"The next step is to get these documents in the public eye," said Gary Galiher in response to the Liggett Group agreement announced this week.
Hawaii attorney general Margery Bronster was with other states' attorneys at a news conference in Washington, D.C., yesterday to announce the terms of the Liggett settlement.
The smallest of the five major tobacco companies completed its defection from the rest of the industry yesterday, agreeing to settle lawsuits in 22 states and to help state prosecutors go after the nation's biggest cigarette manufacturers.
The settlement was seen as a historic turning point in the three-decade-long war on smoking in this country, the first step in changing the way cigarettes are sold and consumed. For the first time, a tobacco company has admitted that nicotine is addictive, that smoking causes cancer and that the industry targets young people.
Those admissions, together with thousands of pages of damning documents and the promised testimony of current and former employees, is expected to help both state and federal prosecutors bring the big tobacco companies to their knees.
"All they're selling is free-based nicotine," said Galiher, who was contracted to handle the case when the state filed a lawsuit in February against the manufacturers and their research and public relations arms.
"It should be regulated as a drug and they shouldn't be able to pander to children."
CASTANO SETTLEMENT
This SETTLEMENT AGREEMENT is entered into this 12h day
of March , 1996 by and between Dianne Castano and Ernest Perry,
the putative representative plalntiffs (collectively,
"Plaintiffs") in Dianne Castano, et al. v. The American Tobacco
Company, Inc., et al., Civil No. 94-1044, United States District
Court for the Eastern District of Louisiana ( "Castano"), for
themselves and on behalf of the plaintiff settlement class as
hereinafter defined ("Settlement Class"), and Brooke Group Ltd.
("Brooke Group"), a Delaware corporation, and Liggett Group, Inc.
("Liggett"), a Delaware corporation.
RECITALS
WHEREAS,
A. On March 29, 1994, a putative class action
complaint was filed to commence the Castano action against, among
others, The American Tobacco Company, Inc., R.J. Reynoldd Tobacco
Company, Brown & Williamson Tobacco Corporation, Philip Morris,
Inc., Liggett & Myers, Inc., Lorillard Tobacco Company, Inc., and
United States Tobacco Company and their various parent and
related companies, asserting claims on behalf of a putative class
of allegedly nicotine-dependent smokers and their families,
seeking among other things, compensatory and punitive damages, as
well as certain equitable relief.
B. On February 17, 1995, in an Order and Reasons
published at 160 F.R.V. 544 (E.D. La. 1995), the District Court
conditionally certified Castano as a class action.
+ C. On July 26, 1995, the United States Court of
Appeals for the Fifth Clx+uit granted the defendants in Castano
leave to appeal the District Court's decision conditionally
certifying Castano as a class action. That appeal is presently
pendiing .
D. Brooke Group and Liggett have denied, and continue
to deny each and all of the claims and contentions alleged by
the plaintiffs in the Castano case, have denied, and continue to
deny, that Castano has been, or could be, properly certified as a
trial class action and have denied, and continue to deny, any
wrongdoing or any legal liability of any kind.
E. Plaintiffs and Brooke Group and Liggett recognize
and suppo+t the public interest in preventing smoking by, or
promotion of smoking to, children and adolesccnts.
F . The Food and Drug Administration ("FDA") has
proposed certain new reguiations purported1y concerning the sale
and d1stribution of nicotine-containing cigarettes and smokeless
tobacco products to children and adolescents.
G. Brooke Group and Liggett recognize and
acknowledge
that defending the continued prosecution of Castano (or a similar
putative class action) against them through tria1 and appea1s
would require considerab1e resources and expense and would entail
uncertainty and risk. Brooke Group and Liggett have determined
that the settlement, in accordance with this Agreement, of the
claims in Castano against them will be beneficial to Brooke Group
and Liggett.
~ H. Plaintiffs recognize and acknowledge that the
continued prosecution of Castano against Brooke Group and Liggett
through trial and appeals would require considerable time and
expense and would entail uncertainty, risk and delay. Plaintiffs
have determined that the settlement, in accordance with this
Agreement, of the claims in Castano against Brooke Group and
Liggett will he beneficial to the class.
NOW, THEREFORE, in consideration of the foregoing and
ff the promises and covenants set forth in this Agreement,
Plaintiffs, on their own behalf and on behalf oi the Settiement
Class, and Brooke Groupa+nd Liggett hereby stipulate and agree
that, conditional upon the approval of the District Court as
required by the Federal Rules of Civil Procedure and as provided
herein, Castano shall be settled as against Brooke Group, Liggett
and a Future Affiliate (as defined hereinbelow) of Liggett or
Brooke Group and that all claims asserted by or on behalf of
class members in Castano against Brooke Group, Liggett and such
Future Affiliate shall be dismissed with prejudice, all on the
terms contained herein, as follows:
1. Definitions.
As used in and solely for the purposes of this
Agreement, the following terms shall have the following
respective meanings:
"Affiliate" means a Present Affiliate or a Future
Affiliate.
"Agreement" means this Settlement Agreement.
"Approved Smoking Cessation Programs" means a smoking
cessation treatment or program applied by the Castano Board.
"Brooke Group" means Brooke Group, Ltd. and its Present
Affiliates other than Liggett.
+ "Castano" means the above-captioned acion, Clvil No.
94-1044, pending in the United States Distict Court for the
Eastern District of Louisiana.
"Castano Center for Tobacco Control Innovation And
Research" ("Castano CTCIR") and "CTCIR Document" mean,
respectively, the entity to be established as provided in
Section 6 of this Agreement and the docucent attached hereto as
Exhibit 8.
"Castsno Defendants" means Thc American Tobacco Co.,
Lorillard Tobacco Co., Philip Morris Inc., R.J. Reynolds Tohacco
Co., Brown & Williamson Tobacco Corp., Liggett & Myers, Inc. and
United States Tobacco Co.
"Castano Plaintiffs Legal Committee" means the
attorneys appointed by the District Court as plaintiffs' class
counsel and designated in Castano as Plaintiffs' Legal Committee.
"Castano Settlement Fund Boar" ("Castano Board") and
"Castano Board Document" mean, respectively, the entity to be
established as provided in Section 6 of this Agreement and the
document annexed hereto as Exhibit A, approved by the District
Court to adminlster the Settlement Fund provided for under the
terms of this Agreement.
+ "District Court" means the United States District Court
for the Eastern District of Louisiana.
"Domestic Tobacco Operations" means the manufacture
and/or sale of cigarettes in the United States and its
possessions.
"Eligible Settlement Class Members" means the
Sett1ement class membexs defined in Section 6.2.2 of this
Agreement.
+ "Fairness Hearing" means the hearing to be conducted by
the District Court in conneetion with the determination of the
fairness, adequacy and. reasonableness of this Agreement under
Fed. R, Civ. P. 23.
"Final Order and Judgment" means the order to be
entered by the District Court, in a form which is mutually
agreeable to the Parties, approving this Agreement without
material alterations, as fair, adequate and reasonable under Fed.
R. Civ. P. 23, confirming the Settlement Class certification
under Fed. R. Civ. P. 23, and making such other findings and
determiations as the District Court deems necessary and
appropriate to effectuate the terms of this Agreement.
"First Opt Out Period" means the period commencing on
the Initial Notice Date and extending for a period of time as
provided in Section 7.3 hereof.
"Future Affiliate" means any entity, other than an
entity with a Market Share greater than 30%, which is a defendant
in Castano and which, with the prior written approval of Brooke
Group, subsequent to the date, and during the term, of this
Agreement: directly or indirectly acquires or is acquired by
Liggett or Brooke Groupi which directly or indirectly acquires
all or sustantially all of the stock or assets of Liggett or
Brooke Group; all or substantially all of whose stock or assets
are directly or indirectly acquired by Brooke Group or Liggett
or directly or indirectly merges or otherwise combines with
Brooke Group or Liggett.
"Initial Notice" means, with respect to a Settling
Defendant, the written notice document to be provided by such
Settling Defendant to Settlement Class members as defined in
Section 7.1 of this Agreement.
"Initial Notice Date" means, with respect to a Settling
Defendant, the first date upon which Initial Notice is given by
such Settling Defendant to the settlement Class pursuant to
Section 7.1 of this Agreement.
"Liggett" means Liggett Group, Inc. and Liggett &
Myers, Inc.
"Market Share" means, with respect to a Castano
Defendant and a specified year, the domestic market share in that
year of all of such defendant's tobacco products, as determined
by The Maxwell Consumer Report published by Wheat First Butcher
Singer.
"Medical Practitioner" means, with respect to a
Settlement Class member, the medical practitioner referred to in
the definition of Regular Smoker in this Section 1.
"Notice Period" means the Initial Notice Period or a
Subsequent Notice Period.
"Parties" means the Plaintiffs, Brooke Group, Liggett
and any other settling Defendant, as hereinafter defined, if, as
and when it becomes bound by thls Agreement.
"Preliminary Approval" means the District Court's
conditional certification of the Settlement Class, preliminary
approval of this Agreement, approval of the form of notice to the
Settlement Class pursuant to Fed. R. Civ. P. 23 (or the setting
of a date for the approval or submission for approval of the form
of such notice), and entry of an order substantially in the form
of Exhibit C hereto.
"Present Affiliate" means, with respect to a specified
corporation, another corporation, partnership or other entity
which as of the date of this Agreement, directly or indirectly,
controls, is controlled by, or is under common control with, such
specified corporation.
"Present Value" means, with respect to a specified
amount or amounts, the present value of such amount or amounts as
calculated using a discount rate equal to the yield on 10-year
Treasury Notes as reported in the Wall Street Journal at the time
of such calculation.
"Pretax Income", with respect to a specified Settling
defendant other than Liggett means, for a specified year the
operating income or equivalent designations from domestic
Tobacco Operations of the Settling Defendant and its Present
Affiliates, on a consolidated basis, for the Settling Defendant's
most recent fiscal year, as reported in filings to the United
States Securities and Exchange Commission or, if there is no such
filing, as reported by the Settling Defendant's independent
outside auditors. For purposes of the consolidation intended
hereby, parent company debt and parent company corporate and
other expenses, less amortization of parent company acquisition
goodwill, shall be allocated pro rata to all operating units
according to operating income.
"Pretax Income", with respect to Liggett, means for a
specifled year, the operating income af Liggett for its most
recent fiscal year, as reported in filings to the United States
Securities and Exchange Commission or, if there is no such
filing, as reported by Liggett's independent outside auditors.
"Proposed Rule" means the regulations proposed by the
FDA concerning the sale and distribution of cigarettes and other
products, dated August 9, 1995, published at 21 C.F.R. Parts 801,
803, 804 and 897, and bearing document number 95N-0253.
"Regular Smokers" means:
(a) all cigarette smokers who have been diagnosed by a
medical practitioner as nicotine-dependent; and
(b) all regular cigarette smokers who were or have
been advised by a medical practitioner that
smoking has had or will have adverse health
consequences who thereafter do not or have not
quit smoking; and
(c) all cigarette smokers who claim or are claimed to
be addicted to cigarette smoking; and
(d) all cigarette smokers who have smoked regularly
for at least an aggregate of one year.
"Settlement Class" means, as of each date during the
term of this agreement, a settlement class composed of
(a) all past and present Regular smokers in the United
States, its territories, possessions and the
Commonnwealth of Puerto Rico; and
(b) the estates, representatives, and administrators
of these Regular Smokers; and
(c) the spouses, children, relatives and "significant
others" of these Regular Smokers as their heirs or
survivors;
provided that excluded from such settlement class are (a) all
persons who, in accordance with the terms of this Agreement and
under such procedures, conditions and deadlines may be
established by the District Court in connection with this
agreement, executive a timely request for exclusion (Opt-Out) from
the Settlment class; and (b) offices, directors or employees of
any of the Castano Defendants.
+ "Settlement Date" means the date on which all of the
following shall have occurred: (a) the entry of the Final Order
and Judgment without material modification and (b) the
achievement of finality for the Final Order and Judgment by
virtue of that order having become final and non-appealable
through (i) the expiration of all appropriate appeal periods
without an appeal having been filed, (ii) the final affirmance of
the Final Order and argument o appeal o+ final di+missal or denial
of all such appeals, including petitions for review, rehearing or
certiorari; or (iii) final disposition of any proceedings,
including any appeals, resulting from any appeal from the entry
of the Final Order and Judgment.
"Settlement Fund" means the fund established in
accordance with the terms of Section 6 of thls Agreement.
"Settling Defendants" means Brooke Group, Liggett and
one Future Affiliate of Brooke Group or Liggett, provided that in
the event of any corporate restructuring, reorganization or
spinoff involving any Settling defendant, only the corporation
which, after such reorganization or spinoff, retains the Domestic
Tobacco operations of such Settling defendant shall thereafter be
treated as the Settling Defendant for purposes of the payment
obligations of Section 6 of this Agreement.
"Settllng Defendants' Counsel" means the law firm of
Kasowitz, Benson, Torres + Friedman L.L.P.
"Smoking Claims Expense" means, with respect to a
specified year, the aggregate amount of the out-of-pocket
expenses paid during that year by a Settling Defendant for the
payment of legal fees and costs, including attorneys' fees and
any settlements or judgments in connection with litigation
aising from smoking-related claims other than Castano, Attorney
General Actions, or other civil cases filed on or before January
1, 1996.
"Subsequent Notice" means, with respect to a Settling
Defendant, the written notice to be provided by such Settling
Defendant to Settlement Class members as defined and provided by
Section 7.4 of this Agreement.
"Subsequent Notice Dates" means the dates defined in
Section 7.4 hereof.
"Subsequent Opt Out Period" means the period commencing
of a Subsequent Notice Date and extending for a reasonble period
of time as provided in Section 7.5 hereof.
2. Settlement Purposes Only.
+ 2.1. This agreement is for settlement purposes only,
and neither the fact of, nor any provision contained in, this
Agreement nor any action taken hereunder shall constitute, be
construed as, or be admissible in evidence as, any admission of
the validity of any claim, any argument or any fact alleged or
which could have been alleged by Plaintiff in Castano or alleged
or which could have been alleged in any other action or
proceeding of any kind or of any wrongdoing, fault, violation of
law, or liability of any kind on the part of any of the Settling
Defendants or any admission by any of them of any claim or
allegation made or which could have been made in Castano or in
any other action or proceeding of any kind, or as any admission by
any of the Plaintiffs, members of the Settlement Class or Castano
Plaintiffs' Legal Committee of the validity of any fact or
defense asserted or which could have been asserted against them
in Castano or in any other action or proceeding of any kind.
2.2. Any preliminary or final certification of a
Settlement Class pursuant to the terms of this agreement shall
not constitute and shall not be construed as an admission on the
part of any Settling Defendant that this action, or any other
proposed or certified class action, is appropriate for trial
class treatment pursuant to Fed. R. Civ. P. 23 or any other
action statute or rule. This Agreement is without prejudice to
the rights of Settling Defendants to (a) oppose trial class
certification in this action, and seek decertification or
modification of the trial class as certified in the order of
February 17, 1995, or (b) oppose certification in any other
proposed or certified class action.
2.3 Nothing contained in this Agreement shall
constitute or be construed as any admission of the validity of
the FDA's assertion of jurisdiction over cigarettes or any other
product.
3. Submission for Preliminary Approval.
Promptly after execution of this Agreement, the Parties
shall jointly submit this Agreement, through their respective
attorneys, to the District Court for Preliminary Approval and
jointly more in the District Court to lift the stay as to
Settling Defendants for the limited purpose of considering
such approval. Further, Liggett shall move in the Fifth Circuit
Court of Appeals for leave to withdraw without prejudice its
interlocutory appeal of the District Court's February 17,
1995 order of trial class certification.
4. Parties.
4.1. This Agreement shall be binding, in
accordance with the terms hereof, upon Plaintiffs, the
Settlement Class, Brooke Group, Liggett and each other
Settling Defendant; provided that the payment obligations
of this Agreement shall be binding only upon the Affiliates
of such Settling Defendants which are engaged in Domestic
Tobacco Operations.
4.2. Plaintiffs and the Settlement Class shall
not seek to enjoin a spinoff or like disposition of the
stock of Nabisco Holdings Inc. by RJR Nabisco Holdings
Corp. in the event that a slate of nominees proposed by
Brooke Group for election to the RJR Nabisco Holdings Corp.
Board of Directors is elected.
5. Advertising Limitations.
5.1. Each Settling Defendant, promptly after the
later of the Settlement Date and the date said Settling
Defendant becomes bound by this Agreement, shall withdraw
its objections and opposition to the Proposed Rule and to
the assertion of jurisdiction by the FDA for the sole
purpose of promulgating the Proposed Rule with respect to
all Castano Defendants. By withdrawing said opposition and
objections, Settling Defendants do not and shall not be
deemed to consent to or acknowledge such jurisdiction and
do not and shall not be deemed to waive or abandon said
opposition and objections in the event this Agreement is
terminated. Each Settling Defendant, notwithstanding the
foregoing, may object to or oppose the Proposed Rule to the
extent that compliance is impractical or excessively
expensive. If, prior to the Proposed Rule taking final
nonappealable effect as to the tobacco industry generally,
the FDA asserts that it has acquired or can or should
acquire jurisdiction to promulgate or enforce the Proposed
Rule as to a Settling Defendant by virtue of its entry into
or compliance with this Agreement then, in such event, this
Section 5 and its subparts shall be null and void ab initio
in their entirety.
5.2. Each Settling Defendant shall follow and
abide by the provisions of the Proposed Rule, insofar as
they pertain solely to such Settling Defendant's Domestic
Tobacco Operations, as set forth in, and modified by,
paragraphs 5.2.1 to 5.2.9 hereof until a final
determination is reached respecting the Proposed Rule, at
which time the Settling Defendants will be bound by the
Rule only insofar as, and to the extent that, the Rule
becomes an enforceable obligation binding upon all of the
Settling Defendants and non-settling Defendants.
5.2.1. Proposed Rule Section 897.16 (a), but only
to the extent that such section applies to a trade or brand
name of a non-tobacco product which is in use in the United
States and has a demonstrated or likely appeal to minors;
provided that in any dispute hereunder, the Settling
Defendant shall have the burden to show compliance with
this Subsection in binding arbitration.
5.2.2. Proposed Rule Section 897.16(b), as
proposed.
5.2.3. Proposed Rule Section 897.16(d), except to
the extent free samples are distributed under circumstances
where no minors are present or likely to be present.
5.2.4. Proposed Rule Section 897.30(a), as
proposed.
5.2.5. Proposed Rule Section 897.30(b) but only
to the extent that such section applies to billboards
within 1,000 feet of a ~clearly marked and state-licensed
elementary or secondary school or a clearly marked,
outdoor, municipal or other government-operated public
playground for children.
5.2.6. Proposed Rule Section 897.32(a), to the
extent that the requirements of such section will be
applicable only to a publication whose regular readers aged
less than eighteen years constitute 15% or more of the
publication's total regular readership; provided that for
those publications in which the Settling Defendants
currently advertise which exceed the 15% limitation,
Settling Defendants will, through incremental reduction,
meet the requirements of this section within a period of
five (5) years.
5.2.7. Proposed Rule Section 897.34(a), to the
extent such section applies to clothing or outerwear or to
any items or services, other than clothing or outerwear,
which have not prior to the date of this Agreement been
marketed, licensed, distributed or sold, and which are more
likely to appeal to minors than to adults; provided that
such section does not apply to any clothing, outerwear,
items or services customarily marketed, licensed,
distributed or sold at the site and at the time of events
permissible under section 5.2.9 of this Agreement.
5.2.8. Proposed Rule Section 897.34(b), to the
extent that gifts or items distributable or redeemable
pursuant to this rule are more likely to appeal to minors
than to adults.
5.2.9. Proposed Rule Section 897.34(c), except
that such section will be applicable only to an athletic,
musical, artistic or other social or cultural event whose
past patrons or attendees aged less than eighteen years
constitute 15% or more of the event's total past patronage
or attendance, provided that this section does not apply to
any events that Settling Defendants have sponsored,
conducted, engaged or participated in within the lass ten
years.
5.3. Notwithstanding anything to the contrary in
the Proposed Rule or in this Agreement, each such Settling
Defendant will commence compliance with Section 5.2 of this
Agreement as soon as reasonably practicable; provided that
such Settling Defendant may limit its compliance to the
extent, if any, necessary to ensure that the net annual
out-of-pocket cost to the Settling Defendant of such
compliance not exceed $1 million; and provided further that
such Settling Defendant shall not be obligated pursuant
hereto to breach pre-existing legal obligations, if any, it
may have with respect to the matters covered by Section 5.2
(and shall use its reasonable best efforts to minimize the
degree to which any such obligations would impede its full
compliance therewith). For purposes of this paragraph, the
phrase "net annual out-of-pocket cost" means the excess of
(a) the additional out-of-pocket expenditures incurred
during particular year by a particular Settling Defendant
in complying with the matters specified in Section 5.2,
over (b) savings, if any, in out-of-pocket expenditures
realized during such year by such Settling Defendant
directly from the implementation; of the matters covered by
Section 5.2.
5.4. If, when and to the extent that the Proposed
Rule, in whole or in part, becomes an enforceable legal
obligation binding upon all of the Castano Defendants, each
Settling Defendant will comply therewith.
5.5. As promptly as reasonably practicable after
becoming bound by this Agreement, each Settling Defendant
shall eliminate cartoon characters, such as "Joe Camel",
from all of its advertising and promotional materials and
activities with respect to tobacco products.
6. Castano Board; Castano CTCIR; Settlement Fund.
6.1. The Castano Plaintiffs Legal Committee,
Brooke Group and Liggett with the approval of the District
Court, shall establish (a) in accordance with the Castano
Board Document annexed hereto as Exhibit A, the Castano
Board and (b) in accordance with the Castano CTCIR Document
annexed hereto as Exhibit B, the Castano CTCIR.
6.2. Except as may otherwise be provided herein,
all amounts due and owing by each Settling Defendant under
this Agreement shall be paid when due into the Settlement
Fund to be administered, allocated and distributed to
Eligible Settlement Class Members by the Castano Board in
accordance with this Agreement and the Castano Board
Document and under the continuing jurisdiction and
supervision of the District Court
6.2.1. To the extent practicable, the Castano
Board shall accord claims priority in the order received
from Eligible Settlement Class Members, in accordance with
the terms of the Castano Board Document and this Agreement.
6.2.2. A person shall be an Eligible Settlement
Class Member with respect to a Settling Defendant under
this Agreement only if such person is a member of the
Settlement Class with respect to one or more brands of
cigarettes of such Settling Defendant.
6.2.3. In order to obtain reimbursement pursuant
to Section 6.4 hereof from a Settling Defendant, an
Eligible Settlement Class Member must submit to the Castano
Board an affidavit or other written statement under penalty
of perjury setting forth (a) facts demonstrating that such
person qualifies under Section 6.2.2 hereof (including but
not limited to the identity of the Settling Defendant's
brands), (b) facts demonstrating that such person is or was
after the Settlement Pate enrolled in an Approved Smoking
Cessation Program (including but not limited to the name
and address of the person's Medical Practitioner, if any,
and the identity and location of such program) and (c) any
other facts or information which the Castano Board may
require to ensure that such person is an Eligible
Settlement Class Member. The Castano Board shall have the
authority to determine whether and under what circumstances
an Eligible Settlement Class Member may receive
compensation or reimbursement for more than one Approved
Smoking Cessation Program. In so determining, the Castano
Board shall take into account the number of applicants in
any given year, the availability of funds to compensate
Eligible Settlement Class Members for more than one
Approved Smoking Cessation Program, and a good faith
adherence on the part of the Eligible Settlement Class
Members to the regimen and requirements of the Approved
Smoking Cessation Programs.
6.3. Settling Defendants shall have no interest
in or responsibility for allocations or distributions from
the Settlement Fund and do not guarantee any earnings or
insure against any losses from any portion of the
Settlement Fund assets that may be maintained or
administered by the Castano Board as provided in Section
6.2 above.
6.4. Each Settling Defendant shall, beginning
thirty (30) days from the later of the Settlement Date and
the date such Settling Defendant becomes bound by this
Agreement, (a) pay into the Settlement Fund periodic
payments sufficient on an ongoing basis to reimburse
one-half of the cost of Approved Smoking Cessation Programs
for Eligible Settlement Class Members, plus reasonable
administrative costs for the Castano Board and (b) except
for Brooke Group and Liggett, pay into the Castano CTCIR an
amount equal to no more than $5 million in the first year
of the term hereof and, subject to the approval and control
of the Castano Board, no more than $10 million in each
subsequent year up to the fifteenth year from the date of
this Agreement to fund research by the Castano CTCIR
concerning tobacco cessation programs and prevention of
smoking by minors; provided that the maximum aggregate
payment due in any year during the term of this Agreement
from each Settling Defendant shall be no more than 5% of
the Settling Defendant's Pretax Income and in no event more
than fifty million dollars ($50,000,000) (such fifty
million dollar amount to be adjusted annually in accordance
with changes in the Consumer Price Index reported by the
United States Government); and provided further that, for
purposes of this Section 6.4, Brooke Group and Liggett
shall be treated as a single entity, the payment obligation
of which is based upon the Pretax Income of Liggett only.
Each Settling Defendant other than Brooke Group and Liggett
shall, within 60 days of the later of the entry of the
Final Order and Judgment and the date such Settling
Defendant becomes bound by this Agreement, advance to the
Settlement Fund twenty-five million dollars ($25,000,000).
The advance payment shall be used to pay the costs and
expenses incurred in establishing the Castano Board and the
CTCIR Board and to fund the initial operations of each,
including dissemination of information and notice to
Eligible Settlement Class Members. Such Settling
Defendant's advance payment shall be (a) credited against
any amounts due from such Settling Defendant under this
Agreement and (b) in the event of a termination of this
Agreement, any unspent portion of such advance payment
shall be promptly returned to such Settling Defendant.
6.5. In the event of the entry of any final
monetary Judgment in Castano (other than by way of
settlement) against any one or more of the Castano
Defendants, then each Settling Defendant shall have the
right to reduce the payments it is obligated to make
pursuant to this Agreement to the extent necessary to make
(i) the then Present Value of all amounts theretofore paid
and thereafter payable pursuant to this Agreement by any
Settling Defendant per percentage point of the then Market
Share of such Settling Defendant no more than seventy-five
percent (75%) of (ii) the then Present Value of the dollar
amount of such judgment per percentage point of the then
Market Share of each such non-settling Defendant; provided
that such Settling Defendant give written notice of such
reduction and the method of calculating such reduction to
the Castano Board and the Castano Plaintiffs Legal
Committee as soon as practicable after the entry of such
judgment.
6.6. Each Settling Defendant shall, during the
term of this Agreement, have the right to a credit against
amounts due in each year pursuant to this Agreement in an
amount; equal to fifty percent (50%) of the difference
between (a) such Settling Defendant's Smoking Claims
Expense in the prior year and (b) such Settling Defendant's
Smoking Claims Expense for the twelve months prior to the
date of this Agreement; provided that the amount of such
credit shall not be greater than ten percent of the amounts
that would otherwise be due from such Settling Defendant in
such year; provided further that each Settling Defendant
shall have the right to terminate this Agreement with
respect to that Settling Defendant in the event that the
amount of such difference is greater than twenty-five
percent of the amount so due from such Settling Defendant
in such year (any and all payments made pursuant to this
Agreement prior to such termination shall be
nonrefundable); and provided further that such Settling
Defendant, as soon as practicable after the end of such
year, give written notice of the right to any such credit
and the method of calculating such credit to the District
Court, the Castano Board and the Castano Plaintiffs Legal
Committee.
6.7. With respect to each Settling Defendant, in
each year beginning with the second year such Settling
Defendant becomes bound by this Agreement, the annual
payment amount due under Section 6.4 of this Agreement from
such Settling Defendant shall be decreased in proportion to
any decrease, and (only if there shall have been a prior
such decrease) increased in proportion to any increase, in
such Settling Defendant's Market Share from the prior year;
provided, however, that (a) such annual payment amount
shall not be so decreased to the extent, if any, that such
annual payment amount in such year is decreased as a result
of a decrease in such Settling Defendant's Pretax Income
and (b) such annual payment amount shall never be increased
such that the aggregate amount of any such increases
exceeds the aggregate amount of any such decreases (and in
no event more than the maximum amount set forth in Section
6.4 hereof); and provided further that such Settling
Defendant, as soon as practicable after the end of such
year, give written notice of any such decrease or increase
and the method of calculating it to the District Court, the
Castano Board and the Castano Plaintiffs Legal Committee.
7. Notice to the Settlement Class.
7.1. Upon the later of Preliminary Approval and
the date a Settling Defendant becomes bound by this
Agreement, and as the District Court may direct, each
Settling Defendant shall cause notice of the settlement
embodied herein (the "Initial Notice") to be given to the
members of the Settlement Class.
7.2. The Castano Plaintiffs Legal Committee shall
establish at its sole cost a 1-900 number in order to
receive the calls and inquiries of Settlement Class members
regarding this Agreement. All income from such calls
shall, subject to District Court supervision and
discretion, be used first to defray Castano litigation
costs, then to defray the administration costs of any
approved settlement, and lastly to further fund the Castano
CTCIR
7.3. With respect tO each Settling Defendant, the
Initial Notice, in a form to be approved by the District
Court, shall be disseminated as provided in this Section 7
over the course of a period not to exceed 120 days from the
Initial Notice Date, subject to approval by the District
Court.
7.4. At the end of each successive five-year
interval during the term of this Agreement ("Subsequent
Notice Dates"), each Settling Defendant shall cause notice
of the settlement embodied herein (the "Subsequent Notice")
to be given to the members of the Settlement Class.
7.5. Each Subsequent Notice, in a form to be
approved by the District Court, shall be disseminated over
the course of four periods each not to exceed 60 days from
each applicable Subsequent Notice Date.
8. Settlement Class Members' Right of
Exclusion/Inclusion.
8.1. A Settlement Class member may opt out of the
Settlement Class at any time during the First Opt Out
Period. In order to exercise the opt out right set forth in
this Section 8.1, the Settlement Class member must
complete, personally sign and return a request for
exclusion in the form of, or containing substantially all
of the information contained in, Exhibit P hereto. Such
request must be postmarked on or before the end of the
First Opt Out Period. Except as provided in Section 8.2 of
this Agreement, any Settlement Class member who has not so
elected will be a Settlement Class member for all purposes
under this Agreement. Any Settlement Class member who
elects to opt out of the Settlement Class pursuant to this
Section 8.1 shall not be entitled to relief under or be
affected by this Agreement.
8.2. A person who is not an Eligible Settlement
Class Member during the First Opt Out Period may opt out of
the Settlement Class only during the first Subsequent Opt
Out Period after such person becomes an Eligible Settlement
Class Member. In order to exercise the opt out right set
forth in this Section 8.2, the Settlement Class member must
complete, personally sign and return to the Castano Board
a request for exclusion in the form of (or containing
substantially all of the information contained in) Exhibit
D. Such exclusion shall include an affidavit or other
written statement under penalty of perjury that the maker
of such affidavit or other statement was neither a smoker
or user of cigarettes of such Settling Defendant nor
otherwise an Eligible Settlement Class Member hereunder
during any previous Notice Period hereunder. Such request
must be postmarked on or before the expiration of such
first Subsequent Opt Out Period. Any such Settlement Class
member who has not so elected will be a Settlement Class
member for all purposes under this Agreement. Any such
Eligible Settlement Class Member who elects to opt out of
the Settlement Class pursuant to this Section 8.2 shall not
be entitled to relief under or be affected by this
Agreement.
8.3. The Castano Board may, in its discretion.
allow any person who has elected to opt out pursuant to
Section 8.1 or 8.2 of this Agreement to withdraw that
election.
9. Release.
9.1. Upon the later of the Settlement Date and the
date each Settling Defendant becomes bound by this
Agreement, for good and sufficient consideration as
described herein, all members of the Settlement Class,
collectively and individually, on behalf of themselves, the
persons they represent, their heirs, executors,
administrators, trustees, beneficiaries, agents, attorneys,
successors and assigns shall be deemed to and do hereby
release, dismiss and discharge each and every claim, right,
and cause of action (including, without limitation, all
claims for damages, medical expenses, restitution, medical
monitoring, or any similar legal or equitable relief, under
federal, state or common law) which they had, now have, or
may hereafter have against each Settling Defendant
(including its past, present and future parents,
subsidiaries, affiliates and downstream distribution
entities, and their past, present and future agents,
servants, attorneys, employees, officers, directors,
shareholders, and beneficial owners) which is based on
harm, injury or damages claimed by members of the
Settlement Class to be caused by addiction to or dependence
upon cigarettes which contain nicotine or which is asserted
in the Castano action in connection with, or arising out of
the acts, facts, transactions, occurrences, representations
or omissions set forth, alleged, referred to or otherwise
embraced in the complaint in Castano premised, in whole or
in part, on the claimed addictive or dependence-producing
nature of nicotine contained in cigarettes or the damage,
harm or injury caused by the condition or claimed condition
of addiction or dependence resulting from the use of
cigarettes which contain nicotine; it being understood
that, as a result of such release, a Settlement Class
member who does not opt out may not claim as a basis for a
current or future personal injury or wrongful death claim
against a Settling Defendant that addiction to or
dependence upon cigarettes containing nicotine was the
proximate cause or a contributing proximate cause of that
injury. This release does not extend to claims arising
after the termination of this Agreement.
9.2. Nothing in this Agreement shall Prejudice or
in any way interfere with the rights of the Plaintiffs,
Settlement Class members, and the Settling Defendants to
pursue all of their rights and remedies against
non-settling Castano Defendants.
10. Exclusive Remedy; Dismissal of Action; Jurisdiction of
Court
10.1. This Agreement shall be the sole and
exclusive remedy for any and all released claims of
Settlement Class members against the Settling Defendants,
and upon the later of entry of the Final Order and Judgment
by the District Court and the date a Settling Defendant
becomes bound by this Agreement, each Settlement Class
member shall be barred from initiating, asserting, or
prosecuting any released claims against each Settling
Defendant.
10.2. On the later of the Settlement Date and the
date a Settling Defendant becomes bound by this Agreement,
the Castano action shall be dismissed as against each
Settling Defendant. Settlement Class members may not
commence or prosecute actions against such Settling
Defendant on claims released pursuant to this Agreement
once the Final Order and Judgment is entered, or the date
such Settling Defendant becomes bound by this Agreement,
whichever comes later. The Castano Plaintiffs Legal
Committee agree to provide reasonable cooperation to stay
or dismiss, as appropriate, any action of any Settlement
Class member for such released claims pending in state or
federal court against any of the Settling Defendants.
10.3. The District Court shall retain exclusive
and continuing jurisdiction of Castano, all Parties,
Settlement Class members and Settling Defendants, to
interpret and enforce the terms, conditions, and
obligations of this Agreement. Nothing in this Agreement
shall be construed to divest or limit the jurisdiction of
the District Court with respect to claims which are alleged
or may be alleged by the Castano class against non-
settling Castano Defendants.
11. Term.
11.1. Unless earlier terminated in accordance
with the provisions of this Agreement, the duration of this
Agreement with respect to each Settling Defendant shall be
twenty-five (25) years from the Settlement Date.
11.2. Each Settling Defendant shall have the
right to terminate this Agreement with respect to that
Settling Defendant in the event of a full and final denial
of trial class certification in Castano as to any of the
Castano Defendants; provided that to exercise such right of
termination, the Settling Defendant must give written
notice of such termination to the District Court and to the
Castano Plaintiffs Legal Committee within thirty (30) days
of such denial provided further that any and all payments
made pursuant to this Agreement prior to the giving of such
notice by such Settling Defendant shall be nonrefundable;
and provided further that in the event of such termination
and in the event that the Plaintiffs and/or the Castano
Plaintiffs Legal Committee commence another putative class
action against the Castano Defendants in any other forum
which is substantially similar to or includes the
Settlement Class, Plaintiffs, the Castano Plaintiffs Legal
Committee, and each Settling Defendant shall enter into a
class settlement of such other putative class action on
substantially the same terms as this Agreement
11.3. Each Settling Defendant shall have the
right to terminate this Agreement with respect to such
Settling Defendant in the event that the number of persons
who exclude themselves from the Settlement Class during any
Notice Period is, in the sole and exclusive discretion of
such Settling Defendant, excessive; provided that such
Settling Defendant give written notice of such termination
to the District Court, the Castano Plaintiffs Legal
Committee and the Castano Board and provided further that
any and all payments made pursuant to this Agreement prior
to the giving of such notice by such Settling Defendant
shall be nonrefundable.
11.4. The performance of this Agreement is
expressly contingent upon the District Court's issuance of
the Final Order and Judgment. If the District Court fails
to issue such order within a sixty-day period following
conclusion of the Fairness Hearing, each Settling Defendant
may elect to terminate this Agreement with respect to such
Settling Defendant within twenty (20) business days of the
end of such period.
11.5. Sections 9.1, 10.1 and 10.2 of this
Agreement shall survive any termination of this Agreement
with respect to any and all Eligible Settlement Class
Members who shall have completed at least one Approved
Smoking Cessation Program under this Agreement.
11.6. Except as may be otherwise specifically
provided in this Agreement, a termination by a Settling
Defendant hereunder shall have the effect of rendering this
Agreement as having no force or effect whatsoever, null and
void ab initio, and not admissible as evidence for any
purpose in any pending or future litigation in any
jurisdiction.
12. Continuing Enforceability
Unless earlier terminated, as to the Settlement
Class, this Agreement and each provision of or obligation
arising from this Agreement shall continue and remain fully
executory and enforceable if a Settling Defendant
institutes or is subject to the institution against it of
any proceeding or voluntary case under title 11, United
States Code, or other proceeding seeking to adjudicate it
insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief
or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief or
protection of.debtors or other proceeding seeking the entry
of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for
any part of its property (each, a "Bankruptcy Proceeding").
Brooke Group has the right but not the obligation to cure
and to perform any and all obligations of Liggett under
this Agreement notwithstanding the occurrence and
continuation of any Bankruptcy Proceeding with respect to
Liggett; provided, however, that until such time as Liggett
decides whether to reject or assume this Agreement, Brooke
Group shall have the obligation to pay the annual
installments as provided by Section 6.4 hereof and any and
all rights the Settlement Class may have not to accept such
cure or performance in any Bankruptcy Proceeding are
waived.
13 Entry of Good Faith Bar Order on Contribution and
Indemnity Claims: Indemnification.
13.1. The Parties shall request that the District
Court enter an order barring and prohibiting the
commencement and prosecution of any claim or action by any
non-settling Castano Defendant against any Settling
Defendant, including but not limited to any contribution,
indemnity and/or subrogation claim seeking reimbursement
for payments made or to be made to any Settlement Class
member for claims settled under this Agreement. Settling
Defendants shall be entitled to dismissal with prejudice of
any such non-settling Castano Defendant's claims against
them which violate or are inconsistent with this bar.
13.2. Any Settlement Class member making a claim
against a non-settling person for what would be a claim
settled under this Agreement if asserted against a Settling
Defendant shall indemnify and hold harmless each Settling
Defendant from any claim ever asserted against such
Settling Defendant arising from such claim.
13.3. Claims by or on behalf of any Settlement
Class members against any non-settling Castano Defendants
are not released and shall not be barred, precluded,
limited, or reduced as a consequence of this Agreement or
the subsequent award and distribution of funds to such
Settlement Class members from the Settlement Fund, except
if and to the extent required under federal or state law
applicable under choice-of-law doctrines in the forum in
which any such claims may be instituted or pursued.
14. Expenses and Fees.
14.1. All expenses incurred in administering this
Agreement, including cost of Initial and Subsequent Notices
and costs of implementing and administering the CTCIR,
shall be paid from the Settlement Fund.
14.2. The reasonable fees and expenses of the
District Court, shall be paid by the Settling Defendants
separate and apart from the Settlement Fund.
14.3. Class Representatives shall be paid an
appropriate and reasonable amount by the Settling
Defendants separate and apart from the Settlement Fund,
subject to the approval of the District Court.
14.4. In the event of a failure by the District
Court to issue the Final Order and Judgment or a decision
by any Settling Defendant to exercise its right to withdraw
pursuant to Section 11.3 or 11.4 of this Agreement, the
Settling Defendants will bear, in accordance with the terms
of this Agreement, the costs of the Initial Notice incurred
to such point (in the case of Brooke Group and Liggett not
to exceed a total of $1 million; provided that Brooke
Group, Liggett and Plaintiffs shall each have the right to
terminate this Agreement in the event that the District
Court orders Initial Notice costing in excess of
$1,000,000, unless Brooke Group and/or Liggett and/or
Plaintiffs agree to pay such excess.)
15. Tax Status of Settlement Fund.
15.1. The Settlement Fund created under this
Agreement will be established and maintained as a Qualified
Settlement Fund ("QSF") in accordance with Section 468B of
the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder. Any Settling Defendant
shall be permitted, in its discretion, and at its own cost,
to seek a private letter ruling from the Internal Revenue
Service ("IRS") regarding the tax status of the Settlement
Fund. The parties agree to negotiate in good faith,
subject to District Court approval, any changes to the
Agreement which may be necessary to obtain IRS approval of
the Settlement Fund as a QSF.
15.2. The Castano Board is appointed to act as
administrator of the Settlement Fund. As administrator,
the Castano Board will undertake the following actions in
accordance with the regulations under IRC section 468B:
(a) the Castano Board shall apply for the tax
identification number required for the Settlement Fund; (b)
the Castano Board shall file, or cause to be filed, ail tax
returns the Settlement Fund is required to file under
federal or state laws; (c) the Castano Board shall pay from
the Settlement Fund all taxes that are imposed upon the
Settlement Fund by federal or state laws; and (d) the
Castano Board shall file, or cause to be filed, tax
elections available to the Settlement Fund, including a
request for a prompt assessment under IRC sec. 6501(d) if
and when the Castano Board deems it appropriate to do so.
15.3. The Settling Defendants, as transferors of
the Settlement Fund, shall prepare and file the information
statements concerning their settlement payments to the
Settlement Fund as required to be provided to the IRS
pursuant to the regulations under IRC section 468B.
16. Court's Settlement Approval Order.
This Agreement is subject to and conditioned upon
the issuance by the District Court, following the Fairness
Hearing, of a Final Order and Judgment granting final
approval of the Agreement in accordance with Fed. R. Civ.
P. 23 (e).
17. Effect of Default of Any Settling Defendant.
In the event any Settling Defendant fails to make
a payment due and owing under the terms of this Agreement,
or is in default Of this Agreement in any other respect,
the Castano Plaintiffs Legal Committee shall so notify the
District Court. The defaulting Settling Defendant shall
then be given up to 60 calendar days to "cure" the default.
If the defaulting Settling Defendant does not "cure" the
default in the time provided in this Section 17, the
Castano Plaintiffs Legal Committee may apply to the
District Court for relief.
18. Representations and Warranties.
Each Settling Defendant represents and warrants
that it (i) has all requisite corporate power and authority
to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby; (ii) the
execution, delivery and performance by such Settling
Defendant of this Agreement and the consummation by it of
the actions contemplated herein have been duly authorized
by all necessary corporate action on the part of such
Settling Defendant; and (iii) this Agreement has been duly
and validly executed and delivered by such Settling
Defendant and constitutes its legal, valid and binding
obligation.
19. Arbitration.
19.1. In the event that the Parties are unable to
agree, after good faith efforts, as to the determination or
calculation for any applicable year of Market Share or
Pretax Income hereunder, such determination or calculation
shall be submitted to binding arbitration under the
supervision of the District Court.
19.2. The Castano Plaintiffs Legal Committee
shall during the term of this Agreement have the right, at
its sole cost, to have an independent auditor review the
Settling Defendants' compliance with their payment
obligations under this Agreement; provided that any such
review will not be binding upon such Settling Defendants.
20. Most Favored Nation.
20.1. In the event of any settlement of Castano
with any Castano Defendant not a Party hereto (an "Other
Settlement"), the payments due from each Settling Defendant
in each year under this Agreement shall be reduced to the
extent, if any, necessary to ensure that (a) the percentage
in each year of each Settling Defendant's Pretax Income
represented by such payments under this Agreement is at
least ten percentage points less than (b) the percentage in
such year of such Castano Defendant's Pretax Income
represented by the average annual payments due from such
Castano Defendant under such Other Settlement; provided
further that, without the prior written consent of each
Settling Defendant, Plaintiffs and the Settlement Class
will not enter into any Other Settlement with any Castano
Defendant under which the percentage referred to in Section
20.1(b) is fewer than five percentage points more than the
percentage referred to in Section 20.1(a).
20.2. In the event of any Other Settlement, any
terms of which are more favorable to such Castano Defendant
than are the terms of this Agreement to a Settling
Defendant, such Settling Defendant shall have the right, in
addition to its rights under Section 20.1 hereof, to
replace or modify any or all of such terms of this
Agreement with, or add to this Agreement, any or all such
more favorable terms.
20.3. The respective rights of each Settling
Defendant under Sections 20.1 and 20.2 hereof are
cumulative and not exclusive of each other.
21. Miscellaneous.
21.1. This Agreement, including all Exhibits
attached hereto, shall constitute the entire Agreement
among the Parties with regard to the subject of this
Agreement and shall supersede any previous agreements and
understandings between the Parties with respect to the
subject matter of this Agreement. This Agreement may not
be changed, modified, or amended except in writing signed
by all parties, subject to District Court approval.
21.2. This Agreement shall be construed under
and governed by the laws of the State of Louisiana applied
without regard to its laws applicable to choice of law.
21.3. This Agreement may be executed by the
Parties in one or more counterparts, each of which shall be
deemed an original but all of which together shall
constitute one and the same instrument.
21.4. Upon the Settlement Date, Brooke Group and
Liggett shall:
(1) cooperate with the Castano Plaintiffs Legal
Committee in that they will take no steps to impede or
frustrate the Castano Plaintiffs Legal Committee
investigations into, or prosecutions of, any of the
non-settling Castano Defendants, so as to secure the just,
speedy and inexpensive determination of Castano against the
non-settling Castano Defendants,
(2) cooperate in and facilitate reasonable
non-party discovery from Brooke Group or Liggett in
connection with Castano, provided that such information is
not disclosed to any third parties except as required by
law, without the written consent of Brooke Group or
Liggett, and provided that such cooperation shall not be
deemed a waiver of applicable privileges;
(3) will review the issues relating to discovery
propounded by the Castano Plaintiffs Legal Committee
against Brooke Group or Liggett, confer with the Castano
Plaintiffs Legal Committee and, if appropriate, take
reasonable steps to facilitate judicial determinations of
the privileged nature of any documents or other information
within the possession, custody or control of Brooke Group
or Liggett which have been sought in discovery by the
Castano Plaintiffs Legal Committee,
(4) insofar as Brooke Group or Liggett have or
obtain any material information concerning any fraudulent
or illegal conduct on the part of any parties, including
non-settling Castano Defendants or their agents, designed
to frustrate or defeat the Castano Plaintiffs against the
non-settling Defendants, or which have the effect of
unlawfully suppressing evidence relevant to Castano, such
information will be disclosed to the appropriate judicial
and regulatory agencies.
21.5. This Agreement shall be binding upon and
inure to the benefit of the Settlement Class, the Settling
Defendants, and their representatives, heirs, successors,
and assigns.
21.6. Nothing in this Agreement shall be
construed to subject any Settling Defendant's parent or
affiliated company to the obligations or liabilities of
that Settling Defendant.
21.7. The headings of the Sections of this
Agreement are included for convenience only and shall not
be deemed to constitute part of this Agreement or to affect
its construction.
21.8. Any notice, request, instruction,
application for District Court approval or application for
District Court orders sought in connection with this
Agreement or other document to be given by any Party to any
other Party shall be in writing and delivered personally or
sent by registered or certified mail, postage prepaid, if
to the Settling Defendants to the attention of each
Settling Defendant's respective representative and to the
Castano Plaintiffs Legal Committee on behalf of Settlement
Class members, or to other recipients as the District Court
may specify. As of the date of this Agreement, the
respective representatives are as follows:
Castano Plaintiffs Legal Committee
Mr. Peter J. Butler, Sr.
Plaintiffs' Legal Committee
Energy Centre - 3Oth Floor
1100 Poydras Street
New Orleans, LA 70163
Mr. Wendell H. Gauthier
Gauthier & Murphy
3500 N. Hullen
Metairie, LA 70002
Hare, Wynn, Newell & Newton
The ParkWoods Bldg.
402 Office Park Dr., Suite 200
Birmingham, AL 35223
Brooke Group and Liggett
Mr. Bennett S. Lebow
Brooke Group Ltd.
International Place
100 S.E. Second Street
Miami, Florida 33131
Mr. Marc E. Kasowitz
Mr. Daniel R. Benson
Kasowitz, Benson, Torres & Friedman, L.L.P.
875 Third Avenue
New York, New York 10022
Mr. Michael L. Hirschfeld
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005-1413
The above designated representatives may be
changed from time to time by any Party upon giving notice
to all other Parties in conformance with this Section 21.8.
21.9. References to or use of a singular noun or
pronoun in this Agreement shall include the plural, unless
the context implies otherwise
IN WITNESS WHEREOF the Parties have executed
this Agreement as of the day and date first written above.
CASTANO PLAINTIFFS LEGAL COMMITTEE
By : Don Barrett
Date: March 12, 1996
By: Richard M. Heimann
Date: March 12, 1996
By: Russ Hermann
Date: March 12, 1996
BROOKE GROUP LTD.
By: Bennett S. Lebow
Date: March 12, 1996
LIGGETT GROUP, INC.
By: Bennett S. Lebow
Date: March 12, 1996