Carolina Tobacco Company Reaches Settlements with State of Oregon, Distributes More Than $360,000.

Settlements resolve past questions of legal standing and reinstates Carolina Tobacco Company products for distribution in the state

PORTLAND, Ore. -- Carolina Tobacco Company (CTC), a privately-held, leading manufacturer of "price-value" cigarettes sold under the brands ROGER([R]) and KINGSBORO([R]), today announced two settlements with the State of Oregon that reinstate the company's authorization to distribute its ROGER([R]) products in the state. As part of the agreements, CTC will pay more than $350,000 to Oregon's general fund.

One settlement, part of a national agreement with 45 states and the District of Columbia, resolves a dispute over the company's status as the manufacturer of its ROGER([R]) brand from November 1999 to April 2003. During this period, ROGER([R]) brand cigarettes were produced, under CTC's direction and control, by House of Prince Riga, a Latvian company. In 2003, states questioned CTC's legal standing to submit the state certifications and make the escrow payments as required as a manufacturer under the Tobacco Master Settlement Agreement. Eventually, the dispute led to multiple lawsuits, which have been resolved with the settlement announced today. Oregon will receive approximately $355,000 from the company related to this agreement. Nationally, CTC will distribute more than $31 million.

A second settlement, specific to Oregon, resolves issues pertaining to certifications and escrow deposits for CTC's ROGER([R]) brand cigarettes, and their listing in the Oregon's Department of Justice's Directory of Compliant Tobacco Product Manufacturers and Brands ("Directory"). The agreement specifies that CTC and the ROGER([R]) brand products be added to the Directory; thus, permitting the sale of the products in the state. Meanwhile, the company has agreed to maintain the required qualified escrow fund and pay $13,331 to Oregon's general fund.

"Our desire has always been to resolve these matters in a way that recognizes our status as a manufacturer and solidifies our status as a leading supplier of high-quality, low-price products in the State of Oregon. The agreement we've reached accomplishes these goals and also provides significant financial benefits to the state," said David Redmond, president of CTC.

Redmond continued, "Our fully owned, state-of-the-art facility in Johannesburg, South Africa, will continue to supply our customers in Oregon and across the nation. Renovated last year to double its production capacity, the operation provides us with the flexibility to continue expanding our market share and reach."

Carolina Tobacco Company is headquartered in Portland, Oregon. Established in 1999 and led by President and CEO David Redmond, CTC is a privately held, independent manufacturer of "Class A," "price-value" cigarettes. Its niche is premium brand, adult smokers in the discount tobacco market. The company has grown to become the second largest price-value manufacturer and importer in the United States. CTC is committed to corporate responsibility as a core value and promotes the sale of its products to adult smokers only.

ROGER([R]) AND KINGSBORO([R]) are registered trademarks of Carolina Tobacco Company in the United States.