300,000,000, (iv) RJRTH’s 7.25% Notes due June 1, 2012 in an initial aggregate principal amount equal to $450,000,000, and (v) RJRTH’s 7.30% Notes due July 15, 2015 in an initial aggregate principal amount equal to $200,000,000, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement

          “Existing Senior Notes Creditors” shall mean the Existing Senior Notes Trustee and the holders of the Existing Senior Notes.

          “Existing Senior Notes Documents” shall mean the Existing Senior Notes and the Existing Senior Notes Indenture.

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          “Existing Senior Notes Indenture” shall mean, collectively, (i) the indenture, dated as of May 20, 2002, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee and (ii) the indenture, dated as of May 15, 1999, as amended among RJRTH, the guarantors of the notes issued pursuant thereto, and The Bank of New York, as trustee, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “Existing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the under the Existing Senior Notes Indenture.

          “Initial New Senior Notes” shall mean, collectively, (i) the Borrower’s 7.25% Senior Secured Notes due 2013 in an initial aggregate principal amount equal to $625,000,000, (ii) the Borrower’s 7.625% Senior Secured Notes due 2016 in an initial aggregate principal amount equal to $775,000,000 and (iii) the Borrower’s 7.75% Senior Secured Notes due 2018 in an initial aggregate principal amount equal to $250,000,000, in each case issued pursuant to the New Senior Notes Indenture, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes” shall mean (i) the Initial New Senior Notes, (ii) the Exchange Senior Notes and (iii) the Additional Senior Notes, in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes Creditors” shall mean the New Senior Notes Trustee and the holders of the New Senior Notes.

          “New Senior Notes Documents” shall mean the New Senior Notes and the New Senior Notes Indenture.

          “New Senior Notes Indenture” shall mean the Indenture, dated as of May 31, 2006, among the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee, as in effect on the Fourth Restatement Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms thereof and the Credit Agreement.

          “New Senior Notes Trustee” shall mean the trustee under the New Senior Notes Indenture.

          “Refinancing Senior Notes Creditors” shall mean the Refinancing Senior Notes Trustee and the holders of the Refinancing Senior Notes.

          “Refinancing Senior Notes Documents” shall mean, collectively, the Refinancing Senior Notes and the Refinancing Senior Notes Indenture.

          “Refinancing Senior Notes Indenture” shall mean one or more indentures entered into from time to time providing for the issuance of Refinancing Senior Notes by the Borrower,

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in each case as the same may be amended, modified and/or supplemented from time to time in accordance with the term thereof and the Credit Agreement.

          “Refinancing Senior Notes Trustee” shall mean, collectively, the trustee and/or trustees under the Refinancing Senior Notes Indenture.

          “Secured Creditors” shall mean, collectively, the Lender Secured Creditors, the Existing Senior Notes Creditors, the New Senior Notes Creditors and the Refinancing Senior Notes Creditors.

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      The laws of South Carolina provide that in any real estate foreclosure proceeding a defendant against whom a personal judgment may be taken or asked may within thirty days after the sale of the mortgaged property apply to the court for an order of appraisal. The statutory appraisal value as approved by the court would be substituted for the high bid and may decrease the amount of any deficiency owing in connection with the transaction. THE UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE PROPERTY.

      IN WITNESS WHEREOF, this First Amended and Restated Mortgage, Security Agreement, Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing has been duly executed by the Mortgagor as of the date first written above.

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Signed, sealed, and delivered in	R. J. REYNOLDS TOBACCO COMPANY,
presence of	a North Carolina corporation
	By:
	Its:

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Mortgagee:
	JPMORGA	N CHASE BANK, N.A.
	By:
		Name:
		Its:

Signed, sealed, and delivered in
presence of:

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STATE OF NEW YORK                )

                     )                     ACKNOWLEDGMENT

COUNTY OF NEW YORK           )

I,                     , a Notary Public in and for the County and State aforesaid, certify that                    , the                                         of R. J. Reynolds Tobacco Company, a North Carolina corporation, the Mortgagor, personally appeared before me this day and acknowledged the execution of the foregoing instrument by her on behalf of the Mortgagor.

WITNESS my hand and official stamp or seal this ___day of May, 2006.

By:

Notary Public for New York

My Commission Expires:                    

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STATE OF NEW YORK                )

                     )                     ACKNOWLEDGMENT

COUNTY OF NEW YORK           )

I,                     , a Notary Public in and for the County and State aforesaid, certify that                     , the                     of JP Morgan Chase Bank, N.A, personally appeared before me this day and acknowledged the execution of the foregoing instrument by him/her on behalf of JP Morgan Chase Bank, N.A.

WITNESS my hand and official stamp or seal this ___day of May, 2006.

By:

Notary Public for New York

My Commission Expires: ____

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EXHIBIT A

DESCRIPTION OF LAND

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Schedule 1

CREDIT AGREEMENT LOANS

The Credit Document Obligations secured by this Mortgage are evidenced by the Credit Agreement (including the Grantor’s obligations under the Subsidiary Guaranty), which provides that the Grantor is obligated for the payment and performance of, without limitation, the following: (i) Term Loans in the aggregate principal amount of $1,550,000,000 and having a final maturity date of May 31, 2012; (ii) Revolving Loans in the aggregate principal amount of up to $800,000,000 and having final maturity dates no later than May 31, 2011 (the “Revolving Loan Maturity Date”); (iii) Swingline Loans in the original aggregate principal amount of up to $ 75,000,000, and having a final maturity date no later than five business days prior to the Revolving Loan Maturity Date. The Parent and/or one or more of its Subsidiaries may enter into Interest Rate Protection Agreements and Other Hedging Agreements (together with the Existing Interest Rate Swap Agreement), and the Borrower may also request Letters of Credit in accordance Section 2 of the Credit Agreement.

EX-10.8

EXHIBIT 10.8

Dated as of May 31, 2006

REYNOLDS AMERICAN INC.

as Issuer,

the Guarantors listed on Schedule 1 hereto,

and

LEHMAN BROTHERS INC.,

J.P. MORGAN SECURITIES INC.

and

CITIGROUP GLOBAL MARKETS INC.

on behalf of themselves and the

Initial Purchasers listed on Schedule 2 hereto

$625,000,000 7.250% Senior Secured Notes due 2013

$775,000,000 7.625% Senior Secured Notes due 2016

$250,000,000 7.750% Senior Secured Notes due 2018

REGISTRATION RIGHTS AGREEMENT

TABLE OF CONTENTS

	PAGE
1 Definitions		1
2 Registration Under the Securities Act		4
3 Registration Procedures		8
4 Participation of Broker-Dealers in Exchange Offer		13
5 Indemnification and Contribution		14
6 General		17
SCHEDULE 1 GUARANTORS		i
SCHEDULE 2 INITIAL PURCHASERS		ii

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement dated May 31, 2006 (the “Agreement”) is entered into by and among REYNOLDS AMERICAN INC., a Delaware corporation (the “Company”), the guarantors listed in Schedule 1 hereto (the “Guarantors”), and LEHMAN BROTHERS INC., J.P. MORGAN SECURITIES INC. and CITIGROUP GLOBAL MARKETS INC., and the several purchasers named in Schedule 2 hereto (the “Initial Purchasers”).

The Company, the Guarantors and the Initial Purchasers are parties to the Purchase Agreement dated May 18, 2006, among the Company and the Initial Purchasers (the “Purchase Agreement”), which provides for the sale by the Company to the Initial Purchasers of $625,000,000 million aggregate principal amount of the Company’s 7.250% Senior Secured Notes due 2013 (the “2013 Notes”), $775,000,000 million aggregate principal amount of the Company’s 7.625% Senior Secured Notes due 2016 (the “2016 Notes”) and $250,000,000 million aggregate principal amount of the Company’s 7.750% Senior Secured Notes due 2018 (the “2018 Notes,” and together with the 2013 Notes and the 2016 Notes, the “Securities”) which will be guaranteed on a secured basis as and to the extent described in the Indenture (as defined herein) by each of the Guarantors. As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement.

In consideration of the foregoing, the parties hereto agree as follows:

1 Definitions

As used in this Agreement, the following terms shall have the following meanings:

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.

“Closing Date” shall mean the Closing Date as defined in the Purchase Agreement.

“Company” shall have the meaning set forth in the preamble and shall also include the Company’s successors.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

“Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

“Exchange Offer” shall mean the exchange offer by the Company and the Guarantors of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.

“Exchange Offer Registration” shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof.

“Exchange Offer Registration Statement” shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and any document incorporated by reference therein.

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“Exchange Securities” shall mean senior secured notes issued by the Company and guaranteed by the Guarantors under the Indenture containing terms identical to the Securities (except that the Exchange Securities will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to comply with this Agreement and will otherwise differ from the Securities as described in the Offering Memorandum) and to be offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer.

“Guarantors” shall have the meaning set forth in the preamble and shall also include any Guarantor’s successors.

“Holders” shall mean the Initial Purchasers, for so long as they own any Registrable Securities, and each of their successors, assigns and direct and indirect transferees who become owners of Registrable Securities under the Indenture; provided that for purposes of Sections 4 and 5 of this Agreement, the term “Holders” shall include Participating Broker-Dealers.

“Initial Purchasers” shall have the meaning set forth in the preamble.

“Indenture” shall mean the Indenture relating to the Securities and the Exchange Securities dated as of May 31, 2006, among the Company, Santa Fe Natural Tobacco Company Inc., Lane Limited, R. J. Reynolds Tobacco Company, RJR Acquisition Corp., R. J. Reynolds Tobacco Co., FHS, Inc., GMB, Inc., Conwood Holdings Inc., Conwood Company, L.P., Conwood Sales Co. L.P., and Rosswil LLC, as guarantors and The Bank of New York Trust Company, N.A., as trustee, as amended from time to time hereafter in accordance with the terms thereof.

“Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of outstanding Registrable Securities; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, (i) any Registrable Securities owned directly or indirectly by the Company or any of its affiliates shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount, and (ii) in the case of a Shelf Registration Statement, such percentage shall be required from Holders of Registrable Securities entitled to be covered by such Shelf Registration Statement; and provided, further, that if the Company shall issue any additional Securities under the Indenture prior to consummation of the Exchange Offer or, if applicable, the effectiveness of any Shelf Registration Statement, such additional Securities and the Registrable Securities to which this Agreement relates shall be treated together as one class for purposes of determining whether the consent or approval of Holders of a specified percentage of Registrable Securities has been obtained.

“Offering Memorandum” shall mean the Offering Memorandum as defined in the Purchase Agreement.

“Participating Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

“Person” shall mean an individual, partnership, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

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“Prospectus” shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, and in each case including any document incorporated by reference therein.

“Purchase Agreement” shall have the meaning set forth in the preamble.

“Registrable Securities” shall mean the Securities; provided that the Securities shall cease to be Registrable Securities (i) when a Registration Statement with respect to such Securities has become effective under the Securities Act and such Securities have been exchanged or disposed of pursuant to such Registration Statement, (ii) in the case of Securities eligible to be exchanged for Exchange Securities in the Exchange Offer, upon the closing of the Exchange Offer, (iii) when such Securities have been transferred pursuant to Rule 144 under the Securities Act or eligible to be sold pursuant to Rule 144(k) under the Securities Act (or in each case, any similar provision then in force, but not Rule 144A) under the Securities Act or (iv) when such Securities cease to be outstanding.

“Registration Default” shall have the meaning set forth in Section 2(d) hereof.

“Registration Expenses” shall mean any and all expenses incident to performance of or compliance by the Company and the Guarantors with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of counsel for any Underwriters or Holders in connection with blue sky qualification of any Exchange Securities or Registrable Securities), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus and any amendments or supplements thereto, any underwriting agreements, securities sales agreements or other similar agreements and any other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) the reasonable fees and disbursements of the Trustee and its counsel, (vi) the fees and disbursements of counsel for the Company and the Guarantors and, in the case of a Shelf Registration Statement, the reasonable fees and disbursements of one counsel for the Holders (which counsel shall be selected by the Majority Holders and which counsel may also be counsel for the Initial Purchasers) and (vii) the fees and disbursements of the independent public accountants of the Company and the Guarantors, including the expenses of any special audits or “comfort” letters required by or incident to the performance of and compliance with this Agreement, but excluding fees and expenses of counsel to the Underwriters (other than reasonable fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

“Registration Statement” shall mean any registration statement of the Company and the Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such registration statement, including post-effective

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amendments, in each case including the Prospectus contained therein, all exhibits thereto and any document incorporated by reference therein.

“SEC” shall mean the Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

“Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

“Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

“Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and the Guarantors that covers all or a portion of the Registrable Securities (but no other securities unless approved by the Holders of a majority in aggregate principal amount of the Registrable Securities to be covered by such Shelf Registration Statement) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and any document incorporated by reference therein.

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended from time to time.

“Trustee” shall mean the trustee with respect to the Securities under the Indenture.

“Underwriter” shall have the meaning set forth in Section 3 hereof.

“Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an Underwriter for reoffering to the public.

2 Registration Under the Securities Act

(a)

To the extent not prohibited by any applicable law or applicable interpretations of the Staff of the SEC, the Company and the Guarantors shall use their reasonable best efforts to (i) cause to be filed an Exchange Offer Registration Statement covering an offer to the Holders to exchange all the Registrable Securities for Exchange Securities and (ii) have such Registration Statement remain effective until the earlier of (A) 180 days after the closing of the Exchange Offer and (B) the first day after the closing of the Exchange Offer on which Participating Broker-Dealers no longer have a prospectus delivery obligation under the interpretations of the Staff of the SEC referenced in Section 4(a). The Company and the Guarantors shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement is declared effective by the SEC and use their reasonable best efforts to complete the Exchange Offer not later than 210 days after the Closing Date.

The Company and the Guarantors shall commence the Exchange Offer by mailing the related Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law, substantially the following:

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(i)	that the Exchange Offer is being made pursuant to this Agreement and that all Registrable Securities validly tendered and not properly withdrawn will be accepted for exchange;
(ii)	the dates of acceptance for exchange (which shall be a period of at least 20 Business Days from the date such notice is mailed) (the “Exchange Dates”);
(iii)	that any Registrable Security not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement;
(iv)	that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to surrender such Registrable Security, together with the appropriate letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) and in the manner specified in the notice, prior to the close of business on the last Exchange Date; and
(v)	that any Holder will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by sending to the institution and at the address specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange and a statement that such Holder is withdrawing its election to have such Securities exchanged.

As a condition to participating in the Exchange Offer, a Holder will be required to represent to the Company and the Guarantors that (i) any Exchange Securities to be received by it will be acquired in the ordinary course of its business, (ii) at the time of the commencement of the Exchange Offer it has no arrangement or understanding with any Person, or any intention, to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities, (iii) it is not an “affiliate” (within the meaning of Rule 405 under the Securities Act) of the Company or any Guarantor, (iv) if such Holder is a broker-dealer, it did not purchase the Securities being tendered in the Exchange Offer directly from the Company for resale pursuant to (A) Rule 144A under the Securities Act or (B) any other available exemption from registration under the Securities Act, (v) if such Holder is a broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable Securities that were acquired as a result of market-making or other trading activities, then such Holder will deliver a Prospectus in connection with any resale of such Exchange Securities, and (vi) it is not acting on behalf of any person that could not truthfully make the representations set forth in clauses (i) – (v) of this paragraph.

As soon as practicable after the last Exchange Date, the Company and the Guarantors shall:

(i)	accept for exchange Registrable Securities or portions thereof validly tendered and not properly withdrawn pursuant to the Exchange Offer; and
(ii)	deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee to promptly authenticate and

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deliver to each Holder, Exchange Securities equal in principal amount to the principal amount of the Registrable Securities surrendered by such Holder.

The Company and the Guarantors shall use their reasonable best efforts to complete the Exchange Offer as provided above and shall comply with the applicable requirements of the Securities Act, the Exchange Act and other applicable laws and regulations in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate any applicable law or applicable interpretations of the Staff of the SEC.

(b)	In the event that (i) the Company and the Guarantors determine that the Exchange Offer Registration provided for in Section 2(a) above is not available or may not be completed as soon as practicable after the last Exchange Date because it would violate any applicable law or applicable interpretations of the Staff of the SEC, (ii) the Exchange Offer is not for any other reason completed by the 210th day after the Closing Date or (iii) any Initial Purchaser shall so request in writing not later than the 30th day following completion of the Exchange Offer in connection with any offering or sale of Registrable Securities held by such requesting Initial Purchaser, which Registrable Securities are ineligible to be exchanged for Exchange Securities in the Exchange Offer, the Company and the Guarantors shall use their reasonable best efforts to cause to be filed as soon as practicable after such determination, date or request, as the case may be, a Shelf Registration Statement providing for the sale of all the Registrable Securities by the Holders thereof, or the Registrable Securities ineligible for exchange in the Exchange Offer, as the case may be, and to have such Shelf Registration Statement become effective.
	In the event that the Company and the Guarantors are required to file a Shelf Registration Statement pursuant to clause (iii) of the preceding sentence, the Company and the Guarantors shall use their reasonable best efforts to file and cause to become effective under the Securities Act both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities held by the Initial Purchasers after completion of the Exchange Offer.
	The Company and the Guarantors agree to use their reasonable best efforts to keep the Shelf Registration Statement continuously effective until the expiration of the period referred to in Rule 144(k) under the Securities Act with respect to the Registrable Securities or such shorter period that will terminate when all the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or otherwise cease to be Registrable Securities (the “Shelf Effectiveness Period”). The Company and the Guarantors further agree to supplement or amend the Shelf Registration Statement and the related Prospectus if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registration or if reasonably requested by a Holder of Registrable Securities with respect to information relating to such Holder, and to use their reasonable best efforts to cause any such amendment to become effective and such Shelf

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	Registration Statement and Prospectus to become usable as soon as thereafter practicable. The Company and the Guarantors agree to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC.
(c)	The Company and the Guarantors shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) and Section 2(b) hereof. Each Holder shall pay all underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement or the Exchange Offer Registration Statement.
(d)	An Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not be deemed to have become effective unless it has been declared effective by the SEC. A Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC or it has become effective automatically pursuant to General Instruction I.D of Form S-3 under the Securities Act.
	In the event that either the Exchange Offer is not completed on or prior to December 27, 2006, or the Shelf Registration Statement, if required hereby, does not become effective on or prior to the 60th day after the Company and Guarantors are first requested to file the Shelf Registration Statement pursuant to Section 2(b)(iii) hereof, the interest rate on the Registrable Securities will be increased by 0.5% per annum until the Exchange Offer is completed or the Shelf Registration Statement, if required hereby, becomes effective or the Registrable Securities become freely tradable under the Securities Act.
	If the Shelf Registration Statement has become effective and thereafter either ceases to be effective or the Prospectus contained therein ceases to be usable at any time during the Shelf Effectiveness Period, and such failure to remain effective or usable exists for more than 90 days (whether or not consecutive) in any 12-month period, then the interest rate on the Registrable Securities will be increased by 0.5% per annum commencing on the 31st day in such 12-month period and ending on such date that the Shelf Registration Statement has again become effective or the Prospectus again becomes usable.
	A circumstance that requires an increase in the interest rate on the Registrable Securities pursuant to this Section 2(d) is referred to as a “Registration Default.”
(e)	Without limiting the remedies available to the Initial Purchasers and the Holders, the Company and the Guarantors acknowledge that any failure by the Company or the Guarantors to comply with their obligations under Section 2(a) and Section 2(b) hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company’s and the Guarantors’ obligations under Section 2(a) and Section 2(b) hereof. Notwithstanding the foregoing, the additional interest provided for in Section 2(d) shall be the exclusive monetary remedy available to holders of Registrable Securities in respect of Registration Defaults.

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3 Registration Procedures

In connection with their obligations pursuant to Section 2(a) and Section 2(b) hereof, the Company and the Guarantors shall as expeditiously as possible, until the last day on which an Exchange Offer Registration Statement must be kept effective pursuant to Section 2(a) hereof in the case of an Exchange Registration, or on which a Shelf Registration Statement must be kept effective pursuant to Section 2(b) hereof in the case of a Shelf Registration:

(a)	prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act, which form (i) shall be selected by the Company and the Guarantors, (ii) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the selling Holders thereof, or the Holders of Registrable Securities that are ineligible to be exchanged in the Exchange Offer as set forth in Section 2(b), and (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference, as appropriate, all financial statements required by the SEC to be filed therewith; and use their reasonable best efforts to cause such Registration Statement to become effective and remain effective for the applicable period in accordance with Section 2 hereof;
(b)	prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period in accordance with Section 2 hereof and cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act; and keep each Prospectus current during the period described in Section 4(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or dealers with respect to the Registrable Securities or Exchange Securities;
(c)	in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, to counsel for the Initial Purchasers, to counsel for such Holders and to each Underwriter of an Underwritten Offering of Registrable Securities, if any, without charge, as many copies of each Prospectus as such Holder or Underwriter may reasonably request, including each preliminary Prospectus, and any amendment or supplement thereto, in order to facilitate the sale or other disposition of the Registrable Securities thereunder; and the Company and the Guarantors consent to the use of such Prospectus and any amendment or supplement thereto in accordance with applicable law by each of the selling Holders of Registrable Securities and any such Underwriters in connection with the offering and sale of the Registrable Securities covered by and in the manner described in such Prospectus or any amendment or supplement thereto in accordance with applicable law;
(d)	use their reasonable best efforts to register or qualify the Registrable Securities under all applicable state securities or blue sky laws of such jurisdictions in the United States as any Holder of Registrable Securities covered by a Registration Statement shall reasonably request in writing by the time the applicable Registration Statement becomes effective; cooperate with the Holders in connection with any filings required to be made with the National Association of Securities Dealers, Inc. in connection with the sale of Registrable Securities; and do any and all other acts and things that may be reasonably necessary or advisable to enable each Holder to complete the disposition in each such jurisdiction of the Registrable Securities

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	owned by such Holder; provided that neither the Company nor any Guarantor shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not so subject;
(e)	in the case of a Shelf Registration, notify each Holder of Registrable Securities, counsel for such Holders and counsel for the Initial Purchasers promptly (and, if requested by any such Holder or counsel, confirm such notice in writing) (i) when a Registration Statement has become effective and when any post-effective amendment thereto has been filed and becomes effective, (ii) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if, between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company or any Guarantor contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to an offering of such Registrable Securities cease to be true and correct in all material respects or if the Company or any Guarantor receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (v) of the happening of any event during the period a Shelf Registration Statement is effective that makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or that requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading and (vi) of any determination by the Company or any Guarantor that a post-effective amendment to a Registration Statement would be appropriate, and (vii) of any determination by the Company or the Guarantors, in the exercise of their reasonable judgment, that (A) it is not in the best interests of the Company and the Guarantors to disclose a possible acquisition or business combination or other transaction, business development or event involving the Company or the Guarantors that may require disclosure in the Shelf Registration Statement, or if required to be kept effective after consummation of the Exchange Offer, the Exchange Offer Registration Statement, or (B) obtaining any financial statements relating to an acquisition or business combination required to be included in the Shelf Registration Statement, or if required to be kept effective after consummation of the Exchange Offer, the Exchange Offer Registration Statement, would be impracticable;
(f)	use their reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment and provide immediate notice to each Holder of the withdrawal of any such order;
(g)	in the case of a Shelf Registration, furnish to each Holder of Registrable Securities included in such Shelf Registration, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without any documents incorporated therein by reference or exhibits thereto, unless requested);

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(h)	in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends and enable such Registrable Securities to be issued in such denominations and registered in such names (consistent with the provisions of the Indenture) as the selling Holders may reasonably request at least two Business Days prior to the closing of any sale of Registrable Securities;
(i)	in the case of a Shelf Registration, upon the occurrence of any event contemplated by Section 3(e)(v) hereof, use their reasonable best efforts to prepare and file with the SEC a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company and the Guarantors shall notify the Holders of Registrable Securities to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and such Holders hereby agree to suspend use of the Prospectus until the Company and the Guarantors have amended or supplemented the Prospectus to correct such misstatement or omission;
(j)	a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or of any document that is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement (other than reports and statements filed by the Company or the Guarantors pursuant to the Exchange Act), provide copies of such document to the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, to the Holders of Registrable Securities and their counsel included in such Shelf Registration) and make such of the representatives of the Company and the Guarantors as shall be reasonably requested by the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities or their counsel included in such Shelf Registration) available for discussion of such document; and the Company and the Guarantors shall not, at any time after initial filing of a Registration Statement, file any Prospectus, any amendment of or supplement to a Registration Statement or a Prospectus, or any document that is to be incorporated by reference into a Registration Statement or a Prospectus (other than reports and statements filed by the Company or the Guarantors pursuant to the Exchange Act), of which the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities and their counsel included in such Shelf Registration) shall not have previously been advised and furnished a copy or to which the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Holders or their counsel of Registrable Securities included in such Shelf Registration) shall reasonably object;
(k)	obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the effective date of a Registration Statement;
(l)	cause the Indenture to be qualified under the Trust Indenture Act, if not so qualified, in connection with the registration of the Exchange Securities or Registrable

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	Securities, as the case may be; cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and execute, and use their reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner;
(m)	in the case of a Shelf Registration, and subject to the execution and delivery by any Inspector (as defined below), Underwriter, any attorneys and accountants designated by the Inspector, or other agents of the Holders or any Underwriter, of a customary confidentiality agreement, make available for inspection, at the offices and locations where such records, documents and properties are normally kept, by a representative of the Holders of the Registrable Securities (an “Inspector”), any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, and attorneys from no more than one law firm and accountants from no more than one accounting firm designated by the Inspector, at reasonable times and in a reasonable manner, all financial and other records, documents and properties of the Company and the Guarantors pertinent to such Person establishing a due diligence defense under applicable securities law, and cause the respective officers, directors and employees of the Company and the Guarantors to supply all information reasonably requested by any such Inspector, Underwriter, attorney or accountant in connection with a Shelf Registration Statement; provided that the Company and the Guarantors shall not be obligated to make available for inspection by any Person any records, documents and properties if such action may reasonably impair the availability of any claim of legal privilege for such record, document or property in any proceeding and counsel for any Underwriter is provided a reasonably satisfactory explanation regarding the risk of such impairment; provided further that the confidentiality agreement referred to in this Section 3(m) shall not restrict any Person from disclosing any information in connection with such Person establishing a due diligence defense, under applicable securities law, in any proceeding;
(n)	in the case of a Shelf Registration, if reasonably requested by any Holder of Registrable Securities covered by a Shelf Registration Statement, promptly incorporate in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such filing; and
(o)	in the case of a Shelf Registration, enter into such customary agreements and take all such other actions in connection therewith (including those reasonably requested by the Holders of a majority in principal amount of the Registrable Securities being sold) in order to expedite or facilitate the disposition of such Registrable Securities including, but not limited to, an Underwritten Offering and in such connection, (i) to the extent possible, make such representations and warranties to the Holders (if such Holders may reasonably have a due diligence defense under the Securities Act) and any Underwriters of such Registrable Securities with respect to the business of the Company and its subsidiaries, the Registration Statement, Prospectus and documents incorporated by reference or deemed incorporated by

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reference, if any, in each case, in form, substance and scope as are reasonable and customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Securities, and confirm the same if and when requested, (ii) obtain opinions of counsel to the Company and the Guarantors addressed to each selling Holder (if such Holders may reasonably have a due diligence defense under the Securities Act) and Underwriter of Registrable Securities, covering the matters customarily covered in opinions requested in underwritten offerings of debt securities similar to the Securities (which opinions and counsel, in form, scope and substance, shall be customary and reasonably satisfactory to the Holders and such Underwriters and their respective counsel), (iii) obtain “comfort” letters from the independent certified public accountants of the Company and the Guarantors (and, if necessary, any other certified public accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by the Company or any Guarantor for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each selling Holder (if such Holders may reasonably have a due diligence defense under the Securities Act) and Underwriter of Registrable Securities, such letters to be in customary form and covering matters of the type customarily covered in “comfort” letters in connection with underwritten offerings of debt securities similar to the Securities and (iv) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in principal amount of the Registrable Securities being sold (if such Holders may reasonably have a due diligence defense under the Securities Act) or the Underwriters, and which are customarily delivered in underwritten offerings of debt securities similar to the Securities, to evidence the continued validity of the representations and warranties of the Company and the Guarantors made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in an underwriting agreement.

In the case of a Shelf Registration Statement, the Company may require each Holder of Registrable Securities to furnish to the Company such information regarding such Holder and the proposed disposition by such Holder of such Registrable Securities as the Company and the Guarantors may from time to time reasonably request in writing.

Notwithstanding anything in this Agreement to the contrary, in the case of a Shelf Registration Statement, or an Exchange Offer Registration Statement in connection with which a Participating Broker-Dealer has a prospectus delivery requirement, each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company and the Guarantors of the happening of any event of the kind described in Section 3(e)(iii), 3(e)(v) or 3(e)(vii) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof or notice from the Company or the Guarantors that dispositions of Registrable Securities pursuant to the Registration Statement may be resumed and, if so directed by the Company and the Guarantors, such Holder will deliver to the Company and the Guarantors all copies in its possession, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities that is current at the time of receipt of such notice. Any notice provided pursuant to Section 3(e)(v) or 3(e)(vii) shall not be required to disclose any possible acquisition, business combination or

12

other transaction, business development or event if the Company or the Guarantors determine in the exercise of their reasonable judgment that such acquisition or business combination or other transaction, business development or event should remain confidential.

If the Company and the Guarantors shall give any such notice to suspend the disposition of Registrable Securities pursuant to a Registration Statement, the Company and the Guarantors shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions. The Company and the Guarantors may give any such notice only twice during any 365-day period and any such suspensions shall not exceed 60 days for each suspension and there shall not be more than two suspensions in effect during any 365-day period.

The Holders of Registrable Securities covered by a Shelf Registration Statement who desire to do so may sell such Registrable Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers (the “Underwriters”) that will administer the offering will be selected by the Majority Holders of the Registrable Securities included in such offering.

4 Participation of Broker-Dealers in Exchange Offer

(a)	The Staff of the SEC has taken the position that any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a “Participating Broker-Dealer”) may be deemed to be an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities.
	The Company and the Guarantors understand that it is the Staff’s position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligation under the Securities Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act.
(b)	In light of the above, and notwithstanding the other provisions of this Agreement, the Company and the Guarantors agree to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement, as would otherwise be contemplated by Section 3(i), for a period ending upon the earlier of (i) 180 days after the closing of the Exchange Offer and (ii) the first day after the consummation of the Exchange Offer when Participating Broker-Dealers no longer have a prospectus delivery obligation under the interpretations of the Staff of the SEC referenced in Section 4(a) (as such period may be extended pursuant to the penultimate paragraph of Section 3 of this Agreement), if requested by the Initial

13

Purchasers or by one or more Participating Broker-Dealers, in order to expedite or facilitate the disposition of any Exchange Securities by Participating Broker-Dealers consistent with the positions of the Staff recited in Section 4(a) above. The Company and the Guarantors further agree that Participating Broker-Dealers shall be authorized to deliver such Prospectus during such period in connection with the resales contemplated by this Section 4, subject to the Company’s and the Guarantors’ ability to suspend the disposition of Registrable Securities as set forth in Section 3.

(c)

The Initial Purchasers shall have no liability to the Company, any Guarantor or any Holder with respect to any request that they may make pursuant to Section 4(b) above.

5 Indemnification and Contribution

(a) The Company and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser and each Holder, their respective affiliates, directors and officers and each Person, if any, who controls any Initial Purchaser or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any Prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser or information relating to any Holder furnished to the Company in writing through Lehman Brothers Inc., J.P. Morgan Securities Inc., Citigroup Global Markets Inc. or any selling Holder expressly for use therein, provided that with respect to any such untrue statement in or omission from any preliminary prospectus relating to a Registration Statement, the indemnity agreement contained in this paragraph (a) shall not inure to the benefit of any Holder to the extent that the sale to the Person asserting any such loss, claim, damage or liability was an initial resale by such Holder and any such loss, claim, damage or liability of or with respect to such Holder results from the fact that both (i) a copy of the final Prospectus was not sent or given to such Person at or prior to the written confirmation or the sale of such Securities to such Person and (ii) the untrue statement in or omission from such preliminary prospectus was corrected in the final Prospectus relating to such Registration Statement unless, in either case, such failure to deliver the Prospectus was a result of non-compliance by the Company or any of the Guarantors with the provisions of Section 3 hereof. In connection with any Underwritten Offering permitted by Section 3, the Company and the Guarantors, jointly and severally, will also indemnify the Underwriters, if any, selling brokers, dealers and similar securities industry professionals participating in the distribution, their respective affiliates and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided

14

	above with respect to the indemnification of the Holders, if requested in connection with any Registration Statement.
(b)	Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors, the Initial Purchasers and the other selling Holders, their respective affiliates, the directors of the Company and the Guarantors, each officer of the Company and the Guarantors who signed the Registration Statement and each Person, if any, who controls the Company, the Guarantors, any Initial Purchaser and any other selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Holder furnished to the Company in writing by such Holder expressly for use in any Registration Statement and any Prospectus.
(c)	If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such Person (the “Indemnified Person”) shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 5 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 5. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 5 that the Indemnifying Person may designate in such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding, as incurred upon receipt of appropriate supporting documentation. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed in writing to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reasonable and reimbursed as they are

15

incurred upon the receipt by the Indemnifying Person of an invoice therefor. Any such separate firm (x) for any Initial Purchaser, its affiliates, directors and officers and any control Persons of such Initial Purchaser shall be designated in writing by Lehman Brothers Inc., J.P. Morgan Securities Inc. or Citigroup Global Markets Inc., (y) for any Holder, its affiliates, directors and officers and any control Persons of such Holder shall be designated in writing by the Majority Holders and (z) in all other cases shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for reasonable fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

(d)

If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors from the offering of the Securities and the Exchange Securities, on the one hand, and by the Holders from receiving Securities or Exchange Securities registered under the Securities Act, on the other hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the Holders on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors on the one hand and the Holders on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

16

(e)	The Company, the Guarantors and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 5, in no event shall a Holder be required to contribute any amount in excess of the amount by which the total price at which the Securities or Exchange Securities sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
(f)	The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.
(g)	The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Initial Purchasers or any Holder, their respective affiliates or any Person controlling any Initial Purchaser or any Holder, or by or on behalf of the Company or the Guarantors, their respective affiliates or the officers or directors of or any Person controlling the Company or the Guarantors, (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities pursuant to a Shelf Registration Statement.

6 General

(a)

No Inconsistent Agreements The Company and the Guarantors represent, warrant and agree that (i) the rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of any other outstanding securities issued or guaranteed by the Company or any Guarantor under any other agreement and (ii) neither the Company nor any Guarantor has entered into, or on or after the date of this Agreement will enter into, any agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof.

(b)

Amendments and Waivers The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company and the Guarantors have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or consent; provided that no amendment, modification, supplement, waiver or consent to any departure from the provisions of Section 5 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by

17

	such Holder. Any amendments, modifications, supplements, waivers or consents pursuant to this Section 6(b) shall be by a writing executed by each of the parties hereto.
(c)	Notices All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in the Purchase Agreement; (ii) if to the Company and the Guarantors, initially at the Company’s address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c); and (iii) to such other persons at their respective addresses as provided in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c). All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture.
(d)	Successors and Assigns This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company or the Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement.
(e)	Third Party Beneficiaries Other than the agreements made pursuant to Section 5 hereto, each Holder shall be a third party beneficiary to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of other Holders hereunder.
(f)	Counterparts This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

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(g)	Headings The headings in this Agreement are for convenience of reference only, are not a part of this Agreement and shall not limit or otherwise affect the meaning hereof.
(h)	Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
(i)	Miscellaneous This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto. If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The Company, the Guarantors and the Initial Purchasers shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, void or unenforceable provisions.

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

Very truly yours,

REYNOLDS AMERICAN INC.

By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Senior Vice President & Treasurer
SANTA FE NATURAL TOBACCO COMPANY INC. , as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Assistant Treasurer
LANE LIMITED, as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Assistant Treasurer
R.J. REYNOLDS TOBACCO COMPANY, as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Senior Vice President & Treasurer
RJR ACQUISITION CORP., as Guarantor
By:	/s/ McDara P. Folan, III
	Name: McDara P. Folan, III
	Title: Vice President & Assistant Secretary

Note Offering Registration Rights Agreement Signature Page

R. J. REYNOLDS TOBACCO CO., as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Vice President &Treasurer
FHS, INC., as Guarantor
By:	/s/ Kathryn A. Premo
	Name: Kathryn A. Premo
	Title: Treasurer
GMB, INC., as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Vice President & Treasurer

Note Offering Registration Rights Agreement Signature Page

CONWOOD HOLDINGS INC., as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Vice President &Treasurer
CONWOOD COMPANY L.P., as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Vice President &Treasurer
CONWOOD SALES CO. L.P., as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Vice President &Treasurer
ROSSWIL LLC, as Guarantor
By:	/s/ Daniel A. Fawley
	Name: Daniel A. Fawley
	Title: Vice President &Treasurer

Note Offering Registration Rights Agreement Signature Page

Accepted as of the date first above written:
LEHMAN BROTHERS INC.
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 2 hereto.
By:	/s/ Tim Hartzell
	Authorized Signatory
J.P. MORGAN SECURITIES INC.
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 2 hereto.
By:	/s/ Maria Sramek
	Authorized Signatory
CITIGROUP GLOBAL MARKETS INC.
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 2 hereto.
By:	/s/ Brian D. Bednarski
	Authorized Signatory
Brian D. Bednarski
Director

Note Offering Registration Rights Agreement Signature Page

SCHEDULE 1

GUARANTORS

Santa Fe Natural Tobacco Company, Inc. a New Mexico corporation

Lane Limited, a New York corporation

R.J. Reynolds Tobacco Company, a North Carolina corporation

RJR Acquisition Corp., a Delaware corporation

R.J. Reynolds Tobacco Co., a Delaware corporation

FHS, Inc., a Delaware corporation

GMB, Inc., a North Carolina corporation

Conwood Holdings Inc., a Delaware corporation

Conwood Company, LP, a Delaware limited partnership

Conwood Sales Co., LP, a Delaware limited partnership

Rosswil LLC, a Delaware limited liability company

SCHEDULE 2

INITIAL PURCHASERS

	Aggregate		Aggregate		Aggregate
	Principal Amount		Principal Amount		Principal Amount
	of 2013 Notes to		of 2016 Notes to		of 2018 Notes to
Initial Purchaser	be Purchased		be Purchased		be Purchased
Lehman Brothers Inc.	$	181,250,000.00	$	224,750,000.00	$	72,500,000.00
J.P. Morgan Securities, Inc.	$	181,250,000.00	$	224,750,000.00	$	72,500,000.00
Citigroup Global Markets Inc.	$	181,250,000.00	$	224,750,000.00	$	72,500,000.00
Mizuho International plc	$	31,250,000.00	$	38,750,000.00	$	12,500,000.00
Scotia Capital (USA) Inc.	$	18,750,000.00	$	23,250,000.00	$	7,500,000.00
Wachovia Capital Markets, LLC	$	18,750,000.00	$	23,250,000.00	$	7,500,000.00
BNY Capital Markets, Inc.	$	12,500,000.00	$	15,500,000.00	$	5,000,000.00
Total	$	625,000,000	$	775,000,000	$	250,000,000

EX-99.1

EXHIBIT 99.1

Reynolds American Completes Acquisition of Conwood

     WINSTON-SALEM, N.C. – May 31, 2006 – Reynolds American Inc. (NYSE: RAI) today completed its $3.5 billion acquisition of a holding company that owns Conwood, the nation’s second largest manufacturer of smokeless tobacco products, from business interests of the Pritzker family.

     The transaction, which was announced April 25, 2006, received required approval from the Federal Trade Commission on May 23, 2006. Reynolds American funded the $3.5 billion acquisition purchase price with the net proceeds of its private offering of $1.65 billion of senior secured notes and borrowings under its $1.55 billion senior secured term loan facility, each of which also closed today, as well as available cash. In addition, RAI entered into a $550 million revolving credit facility today.

     “We are excited about the growth prospects Conwood brings to Reynolds American,” said Susan M. Ivey, RAI’s chairman and chief executive officer. “Conwood’s strong, well-positioned brands are gaining share in the growing moist snuff market, and its high margins will enhance our ability to continue to provide an excellent return to our shareholders.”

     Reynolds American will combine its Lane Limited subsidiary, currently headquartered in Tucker, Ga., with Conwood in order to drive growth in the companies’ portfolio of other tobacco products (OTP). Lane markets a range of specialty tobacco products, including cigars and little cigars; roll-your-own and pipe tobaccos; and Dunhill and other premium international cigarettes. The headquarters of the combined companies will be in Memphis, Tenn., and full integration of the two companies is expected to be completed by year-end 2007.

RISK FACTORS

     Statements included in this news release that are not historical in nature are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements regarding RAI’s future performance and financial results inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include:

• the substantial and increasing regulation and taxation of the tobacco industry;

• various legal actions, proceedings and claims relating to the sale, distribution, manufacture, development, advertising, marketing and claimed health effects

	of tobacco products that are pending or may be instituted against RAI or its subsidiaries;
•	the substantial payment obligations and limitations on the advertising and marketing of cigarettes under the MSA and other state settlement agreements;
•	the continuing decline in volume in the domestic cigarette industry;
•	competition from other manufacturers, including any new entrants in the marketplace;
•	increased promotional activities by competitors and the growth of deep-discount cigarette brands;
•	the success or failure of new product innovations and acquisitions;
•	the responsiveness of both the trade and consumers to new products, marketing strategies and promotional programs;
•	the ability to realize the benefits and synergies arising from the combination of RJR Tobacco and the U.S. cigarette and tobacco business of B&W;
•	the ability to achieve efficiencies in manufacturing and distribution operations without negatively affecting sales;
•	the cost of tobacco leaf and other raw materials and other commodities used in products, including future market pricing of tobacco leaf which could adversely impact inventory valuations;
•	the effect of market conditions on foreign currency exchange rate risk, interest rate risk and the return on corporate cash;
•	the effect of market conditions on the performance of pension assets or any adverse effects of any new legislation or regulations changing pension expense accounting or required pension funding levels;
•	the rating of RAI’s and RJR’s securities;
•	any restrictive covenants imposed under RAI’s and RJR’s debt agreements;
•	the possibility of fire, violent weather and other disasters that may adversely affect the manufacturing facilities;
•	any adverse effects from the transition of the packaging operations formerly conducted by RJR Packaging, LLC, a wholly owned subsidiary of RJR Tobacco, to the buyers of RJR Packaging, LLC’s businesses;
•	any adverse effects arising out of the implementation of an SAP enterprise business system in the third quarter of 2006;
•	the potential existence of significant deficiencies or material weaknesses in internal controls over financial reporting that may be identified during the performance of testing required under Section 404 of the Sarbanes-Oxley Act of 2002; and
•	the failure to realize the anticipated benefits and synergies arising from the Conwood acquisition.

     Due to these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Except as provided by federal securities laws, RAI is not required to

publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

     Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, Inc., Lane Limited and R.J. Reynolds Global Products, Inc. R.J. Reynolds Tobacco Company, the second-largest U.S. tobacco company, manufactures about one of every three cigarettes sold in the country. The company’s brands include five of the 10 best-selling U.S. brands: Camel, Kool, Winston, Salem and Doral. Santa Fe Natural Tobacco Company, Inc. manufactures Natural American Spirit cigarettes and other tobacco products for U.S. and international markets. Lane Limited manufactures several roll-your-own, pipe tobacco and little cigar brands, and distributes Dunhill tobacco products. R.J. Reynolds Global Products, Inc. manufactures, sells and distributes American-blend cigarettes and other tobacco products to a variety of customers worldwide. Copies of RAI’s news releases, annual reports, SEC filings and other financial materials are available at www.ReynoldsAmerican.com.