Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited

Court File No. CV-19-616077-00CL

SEVENTH REPORT OF THE MONITOR

February 13, 2020

Q. P. O. N. M. L. K. J. I. H. G. F. E. D. C. B. A.

Stay of Proceedings of Stay theMonitor’sOverview of Activities PensionIHGI Plan Contributions Ryder Settlement ProposedMexicoPaymentsUpdate on BAT Vapour TobaccoNew and Regulations FlowCash Forecast ...... Receipts and Disbursements for the 20 C Imperial’s Business Impacting Trends Developmentsand Industry Activities, Business Imperial’s theMediationUpdate on Updat Purpose Report this of Terms Reference Disclaimer of and Background Introduction General ash

Management e Court on Proceedings

......

...... TABLE OFTABLE CONTENTS

......

...... -

...... Week Week ......

...... Period Ending February 2, 2020 ......

...... 15 13 13 12 12 11 . 9 7 6 5 4 4 3 2 2 1 1

3. 2. B. 1. A.

AND IN OFAND OR MATTER APLAN THE COMPROMISE OF

IN THE MATTER THE OF IMPERIALLIMITEDIMPERIALCANADA TOBACCO AND TOBACCO restated April 25,2019. as of and amended further and 2019 5, April of as restated and amended as 2019, 12, The Judgment the from arising liabilities Proceedings these of purpose principal The INTRODUCTION in the glossary, respe toits ishyperlinked “A” as Report this to attached glossary the in specified meanings respective this In GENERAL . The first instance of each of instance first The . Initial Order Initial

SUBMITTED BYFTISUBMITTED CONSULTING CANADA INC., Report .

, is to restructure and compromise

uls ohrie eie, l cptlzd terms capitalized all defined, otherwise unless , SEVENT

in these in R.S.C. 1985,c. C R.S.C. IN ITS CAPACITYIN ITS MONITOR AS SUPERIOR COURT JUSTICE OF

(COMMERCIAL LIST) COMPANIES’ CREDITORS ARRANGEMENT ACT COMPANIES’ ARRANGEMENT CREDITORS COMPANY LIMITEDCOMPANY H CCAA Proc CCAA

REPORT COURT TO THE

oac Claims Tobacco ONTARIO capitalized term throughout this Report, if defined if Report, this throughout term capitalized CA Proceedings CCAA - 36, AS AMENDED

eedings ctive definition inthe glossary ctive definition

Court FileCourt No.CV Imperial’s

was issued by th by issued was icuig the including ,

ad h related the and ,

liabilities, liabilities, specifically the ARRANGEMENT OFARRANGEMENT

is - 19

Quebec Appeal Appeal Quebec Court

- hl hv the have shall 616077

hpe 15 Chapter .

Appendix Appendix on March on

- 00CL ,

9. D. 8. 7. 6. 5. C. 4.

t peaain Ftr oine fnnil nomto rpre o rle o in on relied Imperial on based is Report preparing this or reported information financial oriented Future preparation. its or accuracy the in on reliedor Report this in containedinformation the on assuranceof formother verify to attempted otherwise completeness of the information. Acc or reviewed audited, not to advisors and management senior the others, among f and upon reliedhas Monitor the Report, this Inpreparing OFTERMS REFERENCEA http://cfcanada.fticonsulting.com/imperialtobacco available onthe All is providedinthe Further information regarding these Imperial’s business andvalue. preserving for vital be to continue and been have functions and services These wide range and ofservices, r licences Imperial well as certain non distributes of sale businesses: to Imperial BACKGROUND Report Court full A Court

rcss rprd by prepared orecasts

in these in

listing as oac Products Tobacco

is the largest distributor of largest the distributor is is highly integrated with integrated highly is

Appendix “B”.Appendix materials filed Tobacco Products Tobacco

bacco and logistics. The tobacco business includes the marketing and of CCAA

Monitor the previous orders made by this by made orders previous the Monitor

- tobacco products andservices. Proceedings

’s website at:’s and orders issued

’s Reports.

s el as well as meil n discussions and Imperial

and

ND DISCLAIMER Vapour Products Vapour BAT - CCA TobaccoProducts

can be found in the schedule attached to this to attached schedule the in found be can 2

ordingly, the Monitor expresses no opinion or ights provided bycertain provided ights of

aor Products Vapour and its affiliates. its and A Proceedings ’s

in these in these m anagement’s assumptions regarding assumptions anagement’s .

CCAA

Court

for tobacco manufacturers, tobacco for certain

in Canada and operatestwo Canadaand in

Imperial n correspondence and and

Te oitc business logistics The . Imperial and the and Proceedings Imperial financial information financialinformation .

The Monitor has Monitor The BAT

US Bankruptcy US benefits from a a from benefits ’s background ’s affiliates. ’s affiliates.

are are

with

as ,

12. E. 11. 10.

viii. vii. The purpose of this Report is to provideThe isto th purpose ofthisReport PURPOSE OF REPO THIS which can found here. be in read be should Report This Canadian Dol in expressed are herein contained amounts monetary all stated, otherwise Unless material. future events; actual results may vary from the forecast and such variations may be iii. vi. iv. ix. ii. v. i.

February 3 the Cash Flow Forecast for the endingFebruary 2,20 20 the for results flow cash actual to budget Imperial’s c impacting Imperial an update on an update onthe proceedings; Court the connection with of status the and p Regulations Tobacco new the ertain cash management ertain management cash roducts lars. Ryder Settlement;

s uies ciiis idsr dvlpet ad trends and developments industry activities, business ’s ;

Imperial , 2020 through theweek, 2020through of the Mediation

Imperial the BAT MXAgreementthe BAT ’s business RT

conjunction with the with conjunction

20;

s amn olgtos to obligations payment ’s -

agreements with 3 ;

;

35 is -

week period commencing the week of Court

September 28, 28, September

euain gvrig vapour governing regulations with information regarding: ;

February

BNS

and HSBC; and

Thauvette Aff Thauvette 2020; BAT -

ek period week

Mexico idavit idavit

16. 15. G. 14. 13. F.

xiii. xii. to with with work to continues Monitor The Par Mediation the information haveApplicants The M UPDATE ONTHE representation representation counsel appoint to appropriate was it that held Court the which 2020 3, January On Counsel representativecounsel. as Wagners appointed which Claimants the seeking O U xi. x. n PDATE information

ticipants December

financial and other information information other and financial

in part in Order . On December

h Mntrs omns n rcmedtos n respe in foregoing matters. recommendations and comments Monitor’s the September I Report the date of theSixth 2019, 26, November since counsel its and Monitor the of activities the IHGIthe funding Plan shortfall ON pra’ rqet o a Odr e Order an for request mperial’s who haveexecuted to assist Mediation Participants in their due diligence with respect to respect with diligence due their in Participants Mediation assist to ponmn of appointment . ,

is requests 6 can be found found becan C The because n te ot fiin ad cost and efficient most the and , 2019, the the 2019, ,

the appointment offirm athe appointment single law OURT Data Ro Data , the Court released the released Court the ,

continued to populate to continued 30 . EDIATIO

the TRW Claimants are vulnerable individuals requiring requiring individuals vulnerable are Claimants TRW the P 2020; 9, 2019, the Court issued a ROCEEDINGS Court

oms are accessible only to the to only accessible are oms here Wagners

and NDAs .

N heard a heard

4 Imperial relevant to these proceedings and to respond respond to and proceedings these to relevant ;

. -

as representative counsel for the TRW TRW the for counsel representative as payment

joint the Imperialthe xtending

Representative Counsel Representative to populate the populate to

motion - s fetv wy o rvd this provide to way effective ; Representative Counsel

A copy of the copyof A .

h Sa o Poedns to Proceedings of Stay the

Wagners as repr as Wagners Data R Data of the Tobacco Monitors Tobacco the of

advisors Imperial Data Room ImperialData oom Representative

with financial with of Mediation of

Reasons t f the of ct esentative esentative

Order , in , ,

20. 19. 18. H. 17.

BAT in the Group Com Chief Officer G BAT the has Monitor the Report, Sixth the the role of In return tohistoric expects Imperial and complete largely is packaging plain to transition The destruction. for Imperial to Products Tobacco of as packages Regulatio Tobacco disbursements. and receipts of timings and levels historic Imperial Products, Tobacco bra certain of sale accelerated the and below described Regulations Tobacco Monitor The sold experiencing be As AND IMPERIAL Tobacco Claims. Mediation confidential, and Applicants the with discussions Monitors, Tobacco Court the Report, Sixth the Since

the Sixth Report, t the Sixth noted . Thistrend has continued

TRENDS IMPACTINGTRENDS IMP at

in t in

Imperial

Chief Executive Officer mercial Officer Officer mercial ih ve t facilitating to view a with roup

’ he the Monitor can report that that report can Monitor the BSNS ACTIVITIE BUSINESS S has been has Monitor’s , eray , 00 T 2020. 7, February a higher than higher a

levels and , US

effective May 2020. Mr. Fragnito is currently the ns, he Monitor a continued has . Mr.

advised by Imperial that due to the implementation of implementation the to due that Imperial by advised in thecomingin weeks. ealr cae slig oac Pout i branded in Products Tobacco selling ceased retailers Sixth Joe at R.J. at

xeine tmoay short temporary, experienced

historic

to the date of Report this Fragnito

Report, reported

Reynolds been advised that Ms. Be Ms. that advised been at Imperial A -

ppointed Mediator, with the assistance of the the of assistance the with Mediator, ppointed 5 ERIAL to conduct conduct to he retailers will will retailers he

downward trend in the volume of cigarettes of volume the in trend downward -

the timing of receipts and disbursements to disbursements and receipts of timing the

a stakeholders. t il sue h rl of role the assume will he the parties parties the that pan , NUTY DEVELOPM INDUSTRY S,

tobaccoindustry Tobacco Company Tobacco ’ , effective May 2020

S BUSINESS S - Ms. Canadian Canadian

h Mediation the SorayaBenchikh are conti are

lhuh the Although return .

lbl eteet f the of settlement global

nchikh will be leaving be will nchikh -

em aitos from variations term nuing in Canada in any As required by the the by required As , an affiliate of the the of affiliate an ,

. he Executive Chief unsold branded branded unsold and engage in in engage and However, However, s

to advance the the advance to would President President and eito is Mediation

appears to appears

assume ENTS nded ince the

23. 22. I. 21.

that needor extended onan toberenewed ongoing basis. cred has also Imperial hasof credit. been order date. soughtto Nosuch forBNS secure under aofobligations infavour to itsoutstanding its charge letters credit at discretion; its and (c)Imperial, att of letters additional issue will BNS (b) BNS; with accounts its in maintain must letter agreement: (a) a letter restated entere Imperial 2019, 29, July On obligations. tax and Imperial’sby issued byBNS of secure andletters credit to pension BNS certain of BNS CCAA Proceedings, on May 22, As previously inthe Fifth disclosed Report, following thecommencement of C Cash Flow Forecast Imperial, by necessit the with th time Tobacco the under requirements T Mexico million, $8.2 approximately options, various considering a acquire to needImperial would Regulations,plainpackaging Tobaccothe of implementation fall the In e qimn is equipment he ASH it issued by HSBC to secure certain of Imperial’s pension and tax obligations tax and pension Imperial’s of certain secure to HSBC by issued it

to amend the ter

e equipment will be destroyed be will equipment e MANAGEMENT y and business rationale for this to acquire used slide and shell p shell and slide dtoa eupet o te rdcin f eti cigarettes certain of production the for equipment dditional of and approves of the transaction the of approves and

greement with BNS. U BNS. with greement 2019

cash management agreements with HSBC including letters of of letters including HSBC with agreements management cash o e used be to .

the the parties will amend the minimum cash balance that Imperial ms of certain cash management services provided Imperialto Ipra avsd h Mntr ht s rsl o the of result a as that Monitor the advised Imperial ,

equip ackaging

ment meil nee it a ae transaction sale a into entered Imperial including purchasing new equipment at a price of of price a at equipment new purchasing including

o to er utl h sie n sel p shell and slide the until years two for

2019, Imperial entered into a letter a Regulations are implemented in 2021, at which at 2021, in implemented are Regulations

at -

requirements

6 its its depreciated net book value of

and replaced and - nder the terms of the amended and restated restated and amended the of terms the nder

purchase, as well as the consideration paid he request ofBNS, obtain will an order . This transaction This

. The Monitor has reviewed the reviewed has Monitor The

with equipment that complies complies that equipment with

it a aedd and amended an into d is reflected in the in reflected is greement with

$6.7 ih BAT with ackaging

million . After the se .

26. 25. J. 24.

million out $ approximately was the for inflow cash net actual Imperial’s asof Septembermillion 16 an Imperial’s cash balance as of the week ended E R Thauvette Affidavit. Details regarding theletter a existing HSBC with accounts its in maintained letter a o tax and pension Imperial’s of certain secure to HSBC by cre of letters and Imperial to provided services management cash the to on November 19, of terms the accordingly, and reached was terms amended the to as agreement An agreements. amend into to entered Monitor, HSBC the with with consultation discussions in Imperial, 2019, of fall the In NDING ECEIPTS flow of$ increase

greement, cashImperial hasagreed ofminimum be that must tothe amount , as below: summarized

letters of credit

EBRUARY over the 20 the over 29.5

AND

million, 2019, Imperial entered into a letter a

D 43.0 ISBURSEMENTS , and may -

week period from the beginning cash balance of $ of balance cash beginning the from period week 2 this results this

, 2019. million. million. 2020 greement inparagraph are outlined

at discretion, its issue additional letters of -

When 7 in a

- ,

and HSBC has agreed to renew or extend or renew to agreed has HSBC and

20 positive

- compared to the forecasted net cash cash net forecasted the to compared week period week February 2 THE FOR

variance ofapproximately$ greement with HSBC relating

eti cs management cash certain , 2020 was

ending February 2 February ending

20 bligations. Under the the Under bligations. - WEEK 10

of the February $869.0

PERIOD dit issued dit million,

, 2020 , credit. 825.9 72.5 72.5

27.

(CAD$ (CAD$ in thousands) VARIANCE REPORT

RECEIPTS

DISBURSEMENTS Operating Operating Disbursements

Total Operating Disbursements

OPERATING CASH FLOWS

Financing Financing Disbursements

Restructuring Disbursements

NET CASH FLOWS

CASH

ENDING CASH

Trade Receipts

Taxes and Taxes Levies Operations

Interest and Related Fees on Existing Facilities on Existing Fees and Related Interest

Professional Fees Professional

Beginning Balance Beginning Net Cash Inflows / (Outflows) Cash Net Inflows

follows: significan The ii. i.

trade receipts driven by the timing of lower than forecasted corporate income tax tax income instalments paidduri corporate forecasted than lower of timing the by driven levies and taxes current period; reporting the given business approximat of were course collections ordinary forecasted the of part as forecast, the t budget to actual variances and corresponding explanations are as as are explanations corresponding and variances actual to budget t : positive timing variance of $10.2 million or 0.5% against pstv tmn vrac o $66 ilo, primarily million, $26.6 of variance timing positive : ng current reporting the period

(1,485,865)

(1,865,634)

Actuals

1,910,069

(379,770)

For the 20-week period ending

825,943

868,966

44,435

43,023

(8,061)

6,649 l $,0 mlin vr the over million $1,900 ely

Feb 2,Feb 2020

Forecast

(1,512,508)

(1,925,041)

1,899,910

(412,533)

825,943

796,435

(25,131)

(11,664)

(29,509)

(29,509) ;

7,286

Variance

10,159

26,643 32,763 59,406

69,565

72,531

72,531 72,531

3,603

(637)

30. 29. 28. K.

ihn hs eid hc ae oeatd o ae eaie prtn cs flows. cash operating negative have to forecasted are which period this within duringare positive th cashAlthough flows net flow isforecast be to approximately $ $ approximately of disbursements fees professional $ approximately paragraph in $521 $2,724 $3,245 During the Forecast Period, total operating receipts Report. to this week of the Imperial, with the assistance FORECASTCASH FLOW iii. iv.

million. million. This includes -

week period commencing the week beginning February 3, 2020 through the million and total operating disbursements are forecast to be approximately be to forecast are disbursements operating total and million million, resulting in resulting million, September 28 the future as outstandingare forecastperiods invoices paid. $ approximately of variance permane positive fees professional future the in forecast period; and levels historic to return to expected is that regulations build short and requirements capital working increased to due variance 40 plain new by obsolete write the for Mexico BAT primarily driven by the deferral of the $55 million forecasted payment to operating

f this of

40 - p f netr a a eut f h tasto t plain to transition the of result a as inventory of up 15

below. In addition, Imperial forecasts interest income of of income interest forecasts Imperial addition, In below. million in respe in million

disbursements eot wih s hn atal ofe b a eaie timing negative a by offset partially then is which Report, , 2020. The Cash Flow Forecast is attached as Appendix “ pstv vrac o $ of variance positive : the potential t aine f $ of variance nt of of the Monitor, has pre a

net positive operating cash flow of approximately of flow cash operating positive net - packaging regulations, as discussed i discussed as regulations, packaging - pstv tmn vrac o $28 million, $32.8 of variance timing positive : ct of cash balances on deposit in Canada and and Canada in deposit on balances cash of ct

9 521

- 1.0 - f o machinery of off

intercompany payments

million. million. million, million, 2.6 million million 2.6 e Forecast Period, there are 9 there are Forecast Period, e

are forecast to be approximately which is expected to reverse in reverse to expected is which pared a 3.6 million million 3.6 15

million, such that net cash cash net that such million,

n packaging and

n a oiie timing positive a and Cash Flow Forecast for ht osss f a of consists that that are discussed

n - packaging paragraph

rendered

w - t eeks erm C ”

33. 32. 31.

believe,aspects, inallmaterial that: to it causes that attention its to come has nothing review, Monitor’s the on Based presentationFlow ofthe Forecast. Cash preparat the and assumptions the for management Imperial’s by provided with the purpose of the Cash Flow Forecast. The Monitor also reviewed the support respect to the assumptions were limited to evaluating whether they were consistent Monit The assumptions. underlying its and Forecast Flow Cash the to related discussions and procedures analytical inquiries, of consisted Forecast Flow Cash the of review Monitor’s the standard, the with accordance In statutory its fulfilling Monitor responsibilities under the CCAA in respect a for standard a include Practice Professional its to as statement Canadian Association of Insolvency flow and Restructuring Professionals’ Standards of cash debtor’s the rep a file to and reasonableness review to monitor a requires Court a of required standard the to Forecast Flow Cash the reviewed has Monitor The offset thereceiptcash by positive of the month. of flowsduring theremainder the m around or on fall that weeks the in flows cash such, As month. each of end the at due levies government and taxes of payment the of timing the by driven largely are These iii. ii. i.

- pone mntr y eto 2()b o te CA Scin 23(1)(b) Section CCAA. the of 23(1)(b) Section by monitor appointed the assumptions are not consistent with the purpose of the Cash Flow Cash the of purpose the with consistent not are assumptions the the Cash reflect Flownot Forecast the assumptions does basis forForecast; theCash Flow or reasonable a provide not do Imperialor of plans the with consistent and at as Forecast; onth the date of this Report, the assumptions are not suitably supported supported suitably not are assumptions the Report, this of date the - end tax payments are expected to be negative, which are then are which negative, be to expected are payments tax end

ort with the Court on the Monitor’s findings. The The findings. Monitor’s the on Court the with ort -

its its report on the Cash Flow F

rs rcdrs with procedures or’s .

orecast. ion and and ion

39. 38. 37. 36. L. 35. 34.

h nw aig r vaping new the As noted in the beingconsideredand implemented across Canada. cha regulatory various the summarizes Report this to “D” Appendix scrutinyglobally As ofVapourThe Products Regulation Imperialto for destruction. on November 9, 2019 Imperial to 2019 9, November As The Tobacco Regulat NEW TOBACCO and may readerscautioned thatit are for purposes. notbeappropriate other The Cash Flow Forecast has been prepared solely for the purposes described above, Report. pres information financial the of accuracy the to respect with assurance of form other or opinion no expresses Monitor the addition, In achieved. be will Forecast Flow exp Monitor the Accordingly,material. be could variations the and occur, assumptions the if even presented information the from vary will results actual events, future regarding assumptions on based T the in described As

use plain, unbranded packaging. unbranded plain, use

February 7, 2020. 2020. 7, February icse i te Sixth the in discussed noted ented in the Cash Flow Forecast

c ease n the in d

Sixth

selling branded Tobacco Products Tobacco branded selling

resulting and instringent regulation gltos wl pbiie hat cnen ad h increased the and concerns health publicized well egulations, . Sixth . These regulations These .

R A

etailers cease Report, the Monitor has been advised by ND VAPOUR REGULATION Any ions ions erms of Reference above, since the Cash Flow Forecast is is Forecast Flow Cash the since above, Reference of erms

eot the Report,

products products

Report, d -

not sold sold not aor p vapour 11 or relied upon selling Tobacco Products with accordance In

Tobacco

require manufacturers of Tobacco Products Tobacco of manufacturers require - resses no assurance as to whether the Cash the whether to as assurance no resses

by February 7, 2020 7, February by roducts are coming under increased increased under coming are roducts euain came Regulations

by the Monitor in preparing this

to wholesalers and retailers on retailers and wholesalers to ,

S in somecases

the Tobacco

in branded packages Imperial that, due to ,

will

, no oc on force into

bans nges that are that nges Regulations

. return

ed ,

42. N. 41. 40. M.

settlement. settled. been Imperial’s Tobacco Products and Imperial services of from and volume short experienced Imperial of implementation the Following RYDER SETTLEMENT payment being made. payments is Monitor The in the Cashandforecasted Flow September Forecast in tobe2020. paid reflected currently is amount payment the and date to made been has payment No respectively. 2020, January and 2019 December in paid be to forecasted and 2019 Septem on Report Fifth Monitor’s the in Court the to submitted was that forecast flow cash the in reflected was million $55 of amount payment estimated to billed be will due packaging for used be longer no can that rendered obsolete by the for Products Tobacco wrap and package to used equipment BAT to will berequired Mexico Sixth the in described As B UPDATE ONPROPOSED level offuture p vapour of scrutiny

the normal volume and timing of deliveries resulted in an increase in the scale n udryn documents underlying and

provided by Ryder. Subsequently, Ryder. by provided accelerated sales of certain branded Tobacco Products. Tobacco branded certain of sales accelerated h Mntr a inf was Monitor The Ryder sale of sale

con Imperial roducts globally, there is a high level of uncertainty as to the to as uncertainty of level high a is there globally, roducts ,

iun t work to tinuing vapour p vapour

h vno rsosbe o te eiey n logistics and delivery the for responsible vendor the Tobacco

Report, the Monitor has been advised by advised been has Monitor the Report,

- ne te em o te A M Agreement. MX BAT the of terms the under em netr fluctuations inventory term ,

as totheamount due toRyder roduct AT

write the manufacturing cost undepreciated off of

the Tobacco Regulations Tobacco the Regulations, Regulations, as well as some wrapping materials

- MEXICO PAYMENTS

12 re o te ipt ad ocr wt the with concurs and dispute the of ormed s

n wl rpr t te or pir o any to prior Court the to report will and -

ih meil to Imperial with

to the to a payment dispute dispute payment a Tobacco

as a result of increased increased of result a as review on November 9, 2019, 9, November on . Imperial

This dispute hasThis dispute now Regulations which Regulations

these arose arose

that has been been has that Imperial This change This

proposed between ber 25, ber

The The that

of of

48. 47. 46. 45. P. 44. 43. O.

matters sought includingrelief herein. the counsel their and Monitors Tobacco The the Mediation. meetings attended stakeholders regularly also has Monitor The responding The Monitor expected toimpact future its business prospects. ( vendor and (b) activities; business meetings and/or discussions with Since the date of the OFOVERVIEW MONI THE USD total to actuary independent the by determined were 2020 in payable determ is any) (if contributions IHGI the to contributions annual makes ITCAN Inc.Systems Merchaand Fast Food 1 approximately “C” thereto, is a M the in described liabilities various holds also IHGI companies. various of restructuring and acquisition historical the of result IHGI IHGI f )

further their understanding of Imperial’s business environment and environment business Imperial’s of understanding their further review

, for which the payment was, for made which inJanuary thepayment 2020.

is a foreign subsidiary of ITCAN and holds certain legacy obligations as a as obligations legacy certain holds and ITCAN of subsidiary foreign a is PENSION and stakeholder stakeholder and

to Information to be included in the Imperial Data Room; Room; Data Imperial the in included be to Information

and has has information requestsinformation from stakeholders.

,556 former US former ,556 US

has has as PLAN CONTRIBUTIONS arch Thauvette Affidavit at Sections 25(a), 54, 64, and Exhibit Exhibit and 64, 54, 25(a), Sections at Affidavit Thauvette arch sisted Imperial preparing sisted in

tax Six provided provided the Mediator with information necessary to advance

- monitor Imperial’s receipts and disbursement and receipts Imperial’s monitor th Report qualified inquiries icuig the including , ined by an independent actuary. independent an by ined TOR’S ACTIVITIES ACTIVITIES TOR’S

, registered Imperial and employees of Genstar Company, Hardee’s Food Hardee’s Company, Genstar of employees , ;

t - he (e

ndisers Inc. ndisers 13 )

Monitor

eiw rpsd aia expe capital proposed review -

have met have

defined benefit pension plan HI Plan IHGI

its its couns

and and its counsel have held the

Plan

five

; regularly

the quantum of the required required the of quantum the el to: (a) -

year financial forecast .

with h IG Pa, further Plan, IHGI The

to discuss ongoing discuss to h Mdao and Mediator the monitor monitor The contributions The nditures; $3.4 million $3.4 s (

; (c) ; the d) address address d) Imperial’s numerous numerous

covering covering

factors gather

and and

52. 51. 50. 49.

iiain litfs eadn poesoa fe icoue Prun t the to Pursuant disclosure. fee Professional professional regarding Plaintiffs Litigation cou Monitors, As described in Professional Fee Disclosure public other various and Provinces) of information. Consortium the of brief mediation Dr. of report the on solely Proceedings o scope the outside are Canada Statistics and Provinces of the request Similarly, advised thathasnotmade it any changes Proceedings. CCAA Tobacco the of scope the outside fall communications between Ontario and Statistics Canada are matters of co Province the regard, this In Health. of Ministry the to request a such make to directed counsel and Canadacommunications, Statistics producethe dated letter a In with respect issue. this to Provinces the Canadaand betweenStatistics communications review abilitythe to claims Provinces’ releva potentially is Provinces: counsel to letter a sent each Rothmans and Inc. International Mail & Globe the in described As Communications Canada Statistics

in a letter dated

(a and and . Fee Disclosure )

T confirming confirming sl o ah f meil JTI Imperial, of each to nsel he Consortium of Provinces stated that theythat statedof Provinces Consortium he

asserted that communications between members of the Consortium

ril pbihd n coe 8 21, one t Phillip to counsel 2019, 8, October on published article the Fourth Report, an agreement December 20, 2019 20, December asserted in the Tobacco CCAA Proceedings CCAA Tobacco the in asserted t o h Poics actions Provinces’ the to nt Sixth

that the Provinces will not return or remove any data that

December 20, 2019 Report, the Monitor understands that in response to a to response in that understands Monitor the Report, Order

ln Hrio (hc ws pedd o h reply the to appended was (which Harrison Glenn , , which can be found here, the Tobacco Monitors -

t he Province of Ontario of Province he

to its datato its retention policies. M

the

w and Rothmans, and the Quebec Quebec the and Rothmans, and

Consortium Consortium of Provinces as reached between the Tobacco gis te plcns and Applicants the against Moreover, t Moreover, currently intend to relyto currentlyintend f the Tobacco CCAA Tobacco the f

denied the request to request the denied to the Consortium of Consortium the to ;

an assert d

( b

) requesting requesting ) he Province Province he ed ntract ntract and that any that

Morris denied

the

55. 54. Q. 53.

(b) (a) reasons: following the for Proceedings of Stay the of extension an supports Monitor The Tobacco Claims. a plan of compromise or arrangement for the pan Court the by business in the ordinary course as it the operate to Imperial for necessary is extension such that understands Monitor Imperial OFPROCEEDINGSSTAY 2020, of months the during Professionals of the restructuring fees incurred on or after March 12, 2019 and paid to the CCAA and Plaintiffs Professional On the prior month. and fees the 2019, June broke Professionals, of CCAA the of each to paid disbursements month the with commencing month each of day Imperial’s service list who request this information in writing, on or Litigatio Quebec the provide to agreed

December December

respectively. settlement Claims; oftheTobacco Court is Imperial Imperi

is seeking an extension of the Stay the of extension an seeking is - Fee Disclosure Order, the Monitor the Order, Disclosure Fee - Appoin pone Mdao i a efr t rah pan a reach to effort an in Mediator Appointed al is acting in good faithal and acting is withduediligence; in oth 11

, 2019, January 2019, , er parties who parties er

continuing to engage meaningfully in the Mediation with the with Mediation the in meaningfully engage to continuing ted Mediator and as it continues to work towards developing developing towards work to continues it as and Mediator ted

requested such information, a summary, by firm, firm, by summary, a information, such requested 14 - continues

, 2020, and February 10, 2020, 10, February and 2020, , November 2019, November 15

Panif ad uh te pris on parties other such and Plaintiffs n

to engage Period

- provided to the Qu the to provided Canadian global settlement of the

December to

in the Mediation conducted

September 30 September

n down by firm, for for firm, by down n

2019 and January and 2019 - aain global Canadian ebec Litigation ebec pursuant to the to pursuant before before the 15 , 2020. The 2020. , th

in its capacity as Monitor of Imperial Tobacco Canada Limited and Imperial Tobacco Tobacco Imperial and Limited CompanyLimited Canada Tobacco Imperial of Monitor as capacity its in Inc. Canada FTI Consulting Dated this The this totheCourt respectfully Monitor submits Report.

(d) (b)

no creditor will granted. bematerially is extension prejudiced ifthe theStay to extension Proceedings of proposed the through course normal the in operate to continue to funding the day of

Cash Flow

February Forecast , 2020

reflects Imperial that is projected to have sufficient -

; and

“ capacity Claims. as HCCR a plaintiff inthe and Island Edward Prince of Province Manitoba, of Province “ was “ 2019, for relief under Chapter15of the “ asserts solicitor r has Imperial properly Imperial work whose of respect in advisor financial any for except Proceedings, advisor financial any and “ Imperial CCAA under the “ amended. “ the week of the fordisbursements “ “ ITCAN. andMexico “ “ and Carreras Rothmans Limited or entities related to or af Limited, (Investments) Tobacco American British p.l.c., Industries B.A.T p.l.c., Finance “ Stock “ “ Court Provinces of Consortium Comeback Proceedings 15 Chapter Professionals CCAA Proceedings CCAA CCAA Cash BNS BAT MX Agreement MexicoBAT Group BAT BAT Applicants

the ITCANthe Subsidiaries. heard onheard April 4, ” meansBankof Nova The Scotia. ” means British American Tobacco p.l.c., Tobacco American British means ” Exchange. ” means the Ontario Superior” the of Ontario means Court JusticeList). (Commercial lw Forecast Flow mas the means ”

September 28, 2020. 28, September ” means, collectively, Imperial,” means, collectively, JTI Motion ” means” ” means British American S.A.deBritish C.V. Mexico Tobacco” means - client, settlement, litigationclient, or other settlement, privilege.

” means

opne’ rdtr Arneet Act, Arrangement Creditors Companies’ , 5 35 means ” ” means the Monitor, counsel to the Monitor, counsel to Imperial, to counsel Monitor, the to counsel Monitor, the means ” the ” means the BAT MX Agreement dated July 2, 2015 between BAT collectively, British American Tobacco p.l.c., B.A.T. InternationalB.A.T. p.l.c., Tobacco American British collectively, , mas h cs fo frcs o Ipra’ rcit and receipts Imperial’s of forecast flow cash the means ” - 25 wee .

” means ” Province of New Brunswick, New of Province

and 26 ” means, collectively, means, ”

k period commencing the week of week the commencing period k the Comeback asdefined Motion, Initial inthe Order, which

or Fl No. File Court , 2019.

the APPENDIX GLOSSARY proceedings commenced by commenced proceedings the US Bankruptcy Code

Province of Saskatchewan of Province

etained in connection with these CCAA CCAA these with connection in etained M

“ a public company listed on the London the on listed company public a

and Rothmans. CV A the Province of British Columbia, Columbia, British of Province the

” filiated filiated with

- 19 the - 616077 Province of Nova Scotia, Nova of Province .

February 3, 2020 through2020 February3, ... 95 c C c. 1985, R.S.C. them them other than -

00CL ITCAN , in ,

omne by commenced each

on March 13, March on p rovince’s

Imperial - 36 as , the the the

“ “ and theuse ofTobacco Products. smoking with associated costs care recoverhealth legislation,to recovery cost carehealth “ “ “ “ in the aga proceedings staying and proceedings main the as Proceedings CCAA the “ throughweek the of “ and Chief “ the relief sought attheComebackMotion. “ restated April 5,2019. as of “ “ “ the Sixth as herein sought relief the of purposes the “ “ information, whichthe Tobacco considered Monitors relevant. which are responsive to requests submitted by Participants, Mediation “ th neutral settlement a as and Court the of officer an “

I HSBC HCCR Genstar FTI Fourth Report Order Recognition Foreign Period Forecast February First Report Order Initial Restated and Amended First Fifth Report EY Excluded Claims Deloitte Rooms Data Court H G ” & means Young Ernst ” I US

” means means FTIInc. Consultingmeans Canada - ” meansBank Canada. HSBC Appointed Mediator Appointed

Claims ” DeloitteInc. means Restructuring . Report. ” means

Financial Officer of Imperial,Financial Officer February of sworn in the c

Thauvette Aff Thauvette ” ” mas aa om cnann Ifrain n epc o te Applicants the of respect in Information containing rooms data means ”

ImascoInc.Holdings Group means the report filed by the Monitor on filed report by theMonitor the means means the reportmeans M the filed by the ” ”

” means ” means means the claims star ontext ontext of these means the report 24,2019. means on June filed by theMonitor Genstar Corporation, a subsidiary of ITCAN. Corporation,Genstar a subsidiary of ” means the claims excluded from the definition of TRW Claimants for

September 28, 2020.

the idavit

Inc ” means the means” ” 35

means . -

” Tobacco

week period commencing period week means the affidavit of Eric Thauvette, Vice President Vice Thauvette, Eric of affidavit the means

ted ted by each of the Provinces an order of the US Bankruptcy Court Court Bankruptcy US the of order an

Honourable Warren K. Winkler Q.C., acting as Q.C., Winkler WarrenK. Honourable CCAA Proceedings.CCAA -

described in paragraph in described

2 r party ird

- ” means the Initial Order, as amended and and amended as Order, Initial the means ”

onitor on September 25, 2019. onitor

o eit a mediate to

13 April 3 , 2020. the week of of week the

, 2019

under under each Province’s pan

of Appendix “C” to “C” Appendix of and as well as other

in connection within connection - February 3, 2020 2020 3, February aain global Canadian

inst ITCAN inst

recognizing

Marketing Board. Flue Ontario the and plaintiffs”, action class light “tobacco the Plaintiffs, Litigation Alberta, of Provinces “ “ Imperial,Chief Financial 12,2019. Officer March of sworn “ extending Stay thelengthProceedings March ofthe of 12,2020. to “ the lengthProceedings 28,2019. Stay ofthe toJune of “ “ “ with them other than en or Limited Canada of Company Tobacco Ltd., Myers & Liggett Insurance Southward Inc., Holdings Imasco Corporation, Pacific Genstar limited, (USA) ITL Inc., Group, Holdings Imasco and Corporation, Genstar Inc., Romir Construction Ramsay Allan Inc., Medallion ImperialBrand Inc.,Ltd., Sons & Player Limited,John Company Cameo Limited, Canada Marlboro Limited, “ “ Imperial’sappointment as of Monitor CCAAProceedings. 2019, amendedof April and restated5,2019and as further ame “ information to responsive are which “ “ “ which w approximately 1,556 former US “

eito Participants Mediation Mediation Thauvet March March June Stay Extension Order JTI JTI ITCAN Subsidiaries ITCAN Order Initial Information Imperial Data Room Imperial I H G M M

I Plan hc atoie, mn ohr hns te ty f rceig ad FTI’s and Proceedings of Stay the things, other among authorized, which ” Group

asDecember 2018. effective as terminated of 31, means JTI ” Stay

” collectively, means mea

”mediation meansprocess the by conducted the ” means the US which theTobacco considered Monitors relevant

” means means ” Extension Order Extension ” ns mas h iiil order initial the means ” means Imperial TobaccoLimited. Canada te Affidavit te

- Macdonald Corp. Macdonald

the ImperialBAT andthe Group. ” ” means a data r efudad n Lbao, nai, n Qee, h Queb the Quebec, and Ontario, Labrador, and Newfoundland the entities omn aeois of categories common means “ requests submitted by submitted requests personal injury class action plaintiffs action class injurypersonal ” means the Applicants, the Consortium of Provinces, the the Provinces, of Consortium the Applicants, the means ”

tax qualified, registered defined benefit pension plan coveri ” ” means an order of the ” means the affidavit of Eric Thauvette, Vice President and and President Vice Thauvette, Eric of affidavit the means ”

Imperial Tobacco Services Inc., Imperial Tobacco Products

employees of certain of Imperial’s predecessor companies, ITCAN ”

currently or formerly means an order of the Court, dated October 8, 2019, 8, October dated Court, the of order an means

oom containing Informationoom containing in respect Imperial.of and Imperialand TobaccoLimited. Company

granted -

information information eito Participants, Mediation by this Court Court this by

Court, Court, dated April 5, 2019, extending

rela nded and restatednded as ofApril 25

ted ted to or affiliated with JTIM. n epc o te Applicants the of respect in s Ltd., 2004969 Ontario Inc., Ontario Ltd.,2004969 s Court .

tities related to or aff or to related tities ” representedby” Merchant - Cured Tobacco Growers Tobacco Cured n ac 1, 2019, 12, March on -

Appointed Mediator Appointed s ela other as well as

iliated iliated ng ec ec . as

, ,

de class certified “ $10.6 billion. co action” and the “Blais action” released on May 27, 2015 in which the trial judge found the “ payable amount onthe total claim adjusted, was schedule interest the (ii) and million; $1 over just by the upheld substantially reduced was Appeal amount claim total the (i) modifications: notable two with Judgment Quebec of Court the whereby Judgment Quebec the of appeal “ “ 2019. 15 the before or on Monitor the by Proceedings CCAA these in fees restructuring professional the of disclosure the things, other among “ for under relief the CCAA capacity as proposed Monitor of Imperial, in connection with Imper “ other thanwith it, Rothmans. “ “ extending thelength of “ Represented the to Hearing Parties, among things. other Approval Settlement the of notice of manner and form the “ Room “ Second Report “ “ “

Quebec Litigation Plaintiffs Litigation Quebec Judgment Quebec Judgment Appeal Quebec Provinces Professional Pre PMI Group PEI Order Extension Stay October Procedure Notice NDA Reports Monitor’s Monitor Merchant - scribed inthe defendants jointly liabl jointly defendants - ” means Prince Edward Island. Edward ” Prince means

iig Report Filing s ” means a non a means ” .

” FTIConsulting means CanadaInc. ” means ” means Merchant LawLLP.means Group Merchant

” means , Fee Disclosure Order Disclosure Fee members members the Third Report March

all of theprovincesall of ofCanada. Order mas h rpr fld y h Mntr n ac 1, 09 i its in 2019, 12, March on Monitor the by filed report the means ” ” means the Quebec Superior Court’s judgment on the “Letourneau the on judgment Court’s Superior Quebec the means ” - mas olciey the collectively, means ” disclosure agreement for the purposes of gaining access to access gaining of purposes the for agreement disclosure Phillip Phillip Morris Thauvette Affidavit. the Stay Proceedings Octoberthe of to in each of the “Letourneau action” and the “Blais action”, as as action”, “Blais the and action” “Letourneau the of each in . e for $15.6 billion, with Imperial’s share be share Imperial’s with billion, $15.6 for e

” means an order of the Court the of order an means ”

” ” en the means

, means, collectively, the representative plaintiff representative the collectively, means,

the Fourth Repor .

mas n o an means ” International Inc. and all entities related to or affiliate

”

en a re fti Court this of order an means

Court of Appeal of Court -

Pre dr f h Cut dtd June dated Court, the of rder t h t,

of every month, beginning with June June with beginning month, every of

- the Fifth Report iig Report Filing , dated May 14, 2019, 14, May dated ,

, 20 of Quebec’s of 19 . the ,

ial’s initial a

and the Sixth Report reducing the interes the reducing

i which authorized, which ng approximately ng is Report First

decision on the the on decision

approving approving pplication 26 s the

and the the and ,

2019, , Data Data

the d t .

“ affiliates Limited Canada Companyof non their and Imperial “ “ and of theSettlement thedistribution amongRepresented the among other Parties, things. “ approval ofthe Settlement. “ Representatives ofthe Retirement inrespect Plans. “ “ restated April 25,2019. as of “ “ “ former Genstar surviving spouses plan Gens of employees plan income “ the under person other any and Representation Order. persons such of beneficiaries and survivors including “ Foster,court the “ Counselon Order, released “ 2019, appointing “ “

Stay PeriodStay Proceedings of Stay Sixth Order Approval Settlement Hearing Approval Settlement Settlement ReportSecond Second Amended and Restated Initial Order Ryder Rothmans Plans Retirement Parties Represented Representatives Reasons Counsel Representative Order Counsel Representative Report

for a for

Report ” means Ryder Truck Rental Canada Ltd.” Ryder Truck means Rental Canada ” means this .

pproxim

”

” means

for approximately 53 in 53 approximately for ” means the ” the means means Rothmans Benson& means Hedges Rothmans ” means employees ortheir survivingemployees spouses. - ” means thereport on April” filed24,2019. means by theMonitor appointed repappointed Wagners asWagners representativ ; and (c ” means means ” ately 14 individuals who individuals 14 ately tar or their surviving spouses surviving their or tar ”

the the settlement entered into on April 25, 2019 between ITCAN and the seventh

” en, olciey te olwn pnin pla pension following the collectively, means, ” means all persons with entitlements under the Retirement Plans, Plans, Retirement the under entitlements with persons all means ” the report filed by the Monitor on Novemberthe report Monitor filed26,2019. by the means - ) a supplementary pension plan applicant subsidiaries, including Liggett & Meyers Tobacco Tobacco Meyers & Liggett including subsidiaries, applicant term oftheStay ofProceedings,

iin Brennan Vivian January 3,2020

report of theMonit as well as well as resentatives of the Represented resentatives ofParties. the ” the sta the m mas h mto had n ue 6 21 fr the for 2019 26, June on heard motion the means ” ” means means ” eans an Order of this Court, approving the Settlement the approving Court, this of Order an eans ” means this Court’s Reasons for the Representative the for Reasons Court’s this means ” dividuals who are either former former either are who dividuals y of proceedings yof

a limited stay in favour of BAT and certain BAT certain and BAT of favour stayin limited a e to counsel the order order the - were either former Genstar employees or their their or employees Genstar former either were . - 5

Dolezar, Robert M. Brown and George A. A. George and Brown M. Robert Dolezar,

” means the Initial Order, as amended and ; or filed on or

(b Inc.

) issued

during the Stay Period Stay the during the TRW Claimants.the TRW supplem

for 3 individuals to

by this Court on December 9, December on Court this by February March 12,202 ental executive retirement executive ental

senior management senior s (a ns: , 2019

who were either

0 . ) a deferred deferred a )

in favour offavour in .

District “ “ “ Related Wrongs orint inCanada, Tobacco of respect in entities, such by indemnified persons or Group, PMI the or Group against one ormoreITCAN Applicants, subsidiaries, ofthe the the BAT theJTIM Group, provincial family law legislation) who assert or may be applicable under representatives designated and guardians litigation assigns, “ provincial consumer protectionlegislation,butd non recovery, restitutionary p indemnity, or contribution for claims limitation, without respec in representation any (iii) or Products; Tobacco o historical the (ii) Products; Tobacco of sale or purchase market importation, production, manufacture, development, “ AppearanceStandardization “ tobacco Products. orVapour products from or resulting from the use of any tobacco prod p materials, include shall and systems delivery nicotine to smokeless tobacco, own your roll tobacco, cigarette tobacco a with connection in used or of accessory or part, consum human for intended is that nicotine containing “ andRothmans, Deloitte capacity inits a “ use Tobacco of, or exposureProducts. to,the marketin Applicants the against “ 00CL under the commenced CCAA. by Rothmans 615862 “ “

S akuty Court Bankruptcy US Code US Bankruptcy US Claimants TRW Tobacco Tobacco Products Tobacco Monitors Tobacco Tobacco Claims Proceedings CCAATobacco ReportThird ”

means the United Statesmeans of America the - of New 00CL commenced by JTIM under the CC the under byJTIM commenced 00CL g, advertising of, any representations made in respect of, the purchase, sale, and and sale, purchase, the of, respect in made representations any of, advertising g, - Related Wrongs Related Regulations ” means York. ” ”

means means all claims brought or that could be brought under ” ” means, collectively, the Monitor, EY in its capacity as monitor for monitor as capacity its in EY Monitor, the collectively, means, ” means all individuals (including their respective successors, heirs, heirs, successors, respective their (including individuals all means

means tobacco or any product product any or tobacco means ”

the report filed by the Monitor on May report Monitor the filed 13,2019. by the ”

” means in relation to the development, manufacturing, production, production, manufacturing, development, the to relation in

en te ntd tts akuty or fr the for Court Bankruptcy States United the means means ” ) - , SOR/2019 euir dmgs or damages pecuniary means all claims or causes o causes or claims all means ” means”

title 11 of the United States Code. 11oftitle theUnited heApplicants, case ofthe anywhere inthe world. else The

s monitor for JTI s monitor these CCAAP these - . 17 Tobacco Products Regulations (Plain and and (Plain Regulations Products Tobacco

6 . entitled to assert a claim or cause of action as

oes include not Claims. theExcluded AA and Court File No. CV No. File Court and AA ucts, but does not include heat

lis o rcvr gone in grounded recovery for claims roceedings, made or derived from tobacco or or tobacco from derived or made t bacco, and any other tobacco or or tobacco other any and bacco, ption, including any component, component, any including ption, M roducts and by and roducts of Tobacco Products, including, including, Products, Tobacco of r ongoing use of or exposure to exposure or of use ongoing r ersonal injury or tort damages, tort or injury ersonal .

f action in action f product, including cigarettes, cigarettes, including product, ing, advertising, distribution, advertising, ing,

Court File No. 19 No. File Court

respect of: (i) the the (i) of: respect - products derived products

applicable law - 19

- - Southern not 616779 - - burn burn CV

- - -

“ are of thetradename under Vype. sold formulations liquid heat that “

Wagners Vap our

Products ” means The Law” ThePracticeInc. means ofWagner& Associates, ” means potential reduced risk, rechargeable,battery risk, reduced potential means –

e - liquids liquids

–

to create a vapour which is inhaled, and which which and inhaled, is which vapour a create to -

- powered devices powered

The NoticeO Procedure 5. the The 4. found 2019 T 3. Motion T 2. and amended further restated as of and 2019 5, April of as restated and amended as 2019, 12, March The 1. in Court Please see below for a description of the orders issued by the Court and the US Bankruptcy he he

Comeback Motion

Second Amended and Restated Initial RestatedSecond and Amended Order Foreign Recognition Order Recognition Foreign nta Order Initial oeak oin was Motion Comeback ,

here which recognizes these : NoticeProcedure Order AmendedSecond and Order Restated Initial Foreign Recognition Order (c) (b) (a) Comeback Motion: (b) (a) Order:Initial

these CCAA Proceedings.

April 25,2019 which can found be issue Court the Mediator the as appointed was Q.C. Winkler, K. Warren Hon. the the the extended Court the FTI appointedMonitor. was as the April 11,2019;and until CCAA the under proceedings of stay initial an granted was Imperial

f h Otro ueir or o utc (omril it md on made List) (Commercial Justice of Court Superior Ontario the of June StayJune Order Extension

on April 25and 26,2019 ; and rder was issued on May 14, 2019 wasrder 14, issuedonMay

, pursuant which to

er o Arl ad , 2019. 5, and 4 April on heard d the d CCAA Proceedings

: was granted by the by granted was

here APPENDIX First Amended and Restated Initial Order Initial Restated and Amended First :

Stay of Proceedings of Stay . ORDERS

;

: , a copy can, a whichfound be of

was issued following the continuationwas of issuedfollowingthe

“

. . The B ”

US Bankruptcy US :

Foreign Recognition Order and can fo be to June 28, 2019, pursuant to pursuant 2019, 28, June to

Following the the Following

Court und und Court here

on April 17, April on - , a copy of of copy a , Comeback Comeback Appointed Appointed here. .

can be

OrderCommunications T 14. Order T 13. can be found T 12. 27,2019.A June T 11. be found T 10. here Proceedings The 9. be found bet as Protocol 2019 24, May on released was Endorsement Protocol Confidentiality and Communication The 8. found Lift Insurance of Clarification The 7. The Professional Fee Disclosure Order was issued on May 14, 2019 and 6.

he he he he he Genstar

. Order Appointing a Financial Advisor October Stay Extension Order Extension Stay October US Bankruptcy Court Bankruptcy US Court

S akuty Court Bankruptcy US on July 18, 2019. A copy of 18,2019. on July here usat o which to pursuant Order theCourt Recognizing Order theGenstar Recognizing Order Approval Settlement Court aFinaOrder Appointing Genstar Order Approval Settlement October Order Extension Stay ConfidentialityCommunication and Protocol Endorsement Insurance of Clarification Lift Professional Fee Order Disclosure here here - . to

Settlement Approval Order to Oc - here . . Court Communications Order Communications Court -

ween the Court and the Court the and Court the ween -

Court Communications Order Court Communications copy which can of found be . tober 4, 2019. A copy of the

on September 5,2019. A copyon of

h Cut prvd h Cmuiain n Confidentiality and Communication the approved Court the granted an order recognizing the recognizing order an granted

granted an order recognizing the the recognizing order an granted ncial Advisortothencial Court

which can be found can found which be - was issued on issued was Stay Order was issued on May 14, 2019 and 2019 14, May on issued was Order Stay - to

was was issued on June 26, 2019. A Stay OrderStay -

Court Communications Order Court Communications to

: was issued on July 9, 2019. A 2019. 9, July on issued was

the - here

Appointed Mediator. The endorsement can can endorsement The Mediator. Appointed October Stay Extension Order Court

June 26, 2019 26, June .

- here Appointed Mediator which be can found .

Genstar - Appointed Mediator Appointed

and e and Settlement Approval Settlement xtended the xtended

can be found copy of which can

Court

copy of which which of copy

was issued on

can be found here - to

. Stay of of Stay

can be be can - Court Court

here .

here.Counsel Orderfound can be Wagnersas representativ The Representative Counse 16. here A 2020. 12, March to Proceedings T 15.

. March Stay Extension Order was issued on October 2, 2019 and extended the Stay of theStay and extended 2019 onOctober 2, wasissued Order Extension March Stay

March Extensio Stay Representative Order Counsel e Acopy counselClaimants. theTRW of to Representative l Order was issued on Decemberl Orderwas 9 issuedon n Order n

copy of the the of copy

March Stay Extension Order Extension Stay March , 2019 and appointed appointed , 2019and

can be found found be can

APPENDIX “C” CASH FLOW FORECAST

Please see attached.

Imperial Tobacco Canada Limited CCAA Cash Flow Forecast

(CAD$ in thousands) Week Beginning (Monday) 3‐Feb‐20 10‐Feb‐20 17‐Feb‐20 24‐Feb‐20 2‐Mar‐20 9‐Mar‐20 16‐Mar‐20 23‐Mar‐20 30‐Mar‐20 6‐Apr‐20 13‐Apr‐20 20‐Apr‐20 27‐Apr‐20 4‐May‐20 11‐May‐20 18‐May‐20 25‐May‐20 1‐Jun‐20 Forecast Week 1 2 345 6 7 8 9 101112131415161718

RECEIPTS Trade Receipts [2] 50,060 69,293 67,518 70,502 72,710 75,130 79,448 88,615 90,934 90,215 87,244 90,897 92,144 93,425 97,043 95,033 97,574 100,420

DISBURSEMENTS Operating Disbursements Taxes and Levies [3] ‐ (20,453) (25,469) (22,327) (102,842) (31,180) (39,773) (3,149) (109,433) ‐ (63,880) (37,982) (141,944) ‐ (78,098) (38,781) (33,826) (120,811) Operations [4] (2,890) (23,581) (3,154) (51,470) (6,846) (21,426) (3,525) (48,730) (6,766) (17,593) (12,853) (12,466) (39,170) (9,325) (17,496) (3,416) (29,153) (4,828) Total Operating Disbursements (2,890) (44,033) (28,623) (73,797) (109,688) (52,606) (43,297) (51,879) (116,199) (17,593) (76,733) (50,448) (181,114) (9,325) (95,594) (42,197) (62,979) (125,640)

OPERATING CASH FLOWS 47,170 25,260 38,895 (3,295) (36,978) 22,524 36,151 36,736 (25,265) 72,622 10,512 40,449 (88,969) 84,100 1,449 52,836 34,595 (25,220)

Financing Disbursements Interest and Related Fees [5] ‐ ‐ ‐ 1,442 ‐ ‐ ‐ ‐ 1,608 ‐ ‐ ‐ 1,770 ‐ ‐ ‐ 1,940 ‐ Restructuring Disbursements Professional Fees [6] (1,332) (408) (408) (408) (402) (402) (402) (402) (402) (408) (408) (408) (408) (408) (408) (408) (408) (402)

NET CASH FLOWS 45,838 24,852 38,487 (2,261) (37,381) 22,122 35,749 36,334 (24,059) 72,214 10,104 40,041 (87,607) 83,692 1,041 52,428 36,127 (25,622)

CASH Beginning Balance 868,966 914,804 939,656 978,143 975,882 938,501 960,623 996,372 1,032,706 1,008,647 1,080,861 1,090,965 1,131,006 1,043,399 1,127,091 1,128,133 1,180,561 1,216,688 Net Cash Inflows / (Outflows) 45,838 24,852 38,487 (2,261) (37,381) 22,122 35,749 36,334 (24,059) 72,214 10,104 40,041 (87,607) 83,692 1,041 52,428 36,127 (25,622) Other (FX) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ENDING CASH 914,804 939,656 978,143 975,882 938,501 960,623 996,372 1,032,706 1,008,647 1,080,861 1,090,965 1,131,006 1,043,399 1,127,091 1,128,133 1,180,561 1,216,688 1,191,066

Notes to the CCAA Forecast: [1] The purpose of this cash flow forecast is to estimate the liquidity requirements of the Company during the forecast period. [2] Forecast Trade Receipts include collections from the sale of tobacco‐related products and other categories, net of returns, and inclusive of sales taxes. The sales forecast is based on historica sales patterns, seasonality, and current management's expectations, including the estimated impact of transition to plain‐packaging regulations. The cash flow forecast includes certain 2020 price increases. The Company's ability to maintain the price increase is dependent on market conditions. [3] Forecast Taxes and Levies disbursements reflect the remittance of the federal excise tax, provincial tobacco taxes, sales taxes, and the Company's corporate income taxes. [4] Forecast Operations disbursements include employee‐related costs, selling, general, administrative costs and intercompany costs. Intercompany costs include costs relating to the purchase of tobacco‐related products and other categories, and services including: innovation fees, consulting and advisory fees, IT‐related costs, product development and testing, accounting and human resources. Included in the intercompany costs is a disbursement of $55 million to BAT Mexico for costs associated with the retirement of certain equipment and materials that are obsolete after the implementation of the Tobacco Products Regulations (Plain and Standardized Appearance). [5] Forecast Interest and Related Fees reflect interest income earned net of any sundry payments relating to existing facilities. [6] Forecast Professional Fees include fees for the Company’s Counsel, the Monitor, the Monitor’s Counsel, the Company's US Counsel, the Monitor's US Counsel, the US Noticing Agent, the Court‐Appointed Mediator, the Court‐Appointed Mediator's Counsel and the Representative Counsel for the TRW Claimants. [7] Due to the transition to plain‐pack regulations, the Company may experience return of certain branded tobacco products by retail customers that can no longer be sold after February 7, 2020. As a result, the Monitor understands that the Company anticipates variations from historical levels and timings of receipts and disbursements in the short term. The Company expects the timing of receipts and disbursements to return to historic norms once the transition to plain packaging is complete.

Page 1 of 2 Imperial Tobacco Canada Limited CCAA Cash Flow Forecast

(CAD$ in thousands) Week Beginning (Monday) 8‐Jun‐20 15‐Jun‐20 22‐Jun‐20 29‐Jun‐20 6‐Jul‐20 13‐Jul‐20 20‐Jul‐20 27‐Jul‐20 3‐Aug‐20 10‐Aug‐20 17‐Aug‐20 24‐Aug‐20 31‐Aug‐20 7‐Sep‐20 14‐Sep‐20 21‐Sep‐20 28‐Sep‐20 35‐Week Total Forecast Week 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

RECEIPTS Trade Receipts [2] 101,612 108,131 117,597 77,751 106,412 106,504 105,616 106,375 102,304 103,043 101,912 100,671 101,516 99,191 100,180 99,401 98,286 3,244,710

DISBURSEMENTS Operating Disbursements Taxes and Levies [3] (49,332) (36,682) (46,025) (193,581) (55,652) (46,132) (55,522) (173,758) ‐ (54,973) (59,651) (30,028) (124,198) (46,086) (32,154) (46,457) (160,613) (2,080,792) Operations [4] (18,061) (1,808) (37,290) (4,215) (18,207) (8,647) (15,120) (34,304) (4,570) (17,991) (2,903) (55,254) (3,710) (20,117) (1,388) (27,310) (57,642) (643,225) Total Operating Disbursements (67,393) (38,490) (83,315) (197,796) (73,859) (54,779) (70,642) (208,063) (4,570) (72,964) (62,554) (85,282) (127,908) (66,203) (33,542) (73,768) (218,255) (2,724,017)

OPERATING CASH FLOWS 34,220 69,641 34,282 (120,045) 32,553 51,725 34,975 (101,688) 97,734 30,080 39,358 15,389 (26,392) 32,988 66,638 25,634 (119,969) 520,693

Financing Disbursements Interest and Related Fees [5] ‐ ‐ ‐ 1,918 ‐ ‐ ‐ 2,160 ‐ ‐ ‐ ‐ 2,035 ‐ ‐ ‐ 2,236 15,109 Restructuring Disbursements Professional Fees [6] (402) (402) (402) (402) (408) (408) (408) (408) (402) (402) (402) (402) (402) (408) (408) (408) (408) (15,114)

NET CASH FLOWS 33,817 69,239 33,880 (118,529) 32,145 51,317 34,567 (99,936) 97,332 29,677 38,956 14,987 (24,759) 32,580 66,230 25,226 (118,141) 520,688

CASH Beginning Balance 1,191,066 1,224,883 1,294,122 1,328,002 1,209,473 1,241,618 1,292,935 1,327,502 1,227,566 1,324,898 1,354,575 1,393,531 1,408,518 1,383,759 1,416,339 1,482,569 1,507,795 868,966 Net Cash Inflows / (Outflows) 33,817 69,239 33,880 (118,529) 32,145 51,317 34,567 (99,936) 97,332 29,677 38,956 14,987 (24,759) 32,580 66,230 25,226 (118,141) 520,688 Other (FX) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ENDING CASH 1,224,883 1,294,122 1,328,002 1,209,473 1,241,618 1,292,935 1,327,502 1,227,566 1,324,898 1,354,575 1,393,531 1,408,518 1,383,759 1,416,339 1,482,569 1,507,795 1,389,654 1,389,654

Notes to the CCAA Forecast: [1] The purpose of this cash flow forecast is to estimate the liquidity requirements of the Company during the forecast period. [2] Forecast Trade Receipts include collections from the sale of tobacco‐related products and other categories, net of returns, and inclusive of sales taxes. The sales forecast is based on historical sales patterns, seasonality, and current management's expectations, including the estimated impact of transition to plain‐packaging regulations. The cash flow forecast includes certain 2020 price increases. The Company's ability to maintain the price increase is dependent on market conditions. [3] Forecast Taxes and Levies disbursements reflect the remittance of the federal excise tax, provincial tobacco taxes, sales taxes, and the Company's corporate income taxes. [4] Forecast Operations disbursements include employee‐related costs, selling, general, administrative costs and intercompany costs. Intercompany costs include costs relating to the purchase of tobacco‐ related products and other categories, and services including: innovation fees, consulting and advisory fees, IT‐related costs, product development and testing, accounting and human resources. Included in the intercompany costs is a disbursement of $55 million to BAT Mexico for costs associated with the retirement of certain equipment and materials that are obsolete after the implementation of the Tobacco Products Regulations (Plain and Standardized Appearance). [5] Forecast Interest and Related Fees reflect interest income earned net of any sundry payments relating to existing facilities. [6] Forecast Professional Fees include fees for the Company’s Counsel, the Monitor, the Monitor’s Counsel, the Company's US Counsel, the Monitor's US Counsel, the US Noticing Agent, the Court‐Appointed Mediator, the Court‐Appointed Mediator's Counsel and the Representative Counsel for the TRW Claimants. [7] Due to the transition to plain‐pack regulations, the Company may experience return of certain branded tobacco products by retail customers that can no longer be sold after February 7, 2020. As a result, the Monitor understands that the Company anticipates variations from historical levels and timings of receipts and disbursements in the short term. The Company expects the timing of receipts and disbursements to return to historic norms once the transition to plain packaging is complete.

Page 2 of 2

APPENDIX “D” REGULATION OF VAPOUR PRODUCTS

Please see below for a summary of the vaping regulations that are being considered and implemented across Canada.

1. British Columbia - On November 14, 2019, the Health Minister of British Columbia also announced new regulations on vapour products. These regulations: (1) restrict where the vapour products can be sold; (2) define nicotine as a “public health hazard” under the Public Health Act, giving the Province the power to limit the amount of nicotine used in vapour products to 20 milligrams per millilitre; and (3) require plain packaging with health warnings. The government plans to enact these regulations by April 1, 2020. The Province has also introduced legislation that made it the first province in Canada to have a specific tax rate of 20% for vapour products. This legislation came into effect on January 1, 2020.

2. Yukon and Northwest Territories - On November 27, 2019, the Yukon Legislative Assembly passed the Tobacco and Vaping Products Control and Regulation Act, which among other things, prohibits the sale of vapour products to young persons, and places general restrictions on the use, promotion and sale of vapour products. The Legislative Assembly of the Northwest Territories passed a substantially similar bill on February 27, 2019. The legislation in the Yukon and Northwest Territories will come into force on a day fixed by the Commissioner in Executive Council in those territories.

3. PEI - On November 28, 2019, PEI’s Bill 122 (previously discussed in the Sixth Report) received Royal Assent. This will amend PEI’s legislation to prohibit the sale of vapour products in retail locations other than tobacconist shops or vape shops and will raise the legal age to buy tobacco and vapour products from 19 to 21. The Bill will come into force no later than March 27, 2020, at which point PEI will have the highest age restriction on vaping in Canada.

4. Saskatchewan - On December 4, 2019, the government of Saskatchewan passed a law that, effective February 1, 2020, will restrict the sale, promotion and use of

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IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C.1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF IMPERIAL TOBACCO CANADA LIMITED AND IMPERIAL TOBACCO COMPANY LIMITED Court File No. CV-19-616077-00CL

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

Proceeding commenced at Toronto

SEVENTH REPORT OF THE MONITOR FEBRUARY 13, 2019

DAVIES WARD PHILLIPS & VINEBERG LLP 155 Wellington Street West Toronto, ON M5V 3J7 Jay Swartz (LSO #15417L) Tel: 416.863.5502 Natasha MacParland (LSO #42383G) Tel: 416.863.5567 Fax: 416.863.0871 Lawyers for the Monitor