3 NMOAG – 2019 (4)
Terms and Conditions of this Bond
1. Bases: The manufacturer party to this bond, identified in item 1, is a manufacturer of tobacco products,
not party to the Master Settlement Agreement, and sells or intends to sell tobacco products in or into the
State of New Mexico. The manufacturer is required to post this bond because it has been deemed a
manufacturer at elevated risk for non-compliance with the New Mexico escrow statute pursuant to NMSA
1978, §§ 6-4-12 through 6-4-24.
The corporate surety, identified in item 2, is a corporation authorized by the New Mexico Department of
Insurance to transact such business in the State of New Mexico. The manufacturer of tobacco products
and the corporate surety are required to comply with all applicable provisions of NMSA 1978, §6-4-18.1
(C) which states as follows:
The bond shall be posted by corporate surety located within the United States in
an amount equal to the greater of Fifty Thousand Dollars ($50,000.00) or the
amount of escrow the manufacturer in either its current or predecessor form was
required to deposit as a result of its sales in the previous calendar year in New
Mexico. The bond shall be written in favor of the State of New Mexico and shall
be conditioned on the performance by the nonparticipating manufacturer, or its
United States importer that undertakes joint and several liability for the
performance of the manufacturer in accordance with all of its obligations under
the Tobacco Escrow Fund Act or Section 6-4-13 NMSA 1978 during the year in
which the certification is filed and in the next succeeding calendar year.
2. Effective date of the bond: This bond is effective when the New Mexico Office of the Attorney General
Tobacco Project accepts this bond; notice to manufacturer or corporate surety is not required. The
effective date of the bond is stated in item 3 of this bond. If however, no date is listed, the date of
execution in item 4 will be listed as the effective date.
3. Liability: The manufacturer, as the entity who sells or intends to sell tobacco products in or into New
Mexico and does not participate with the Master Settlement Agreement, agrees to deposit funds into a
qualified escrow fund for each “unit sold” for which it is liable pursuant to NMSA 1978, § 6-4-12 et seq.
Furthermore, the manufacturer will make such payments in quarterly installments as required by the New
Mexico Attorney General as required by NMSA 1978, § 6-4-21 E. Until all obligations accrued under
NMSA 1978, § 6-4-12 et seq. have been fully satisfied, this bond remains in full force and effect for the
manufacturer identified herein. Failure to make the required deposits shall result in the forfeiture of this
bond in an amount equal to all funds due under NMSA 1978, § 6-4-12 et seq., plus any applicable
penalties, costs, fees and interest owing the State of New Mexico.
4. Effectiveness of bond: For manufacturers deemed to pose an elevated risk for non-compliance, this bond
shall remain in effect for the year in which it is executed and three (3) calendar years thereafter, or longer
if the company is determined to continue to pose an elevated risk for noncompliance.
5. Compliance: If the manufacturer complies with all provisions of NMSA 1978, § 6-4-12 et seq., at the
expiration of the relevant statutory time period, this obligation shall be null and void. If the manufacturer
or the corporate surety, however, does not comply faithfully in all respects with such laws, rule, and
regulation identified in this paragraph, this bond will remain in full force and effect.