59-22-308 - Payments by subsequent participating manufacturers.

59-22-308. Payments by subsequent participating manufacturers.
Section XI(i)(2) and IX(i)(3) of the Master Settlement Agreement involve payments bysubsequent participating manufacturers and providers as follows:
(1) A Subsequent Participating Manufacturer shall have payment obligations under thisAgreement only in the event that its Market Share in any calendar year exceeds the greater of (1) its 1998 Market Share or (2) 125% of its 1997 Market Share, subject to the provisions ofsubsection (i)(4). In the year following any such calendar year, such Subsequent ParticipatingManufacturer shall make payments corresponding to those due in that same following year fromthe Original Participating Manufacturers pursuant to subsections VI(c), except for the paymentdue on March 31, 1999, IX(c)(1), IX(c)(2) and IX(e). The amounts of such correspondingpayments by a Subsequent Participating Manufacturer are in addition to the correspondingpayments that are due from the Original Participating Manufacturers and shall be determined asdescribed in subsection (2) and (3) below. Such payments by a Subsequent ParticipatingManufacturer shall (A) be due on the same dates as the corresponding payments are due fromOriginal Participating manufacturers; (B) be for the same purpose as such correspondingpayments; and (C) be paid, allocated and distributed in the same manner as such correspondingpayments.
(2) The base amount due from a Subsequent Participating Manufacturer on any givendate shall be determined by multiplying (A) the corresponding base amount due on the same datefrom all of the Original Participating Manufacturers, as such base amount is specified in thecorresponding subsection of this agreement and is adjusted by the Volume Adjustment, exceptfor the provisions of subsection (B)(ii) of Exhibit E, but before such base amount is modified byany other adjustments, reductions or offsets, by (B) the quotient produced by dividing (i) theresult of (x) such Subsequent Participating Manufacturer's Applicable Market Share, theapplicable Market Share being that for the calendar year immediately preceding the year in whichthe payment in question is due, minus (y) the greater of (1) its 1998 Market Share or (2) 125% ofits 1997 Market Share, by (ii) the aggregate Market Shares of the Original ParticipatingManufacturers, the applicable Market Shares being those for the calendar year immediatelypreceding the year in which the payment in question is due.
(3) Any payment due from a Subsequent Participating Manufacturer under subsections(1) and (2) above shall be subject, up to the full amount of such payment, to the InflationAdjustment, the Nonsettling States Reduction, the NPM Adjustment, the offset for miscalculatedor disputed payments described in subsection XI(i), the Federal Tobacco Legislation Offset, theLitigating Releasing Parties Offset and the offsets for claims over described in subsectionsXII(a)(4)(B) and XII(a)(8), to the extent that such adjustments, reductions or offsets would applyto the corresponding payment due from the Original Participating Manufacturers. Provided,however, that all adjustments and offsets to which a Subsequent Participating Manufacturer isentitled may only be applied against payments by such Subsequent Participating Manufacturer, ifany, that are due within 12 months after the date on which the Subsequent ParticipatingManufacturer becomes entitled to such adjustment or makes the payment that entitles it to suchoffset, and shall not be carried forward beyond that time even if not fully used.
(4) For purposes of this Subsection (i), the 1997, or 1998, as applicable, Market Share,and 125% thereof, of those Subsequent Participating Manufacturers that either (A) became asignatory to the Agreement more than 60 days after the MSA Execution Date or (B) had noMarket Share in 1997, or 1998, as applicable, shall equal zero.


Amended by Chapter 53, 2004 General Session