Addendum To Initial States Settlement Agreement

ADDENDUM TO INITIAL STATES SETTLEMENT AGREEMENT
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This ADDENDUM TO INITIAL STATES SETTLEMENT AGREEMENT is entered into this _________ day of March, 1997 by and among the State of West Virginia, State of Florida, State of Mississippi, Commonwealth of Massachusetts, and State of Louisiana (collectively, "Initial States") and Brooke Group Ltd., a Delaware corporation ("Brooke Group"), Liggett & Myers, Inc., a Delaware corporation ("Myers"), and Liggett Group, Inc., a Delaware corporation (which with Myers, is hereinafter referred to as "Liggett").


WHEREAS,


A. On March 15, 1996, the State of West Virginia, the State of Florida, the State of Mississippi, the Commonwealth of Massachusetts, and the State of Louisiana, and Liggett and Brooke Group entered into a settlement (the "Initial Settlement") of the Actions brought by the foregoing States, pursuant to which Liggett agreed to make certain payments, comply with certain proposed regulations restricting the marketing and sale of cigarettes to minors and to offer certain cooperation in connection with the prosecution of such Actions against other Defendants, all in accordance with the terms of the Initial Settlement, a copy of which is annexed hereto as Appendix A.


B. On March 20, 1997, eighteen States and Liggett and Brooke Group entered into a settlement (the "New Settlement") of the Actions brought by such eighteen states, pursuant to which Liggett agreed, among other things, to extend additional cooperation in connection with the prosecution of Attorneys General Actions against other Defendants than Liggett agreed to in the Initial Settlement and such other States agreed to exercise best efforts to ensure that the financial terms of any Global Settlement, legislative or otherwise, are no more onerous on, or less favorable to Brooke Group and Liggett than those set forth in the New Settlement, a copy of which is annexed hereto as Appendix B.


C. The Initial Settling States and Liggett and Brooke Group w ...