GARY K. KING ATTORNEY GENERAL NPM QUARTERLY ESCROW CERTIFICATION Certificate of Compliance by Non-Participating Manufacturer Regarding Escrow Payment GENERAL INFORMATION :What is the definition of a tobacco product manufacturer? 1. Any entity that manufactures cigarettes, including roll-your-own, anywhere that such manufacturer intends to be sold in the United States including cigarettes that are intended to be sold in the United States through an importer; 2. The first purchaser anywhere for resale in the United Sates of cigarettes manufactured anywhere that the manufacturer does not intend to be sold in the United States; or 3. A successor of any entity described above. Who is required to file this certificate of compliance? Any tobacco product manufacturer which: (1) sells cigarettes within the state of New Mexico (whether directly or through any distributor, retailer, or similar intermediary) and; (2) has not become a participating manufacturer in the tobacco Master Settlement Agreement executed on 12/23/98 between 46 U.S. States and territories, including New Mexico, and certain tobacco companies (the MSA). If you satisfy these requirements, you must file this certificate of compliance to report the units of cigarettes manufactured by you and sold in New Mexico and pay the amount calculated into your qualified escrow fund. What is a non-participating manufacturer: A non-participating manufacturer is any tobacco product manufacturer who has not signed on to the MSA. What is a qualified escrow fund? 11/18/10 CJR 1 American LegalNet, Inc. www.FormsWorkFlow.com A non-participating manufacturer must establish a qualified escrow fund. This means an escrow arrangement with a U.S. federal or U.S. state-chartered financial institution having no affiliation with any tobacco product manufacturer and having assets of at least $ 1,000,000,000, where such arrangement (1) requires that the financial institution hold the escrowed funds' principal for the benefit of the State of New Mexico and other "Releasing Parties" as defined in the Master Settlement Agreement and (2) prohibits the non-participating manufacturer from using, accessing, or directing the use of the funds' principal except as consistent with NMSA 1978, Section 6-4-13 (B). When is this certificate of compliance due? This certificate of compliance is to be filed quarterly, as follows: 1st Quarter (January through March) – due April 30 of that year 2nd Quarter (April through June) – due July 30 of that year 3rd Quarter (July through September) – due October 30 of that year 4th Quarter (October through December) – due January 31 of the next year 0following the sales year Note: For 1999, the sales year in New Mexico is June 18, 1999 –December 31 1999. After 1999, the sales year is a calendar year, from January I through December 31. When must I make my escrow payment? You must deposit all escrow payments into your qualified escrow fund quarterly by the due date of your certificate of compliance set forth in the paragraph above. 1 st Quarter is due April 30, 2 nd Quarter is due July 30, 3 rd Quarter is due October 30 and 4 th Quarter is due January 31 of the next year following the sales year. After you have made your deposits, forward a copy of your receipt or other proof of deposit from your financial institution, along with this signed and notarized certificate of compliance. In addition, after you have made your initial deposit into the qualified escrow fund, forward a copy of the escrow agreement as executed. SPECIFIC INSTRUCTIONS: Part 1: number. Manufacturer's Identification Write your name, address, telephone and fax Part 2: Sales Year Write the sales year. For the year 1999, the sales year is June 18, 1999 — December 31, 1999. After 1999, the sales year is a calendar year, from January 1 through December 31. Part 3: Units Sold Write the number of individual cigarettes and the amount of "rollyour own" tobacco (.09 ounces constitutes one cigarette) manufactured by you and sold during the sales year in New Mexico. This includes all individual cigarettes on which any New Mexico stamp is affixed (both tax paid and tax-exempt). Part 4: Deposit Amount Write the appropriate rate for the sales year. Multiply the units of cigarettes by the appropriate rate and write the result as your subtotal. 11/18/10 CJR 2 American LegalNet, Inc. www.FormsWorkFlow.com Calculate the appropriate inflation adjustment according to Exhibit C of the tobacco Master Settlement Agreement and enter the amount. Add the subtotal and the inflation adjustment amount to arrive at the total deposit to be paid into your qualified escrow account for the applicable sales year. Part 5: Financial Institution Write the name and address of the financial institution holding your escrow account. Include your escrow account number. Also write the total cumulative amount currently in your escrow account. Part 6: Signature An authorized notary public must also sign and date this certificate of compliance. 11/18/10 CJR 3 American LegalNet, Inc. www.FormsWorkFlow.com QUARTERLY Certificate of Compliance by Non-Participating Manufacturer Regarding Escrow Payment State of New Mexico Part 1: Manufacturer’s Identification: Name: Address: Phone: Part 2: Sales Year 2011 1st Quarter_______________ 2nd Quarter_______________ 3rd Quarter_______________ 4th Quarter_______________ The Quarter for Sales for this Certificate of Compliance is: (Complete a separate certificate for each year of sales if you are reporting for more than one calendar quarter.) Part 3: Units Sold Number of individual cigarettes and "roll-your-own" tobacco, sold by the Manufacturer identified above during the sales quarter marked in Part 2 in New Mexico is as follows: (See instructions for details) Part 4: Escrow Rates and Payments For the sales quarter:(Use the rates listed below to figure the appropriate deposit subtotal amount) 1999- The rate per cigarette is………………………………………. 2000 - The rate per cigarette is……………………………………… 2001 - 2002 - The rate per cigarette is……………………………… 2003 - 2006 - The rate per cigarette is……………………………… 2007 and thereafter - The rate per cigarette is…………………….. 0.0094241 0.0104712 0.0136125 0.0167539 0.0188482 The appropriate deposit subtotal is $_________ (Multiply units in Part 3 by the appropriate rate in Part 4) The appropriate inflation adjustment for the sales quarter is $_________ (multiply the greater of 3% or the CPI on the Inflation Adjustment Percentage applicable to payments due in the prior year. The inflation adjustment for the 2000 payment for 1999 sales is the subtotal times 3%. The inflation adjustment for the 2001 payment for 2000 sales is the subtotal times 6.48841% .) Refer to Exhibit C of the tobacco Master Settlement Agreement. The total amount that has been paid into the qualified escrow fund by the Manufacturer identified above for the sales quarter $____________ 11/18/10 CJR 4 American LegalNet, Inc. www.FormsWorkFlow.com (add deposit subtotal and the inflation adjustment amount) Note: For the initial deposit, attach a copy of your executed escrow agreement and for all deposits attach copies of your receipt or other proof of deposit from your financial institution. Part 5: Financial Institution Name of Institution: Address: Escrow Acct No: Total Amt Held: Part 6: Signature Under penalty of perjury, I state that, to the best knowledge, all of the information contained in this Certificate of compliance is true and accurate. This certificate of compliance must also be signed and dated by an authorized notary public. Name of Authorized Agent:________________ Title: ________________ Signature of Authorized Agent:_________________ Date:___________ Subscribed and sworn to before me on this date:________________ Signature of Notary Public:___________ City or County of _____________ My Commission expires: _____________________ Mail this certificate of compliance to: Office of the Attorney General Attn: Tobacco Project P. 0. Drawer 1508 Santa Fe, NM 87504-1508 Fax: 505-827-6036 Street Address for Overnight or hand delivery: c/o Claudia Ravanelli Attorney General Tobacco Project 408 Galisteo Santa Fe, NM 87504 11/18/10 CJR 5 American LegalNet, Inc. www.FormsWorkFlow.com