Amendment To The Formation Agreement

AMENDMENT


This AMENDMENT (the "Amendment"), dated as of February 19, 1999, to the Class A Option Agreement, dated as of January 12, 1999 (the "Class A Option Agreement"), is entered into among Brooke Group Ltd., a Delaware corporation ("Brooke"), Liggett & Myers Inc., a Delaware corporation ("LMI"), Liggett Group Inc., a Delaware corporation ("Liggett"), and Eve Holdings Inc., a Delaware corporation (the "Grantor", and together with Brooke, LMI and Liggett, the "Liggett Parties"), on the one hand, and Philip Morris Incorporated, a Virginia corporation ("PM"), on the other hand. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Class A Option Agreement.


WHEREAS, the Liggett Parties and PM are parties to the Class A Option Agreement pursuant to which, among other things, PM has certain due diligence rights with respect to the Marks; and


WHEREAS, the Liggett Parties and PM desire to amend the Class A Option Agreement to extend certain deadlines set forth therein which relate to PM's due diligence rights.


NOW, THEREFORE, in consideration of the mutual promises set forth herein and in the Class A Option Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:


1. The references in paragraph (a) of Section 2.2 of the Class A Option Agreement to "the 10th day following HSR Clearance" and "the 30th day following HSR Clearance" are hereby being amended to refer to "the 17th day following HSR Clearance" and "the 37th day following HSR Clearance", respectively, and accordingly paragraph (a) of Section 2.2 of the Class A Option Agreement is hereby amended to read in its entirety as follows:


"(a) PM may conduct further due diligence with respect to the
Marks from the date hereof until 5:00 P.M. (New York City time) on the
17th day following HSR Clearance (the "INITIAL DUE DILIGENCE Period");
PROVIDED, that in the event any information requested by PM in the
course of its due diligence is withheld due to competitive
considerations or otherwise, s ...