Troutman Sanders LLP

April 6, 2012

THE VIRGINIA TOBACCO INDEMNIFICATION AND COMMUNITY REVITALIZATION COMMISSION TO BEGIN THE 2012 DISTRIBUTION OF PHASE I FUNDS

The Virginia Tobacco Indemnification and Community Revitalization Commission ("the Commission") will begin the 2012 distribution of Phase I Indemnification payments to eligible Virginia flue-cured and burley producers and quota owners in June 2012.

Verification for Payment Forms and Applications for Payment will be mailed on or before April 13, 2012 to all eligible flue-cured and burley producers and quota owners. Payments to flue-cured and burley producers will be based on the 1998 crop year. Payments to flue-cured and burley quota owners will be based on the 1999 crop year.

If you were a flue-cured and/or burley quota owner as of July 1, 1999 and/or have received payment in previous years but do not receive a 2012 Verification Form by April 23, 2012 please contact the Phase I Program as soon as possible. For those eligible claimants who do not receive forms, the Phase I Program will assist you in completing the necessary paperwork to participate in this year's program.

The Commission, in conjunction with the federal Farm Service Agency and the Law Firm of Troutman Sanders LLP, fiduciary agent for the Commission, will conduct informational work sessions in Southside and Southwest Virginia to answer questions for producers and quota owners. Claimants with ownership changes are encouraged to attend. These sessions are not required and no payments will be distributed at this time.

The following meetings are scheduled:

Jonesville
Monday, April 23, 2012 8:30 AM until 11:30 AM
Lee County Farm Service Agency
Jonesville, Virginia
Gate City
Monday, April 23, 2012 1:00 PM until 4:00 PM
Scott County Farm Service Agency
Gate City, Virginia
Abingdon
Tuesday, April 24, 2012 8:30 AM until 11:30 AM
Washington County Farm Service Agency
Abingdon, Virginia
Chatham
Wednesday, April 25, 2012 8:30 AM until 11:30 AM
Pittsylvania County Farm Service Agency
Chatham, Virginia
Halifax
Wednesday, April 25, 2012 1:00 PM until 4:00 PM
Halifax County Farm Service Agency
Halifax, Virginia
Lawrenceville
Thursday, April 26, 2012 10:00 AM until 12:00 PM
Brunswick County Farm Service Agency
Lawrenceville, Virginia

Claimants can expect a payment equal to that which was received in 2011, as the 2012 payment rates established by the Commission are the same as 2011 rates:

Flue-Cured Quota Owners		6.01 cents per pound of Basic Quota
Flue-Cured Producers		4.93 cents per pound of Basic Quota
Burley Quota Owners		7.03 cents per pound of Basic Quota
Burley Producers		6.36 cents per Payment Pound

The verification procedure for qualified tobacco producers and quota owners is similar to the one established by the Commission for the 2000-2011 Phase I payments. Completed and signed Verification for Payment forms and Applications for Payments must be returned by the May 18, 2012 deadline in order to be eligible for the June 2012 payment.

Since 2000, the Commission has made available $309 million to Virginia's tobacco growers and owners, thereby fulfilling its statutory obligation. In January 2012, the Commission announced that it has reached the end of its indemnification obligation. The 2012 payment will be the final distribution of Phase I Indemnification funds. At that time, the Commission will have satisfied its statutory obligation to indemnify burley and flue-cured producers and quota owners.

Claimants who need additional information may contact Troutman Sanders LLP, Phase I Tobacco Indemnification Program at 1-888-629-7682 or 804-697-1869 from outside of Virginia. Information is also available on the Program's web site at www.vatip.com.

Welcome to Troutman Sanders LLP's Phase I Tobacco Indemnification Program (TIP) web site. You will find important information regarding the Phase I Tobacco Indemnification and Community Revitalization Funds in this site.

In 1999, Governor James S. Gilmore, III proposed and the General Assembly approved legislation allocating fifty (50) percent of the Master Settlement Agreement money due the Commonwealth of Virginia to tobacco community revitalization in Southside and Southwest Virginia.

The legislation also established the Tobacco Indemnification and Community Revitalization Commission and charged it with the responsibility of distributing the Phase I funds to growers, quota holders and affected communities for economic development and revitalization. The first distribution of the Phase I funds was made in June 2000. The next distribution of Phase I funds is planned to begin in June 2012.

The Virginia Tobacco Indemnification and Community Revitalization Commission has selected the law firm of Troutman Sanders LLP to act for the Commission as fiduciary agent in the distribution of Phase I funds to qualified Virginia tobacco growers and quota holders.

The Phase I - Tobacco Indemnification and Community Revitalization Funds derived from the Master Settlement Agreement are separate from another fund distributed through the Phase II - Virginia Tobacco Trust Fund, dedicated by tobacco companies to Virginia tobacco growers and quota holders. The Phase I Program is also separate from the Tobacco Transition Payment Program ("TTPP or "Buyout").

Since 2000, the Commission has made available $309 million to Virginia's tobacco producers and quota owners. In January 2012, the Commission announced that it has reached the end of its indemnification obligation. The 2012 payment will be the final distribution of Phase I Indemnification funds. At that time, the Commission will have satisfied its statutory obligation to indemnify burley and flue-cured producers and quota owners.

Phone:
Mon.-Fri. 8:30 AM - 4:30 PM excluding holidays
Toll Free 1-888-629-7682
Local 804-697-1869
Fax: 804-697-1860

Mail:
Tobacco Indemnification Program - Phase I
c/o Troutman Sanders LLP
P.O. Box 1198
Richmond, Virginia 23218-1198

Email:
Tobacco@vatip.com