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                                                                   Exhibit 10.43

                 ADDENDUM TO INITIAL STATES SETTLEMENT AGREEMENT
                 -----------------------------------------------

         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 wish to
expand upon the Initial Settlement, through this Addendum to Settlement
Agreement to provide for additional cooperation by the Settling Defendants with
the Initial Settling States, and to provide Settling Defendants with assurances
that the Initial Settling States will seek to ensure that any Global Settlement
provide for financial terms for Liggett that reflect appropriate recognition of
Liggett's cooperative efforts.

         NOW THEREFORE, in consideration of the foregoing and of the promises
set forth in this Addendum to Settlement Agreement, the undersigned Attorneys
General, on their own behalf and on behalf of their respective States, and
Liggett and Brooke Group hereby stipulate and agree that the Initial Settlement
shall be changed and amended as follows:



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         1. With respect to each of the Initial Settling States defined in the
Agreement of March 15, 1996 and March 1997 Brooke Group and Liggett, upon
execution of this Amendment to the March 15, 1996 Agreement, shall cooperate in
and facilitate reasonable third party discovery from Brooke Group and Liggett in
connection with any Attorney Generals Action, provided that such information
disclosed or provided by Brooke Group and/or Liggett is not disclosed to any
third parties except as required by law, including non-settling Attorneys
General.

         2. The March 15, 1996 Agreement shall be deemed amended to expressly
include the following provisions from the March 1997 Attorneys General
Agreement.

                  ss.4.1

                  ss.4.2

                  ss.4.3.1, ss.4.3.2, ss.4.3.3, ss.4.3.4

                  ss.4.5 to the extent this provision increases the required
                  compliance with FDA Rules.
 
                  ss.4.8

                  ss.5

         3. The following sections shall be deleted from the March 15, 1996
Agreement or Amended as set forth below:

                  ss.4.1 is deleted

                  ss.4.4 is replaced by ss.4.7 of the March 1997 agreement.

                  ss.4.5 is amended by supplementing it with ss.4.8 of the 
                  March 1997 Agreement to the extent the provision of 

                  ss.4.8 of the March 1997 Agreement require greater 
                  compliance with FDA Rules.

         4. Section 4 of the March 15, 1996 Agreement shall in all other
respects remain in full force and effect.

         5. Section 5.7 is to be deleted from the March 15, 1996 Agreement.

         6. Section 8.2 of the March 15, 1996 Agreement shall be amended to
substitute the words "Non-Settling Tobacco Companies" for the current word
"Defendants".

         7. Section 16.12 of the March 15, 1996 Agreement will be retained for
the continuing jurisdiction of the court over documents produced under this
Agreement as amended.



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         IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and date first written above.

                  STATE OF MISSISSIPPI               STATE OF LOUISIANA
                  By: /s/ Mike Moore                 By: /s/ Richard P. Leyoub
                      --------------                     ---------------------
                  Attorney General                   Attorney General


                  STATE OF WEST VIRGINIA             BROOKE GROUP LTD.
                  By: /s/ Darrell V. McGraw          By: /s/ Bennett S. LeBow
                      ---------------------              --------------------
                  Attorney General


                  STATE OF FLORIDA                   LIGGETT GROUP INC.
                  By: /s/ Robert Butterworth         By: /s/ Bennett S. LeBow
                      ----------------------             --------------------
                  Attorney General



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