<PAGE>   1
                                                                  EXHIBIT 10.62


                  THIS CLASS B OPTION AGREEMENT (the "AGREEMENT"), dated as of
January 12, 1999, 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.

                  WHEREAS, concurrently with the execution of this Agreement,
the Liggett Parties and PM will execute the Formation and Limited Liability
Company Agreement of Brands LLC, a Delaware limited liability company (the
"COMPANY"), pursuant to which, among other things, the Grantor will contribute
the Marks to the Company in exchange for 100% of the Class A Shares and 100% of
the Class B Shares of the Company; and

                  WHEREAS, the Grantor desires to grant to PM an option to
acquire all of the Class B Shares, on the terms and subject to the conditions
contained in this Agreement.

                  NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, 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 hereby agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS


                  As used in this Agreement the following terms shall have the
following respective meanings:

                  "AFFILIATE" shall mean, with respect to any Person, any direct
or indirect subsidiary of such Person, any other Person that directly or through
one or more intermediaries, is controlled by, or is under common control with,
the specified Person, and, if such a Person is an individual, any member of the
immediate family (including parents, spouse and children) of such individual and
any trust whose principal beneficiary is such individual or one or more members
of such immediate family and any person who is controlled by any such member or
trust. As used in this definition, the term "CONTROL" (including with
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies, whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise.
Notwithstanding the foregoing, for purposes of this Agreement (i) the Liggett
Parties and their Subsidiaries shall not be deemed to be Affiliates of PM, and
(ii) PM and its Subsidiaries (including the Company) shall not be deemed to be
Affiliates of the Liggett Parties.

                  "AGREEMENT" shall have the meaning set forth in the recitals
hereof.
<PAGE>   2
                  "ASSIGN" shall mean to, directly or indirectly, sell, assign,
transfer, pledge, hypothecate, mortgage or dispose of, by gift or otherwise, or
in any way encumber, any Class B Shares.

                  "BRANDS" shall mean "Lark," "Chesterfield" and "L&M."

                  "BROOKE" shall have the meaning set forth in the preamble
hereof.

                  "CERTIFICATE" shall mean the Certificate of Formation of the
Company filed on behalf of the Company with the office of the Secretary of State
of the State of Delaware pursuant to the Delaware Act.

                  "CLASS A CLOSING" shall mean the closing of the exercise of
the Class A Option, as defined in Section 2.5 of the Class A Option.

                  "CLASS A OPTION AGREEMENT" shall mean that certain option
agreement, dated as of the date hereof pursuant to which PM (or any Permitted
Assignee thereunder) may purchase from the Grantor the Class A Shares owned by
it.

                  "CLASS B EXERCISE PRICE" shall have the meaning set forth in
Section 2.3.

                  "CLASS B OPTION" shall have the meaning set forth in 
Section 2.1.

                  "CLASS B OPTION CONSIDERATION" shall have the meaning set
forth in Section 2.1.

                  "CLASS B OPTION EXERCISE PERIOD" shall have the meaning set
forth in Section 2.2.

                  "CLASS B OPTIONHOLDER" shall have the meaning set forth in
Section 2.2.

                  "CLOSING" shall have the meaning set forth in Section 2.5(a).

                  "CLOSING DATE" shall mean the date on which the Closing
occurs.

                  "COMPANY" shall have the meaning set forth in the preamble
hereto. 

                  "DELAWARE ACT" means the Delaware Limited Liability Company
Act (6 Del. Co. section 18-101, ET SEQ.), as amended from time to time.

                  "GOVERNMENTAL ENTITY" means any government or subdivision
thereof, domestic, foreign or supranational or any administrative, governmental
or regulatory authority, agency, commission, tribunal or body, domestic, foreign
or supranational.

                  "GRANTOR" shall have the meaning set forth in the preamble
hereof.

                  "GUARANTORS" shall mean the guarantors of the Company's
obligations under the Loan Agreement (see definition of Loan Agreement below).




                                       -2-
<PAGE>   3
                  "LICENSE AGREEMENT" shall mean that certain license agreement,
attached as Exhibit A to the LLC Agreement, between the Company and PM and dated
as of the Closing Date, pursuant to which PM and its Affiliates will obtain the
exclusive (including with respect to the Company) license to use the Marks
within the United States (as defined in the License Agreement).

                  "Lien" shall have the meaning set forth in Section 3.2.
preamble hereof.

                  "LIGGETT" and "LIGGETT PARTIES" shall have the respective
meanings set forth in the preamble hereof.

                  "LLC AGREEMENT" shall mean that certain Formation and Limited
Liability Company Agreement to be entered into by the Liggett Parties and PM
concurrently with the execution of this Agreement.

                  "LMI" shall have the meaning set forth in the preamble hereof.

                  "LOAN AGREEMENT" shall mean the loan agreement entered into
between the Company and the lending institutions named therein, with respect to
the Loan Amount, which borrowing shall be guaranteed by the Grantor or such
other entity designated by the Liggett Parties which has received the Class B
Option Consideration and by any other holder of Class B Shares (such entities
are referred to herein as the Guarantors).

                  "LOAN AMOUNT" shall mean $134.9 million or, if less, the
maximum amount that the Company is able to borrow in the circumstances described
in Section 5.2 of the LLC Agreement.

                  "MARKS" shall mean all of the interest of the Liggett Parties
and any Affiliate of any Liggett Party in all trademarks, trade names, trade
dress, service marks, registrations and applications for registrations therefor,
in each case relating to each of the Brands, including any variation or product
line extension thereof and any derivative pertaining thereto.

                   "MATERIAL BREACH BY THE LIGGETT PARTIES" shall have the
 meaning set forth in Section 2.4(a) of the Class A Option Agreement.

                  "MATERIAL BREACH BY PM" shall have the meaning set forth in
Section 6.1(c) of the Class A Option Agreement.

                  "NOTICE OF EXERCISE" shall have the meaning set forth in
Section 2.5(a).

                  "PERSON" includes any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company or other legal entity or organization.

                  "PERMITTED ASSIGNEE" shall have the meaning set forth in
Section 2.2.

                  "PERMITTED LIEN" shall have the meaning set forth in 
Section 3.2.



                                       -3-






<PAGE>   4
                   "PM" shall have the meaning set forth in the preamble hereof.

                  "REDEMPTION PRICE" shall have the meaning set forth in Section
9.5(b) of the LLC Agreement.

                  "SUBSIDIARIES" shall mean, with respect to any Person, any
other Person in which such Person owns, directly or indirectly, 50% or more of
the voting interests.

                  "TRANSACTION AGREEMENTS" mean this Agreement, the Class A
Option Agreement and the LLC Agreement.

                                   ARTICLE 11

   GRANT AND EXERCISE OF OPTION; RELEASE OF OBLIGATIONS OF GUARANTORS; CLOSING

                  SECTION 2.1. GRANT OF CLASS B OPTION. The Grantor hereby
grants to PM (or a Permitted Assignee) an irrevocable option (THE "CLASS B 
OPTION") to purchase 100% of the Class B Shares, on the terms and subject to the
conditions set forth in this Agreement. In consideration of the grant of the
Class B Option, PM has delivered to the Grantor $145 million (the "CLASS B
OPTION CONSIDERATION"), receipt of which is hereby acknowledged.

                  SECTION 2.2. EXERCISE PERIOD. PM, any third party to whom PM
assigns the Class B Option in accordance with Section 10.6 (such assignee, a
"PERMITTED ASSIGNEE"), or any subsequent Permitted Assignee (a "CLASS B
OPTIONHOLDER") may exercise the Class B Option during the period beginning on
December 2, 2008 and ending at 5: 00 p.m. (New York City time) on March 1, 2009;
PROVIDED, however, that the Class B Optionholder may give the Liggett Parties
written notice extending such period to 5:00 p.m. (New York City time) on
September 1, 2009 if for any reason (including any legal or financial
impediment) the Class B Optionholder is unable to exercise the Class B Option
(or to cause the Company to redeem the Class B Shares in accordance with the LLC
Agreement) prior to March 1, 2009 (such period, as extended, the "CLASS B OPTION
EXERCISE PERIOD").

                  SECTION 2.3. CLASS B EXERCISE PRICE.

                  (a) Subject to Sections 2.3(b) and 23(c), the Class B Exercise
Price shall be the Redemption Price. 

                   (b) If a Material Breach by PM occurs, and upon payment of
 the amount required by the last sentence of Section 6.1(c) hereof, the Class
 B Exercise Price shall become $1.00.

                   (c) If the Liggett Parties refund the Class B Option
 Consideration in accordance with Section 2.4 hereof, the Class B Exercise Price
 shall become the sum of the Redemption Price and $145 million.



                                       -4-
<PAGE>   5

                  SECTION 2.4. REFUND OF CLASS B OPTION CONSIDERATION.

                  The Class B Option Consideration shall be repayable to PM by
the Liggett Parties in full promptly following demand by PM upon any Material
Breach by the Liggett Parties that is not cured to PM's reasonable satisfaction
within 120 days of written notice thereof from PM to the Liggett Parties.

                  SECTION 2.5. NOTICE OF EXERCISE; CLOSING; RELEASE OF
                               GUARANTOR OBLIGATIONS.

                  (a) In order to exercise the Class B Option, the Class B
Optionholder must give written notice (a "NOTICE OF EXERCISE") to the Liggett
Parties reciting its intention to exercise the Class B Option and setting forth
the time and place of the closing (the "CLOSING"); PROVIDED that the date of the
Closing set forth in such Notice of Exercise may not be more than 30 days from
the date thereof.

                  (b) At the Closing, the Liggett Parties shall deliver the
Class B Shares to the Class B Optionholder free and clear of any Liens, other
than Permitted Liens, and the Class B Optionholder shall deliver the Class B
Option Exercise Price and shall cause each Guarantor to be released of its
obligations as guarantor under the Loan Agreement.

                                   ARTICLE III

              REPRESENTATIONS AND WARRANTIES OF THE LIGGETT PARTIES


                  Each of the Liggett Parties hereby jointly and severally
represents and warrants to PM as follows:


                  SECTION 3. 1. INCORPORATION OF CERTAIN REPRESENTATIONS AND
Warranties. The representations and warranties of the Liggett Parties contained
in Article III of the LLC Agreement are hereby incorporated by reference in this
Agreement and shall have the same effect as if made in this Agreement.

                  SECTION 3.2. OWNERSHIP OF CLASS B SHARES. Immediately prior to
the Closing, the Grantor will have good and valid title to the Class B Shares
free and clear of any liens, claims, charges, security interests, options or
other legal or equitable encumbrances or restrictions (any of the foregoing, a
"Lien") other than Liens under the Loan Agreement ("PERMITTED LIENS"), and
assuming the person exercising the Class B Option has the requisite power and
authority to enter into this Agreement and to be the lawful owner of the Class B
Shares, upon delivery of the Class B Shares, good and valid title to such Class
B Shares will pass to the person exercising the Class B Option free and clear of
any Lien (other than Permitted Liens). Other than the Transaction Agreements,
the Class B Shares are not subject to any voting trust agreement or other
contract, agreement, arrangement, commitment or understanding, including any
such agreement, arrangement, commitment or understanding restricting or
otherwise relating to voting, distribution rights or disposition of such Class B
Shares.



                                       -5-

<PAGE>   6

                                   ARTICLE TV

                      REPRESENTATIONS AND WARRANTIES OF PM

                  PM hereby represents and warrants to the Liggett Parties as
follows:

                  SECTION 4.1. INCORPORATION OF CERTAIN REPRESENTATIONS AND
WARRANTIES. The representations and warranties of PM contained in Article IV of
the LLC Agreement are hereby incorporated by reference in this Agreement and
shall have the same effect as if made in this Agreement.

                                    ARTICLE V

                        COVENANTS OF THE LIGGETT PARTIES

                  SECTION 5.1. APPROVALS. The Liggett Parties shall use their
respective reasonable best efforts to obtain promptly any consent, order or
approval of, or any exemption by, any Governmental Entity in connection with the
consummation of the transactions contemplated by this Agreement, if any such
consent, order, approval or exemption is required.

                  SECTION 5.2. REPRESENTATIONS AND WARRANTIES. Each of the
Liggett Parties shall give written notice to PM promptly upon the occurrence of
any event that would cause or constitute a material breach or would have caused
a material breach, had such event occurred or been known to the Liggett Parties
prior to the date hereof, of any representations or warranties of the Liggett
Parties contained in any of the Transaction Agreements.

                  SECTION 5.3. ACCESS TO INFORMATION. Prior to the Closing, the
Liggett Parties shall, and shall cause each of their respective Subsidiaries to,
give PM and its representatives, employees, counsel and accountants full access,
during normal business hours and upon reasonable notice, to the employees,
agents, independent contractors, properties, books and records relating to the
Marks, only to the extent, in the reasonable judgment of counsel, permitted by
law, including antitrust law, and provided that the Liggett Parties and their
Subsidiaries shall not be obligated to make any disclosure which would cause
forfeiture of attorney-client privilege. The Liggett Parties shall notify PM in
writing if any disclosure is withheld in order to avoid such forfeiture. No
investigation pursuant to this Section shall affect or be deemed to affect any
representation or warranty made by the Liggett Parties. PM agrees that all
information received pursuant to this Section 5.3 shall be kept confidential and
PM shall not disclose such information to any third party unless, and only to
the extent, required to do so by applicable law.



                                       -6-


<PAGE>   7

                                   ARTICLE VI

                                 COVENANTS OF PM

                  PM covenants and agrees as follows:

                  SECTION 6.1. APPROVALS.

                  (a) PM shall use its reasonable best efforts to obtain
promptly any consent, order or approval of, or any exemption by, any
Governmental Entity in connection with the consummation of the transactions
contemplated by this Agreement, if any such consent, order, approval or
exemption is required.

                  (b) In the event a Material Breach by PM has occurred, PM
shall promptly prepay to the Liggett Parties the full amount of the Class B
Exercise Price minus $1.00, and the Class B Exercise Price shall be reduced to
$1.00.

                                   ARTICLE VII

              CONDITIONS TO THE OBLIGATIONS OF THE LIGGETT PARTIES

                  The obligations of the Liggett Parties under this Agreement
are subject to the fulfillment of the following conditions prior to or at the
Closing Date (any of which may be waived by them):

                  SECTION 7.1. REPRESENTATIONS, WARRANTIES, COVENANTS. The
representations and warranties of PM made or incorporated in this Agreement
shall be true and correct in all material respects as of the date hereof and,
except as specifically contemplated by this Agreement, on and as of the Closing
Date, as though made on and as of the Closing Date, and PM shall have performed
or complied in all material respects with the obligations and covenants required
by this Agreement to be performed or complied with by it by the time of the
Closing; PM shall have delivered to the Liggett Parties a certificate dated the
Closing Date and signed by an authorized officer confirming the foregoing.

                  SECTION 7.2. NO INJUNCTION OR GOVERNMENTAL LITIGATION. There
shall be no effective temporary restraining order, preliminary or permanent
injunction or order issued by any Governmental Entity which would prevent the
consummation of the transactions contemplated by the Transaction Agreements or
the License Agreement, and no Governmental Entity shall have commenced
litigation to enjoin the transactions contemplated by the Transaction Agreements
or the License Agreement.

                  SECTION 7.3. REGULATORY APPROVALS. All authorizations,
approvals, consents and waivers of any Governmental Entities required to
consummate the transactions contemplated by this Agreement, the other
Transaction Agreements or the License Agreement shall have been obtained and
shall not have been terminated, suspended or withdrawn as of the Closing Date.



                                      -7-

<PAGE>   8




                                  ARTICLE VIII

                       CONDITIONS TO THE OBLIGATIONS OF PM

                  Once PM has delivered a Notice of Exercise, its obligation to
purchase the Class B Shares is subject to the fulfillment of the following
conditions prior to or at the Closing Date (any of which may be waived by it):

                  SECTION 8.1. REPRESENTATIONS, WARRANTIES, COVENANTS. The
representations and warranties of the Liggett Parties made or incorporated in
this Agreement (other than those contained in Section 3.3 of the LLC Agreement)
shall be true and correct in all material respects as of the date hereof and,
except as specifically contemplated by this Agreement, on and as of the Closing
Date, as though made on and as of the Closing Date, and the Liggett Parties
shall have performed or complied in all material respects with the obligations
and covenants required by this Agreement to be performed or complied with by the
Liggett Parties by the time of the Closing; the representations and warranties
of the Liggett Parties contained in Section 3.3 of the LLC Agreement shall be
true and correct in all material respects as of the date hereof and on and as of
the date of the closing under the Class A Option Agreement, as though made on
and as of such date; and the Liggett Parties shall have delivered to PM a
certificate dated the Closing Date and signed by an authorized officer
confirming the foregoing.

                  SECTION 8.2. NO INJUNCTION OR GOVERNMENTAL LITIGATION. There
shall be no effective temporary restraining order, preliminary or permanent
injunction or order issued by any Governmental Entity which would prevent the
consummation of the transactions contemplated by the Transaction Agreements or
the License Agreement, and no Governmental Entity shall have commenced
litigation to enjoin the transactions contemplated by the Transaction Agreements
or the License Agreements.

                  SECTION 8.3. REGULATORY APPROVALS. All authorizations,
approvals, consents and waivers of any Governmental Entities required to
consummate the transactions contemplated by this Agreement, if any, shall have
been obtained and shall not have been terminated, suspended or withdrawn as of
the Closing Date.

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.1. TERMINATION.

                  (a) This Agreement may be terminated at any time prior to the
Closing by:

                           (i) the mutual consent of the Liggett Parties and PM;
                  or





                                      -8-
<PAGE>   9

                           (ii) by PM upon a Material Breach by the Liggett
                  Parties; provided that a termination under this 

                  SECTION 9.1 (a)(ii) must occur no later than 10 days after
the date of repayment of the Class B Option Consideration.

                  (b) This Agreement will terminate automatically at the
expiration of the Class B Option Exercise Period if the Class B Optionholder
does not deliver a Notice of Exercise during the Class B Option Exercise Period.

                  SECTION 9.2. PROCEDURE AND EFFECT OF TERMINATION. In the event
of termination of this Agreement by either or both of PM and the Liggett Parties
pursuant to Section 9.1, written notice thereof shall forthwith be given by the
terminating party to the other party hereto, and this Agreement shall thereupon
terminate and become void and have no effect, and the transactions contemplated
hereby shall be abandoned without further action by the parties hereto;
PROVIDED, HOWEVER, that such termination shall not relieve any party hereto of
any liability for any breach of any representation or warranty made herein as of
the date hereof or of any covenant contained herein. If this Agreement is
terminated as provided herein, all filings, applications and other submissions
made hereunder shall, to the extent practicable, be withdrawn from the persons
to which they were made.

                                    ARTICLE X

                                  MISCELLANEOUS

                  SECTION 10.1. REASONABLE BEST EFFORTS. Each of the parties to
this Agreement agrees to use its reasonable best efforts to cause the conditions
to the Closing to be satisfied; PROVIDED, HOWEVER, that, subject to the terms
and conditions of the License Agreement, PM shall not be required to agree to
divest or hold separate any brand, product, business or assets or to take or
agree to take any action that limits its freedom of action with respect to, or
its ability to retain, any of the Marks or any brand, product, business or other
asset of PM or its Affiliates.

                  SECTION 10.2. COUNTERPARTS. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party. Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section, provided receipt of copies of such counterparts is
confirmed.

                  SECTION 10.3. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
reference to the choice of law principles thereof.

                  SECTION 10.4. ENTIRE AGREEMENT. There are no oral agreements,
understandings, representations or warranties between the parties with respect
to the subject matter hereof


                                       -9-

<PAGE>   10

                  SECTION 10.5. EXPENSES. Whether or not the transactions
contemplated hereby are consummated, all legal and other costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses.

                  SECTION 10.6. NOTICES. All notices provided for in this
Agreement shall be in writing, duly signed by the party giving such notice, and
shall be hand delivered, faxed or mailed by registered or certified mail or
overnight courier service, as follows:

                 (a)      if given to PM or its designee:

                          Philip Morris Incorporated
                          120 Park Avenue
                          New York, NY 10017
                          Facsimile: (917) 663-5399
                          Attention: General Counsel, PM USA

                          with a copy to:

                          Wachtell, Lipton, Rosen & Katz
                          51 West 52nd Street
                          New York,NY 10019
                          Facsimile: (212) 403-2000
                          Attention: Elliott V. Stein

                  (b)     if given to the Liggett Parties:

                          c/o Brooke Group Ltd. 
                          100 S.E. Second Street, 32nd floor 
                          Miami, Florida 33131
                          Facsimile: (305) 579-8009
                          Attention: Richard J. Lampen

                          with a copy to:

                          Milbank Tweed Hadley & McCloy
                          1 Chase Manhattan Plaza
                          New York, New York 10005
                          Facsimile: (212) 530-5219
                          Attention: Michael W. Goroff

All such notices shall be deemed to have been given when received. The address
for receipt of notice may be changed by providing written notice to the Company.

                  SECTION 10.7. SUCCESSORS AND ASSIGNS. PM may Assign this
Agreement at any time; PROVIDED, that the assignee assumes all obligations of PM
under this Agreement, and



                                       -10-



<PAGE>   11

PM is not relieved of any payment obligations hereunder. The Liggett Parties may
not Assign this Agreement without the written consent of PM.

                  SECTION 10.8. HEADINGS; DEFINITIONS. The Section, Article and
other headings contained in this Agreement are inserted for convenience of
reference only and will not affect the meaning or interpretation of this
Agreement. All references to Sections or Articles contained herein mean Sections
or Articles of this Agreement unless otherwise stated. All capitalized terms
defined herein are equally applicable to both the singular and plural forms of
such terms.

                  SECTION 10.9. AMENDMENTS AND WAIVERS. This Agreement may not
be modified or amended except by an instrument or instruments in writing signed
by the party against whom enforcement of any such modification or amendment is
sought. PM, on the one hand, or the Liggett Parties, on the other hand, may,
only by an instrument in writing, waive compliance by the other with any term or
provision hereof on the part of such other party hereto to be performed or
complied with. The waiver by any party hereto of a breach of any term or
provision hereof shall not be construed as a waiver of any subsequent breach.

                  SECTION 10.10. INTERPRETATION; ABSENCE OF PRESUMPTION. (a)
For the purposes hereof, (i) words in the singular shall be held to include the
plural and vice versa and words of one gender shall be held to include the other
genders as the context requires, (ii) the terms "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (including all of the Schedules
and Exhibits hereto) and not to any particular provision of this Agreement, and
Article, Section, paragraph and Exhibit references are to the Articles,
Sections, paragraphs and Exhibits to this Agreement unless otherwise specified,
(iii) the word "including" and words of similar import when used in this
Agreement shall mean "including, without limitation," unless the context
otherwise requires or unless otherwise specified, (iv) the word "or" shall not
be exclusive, and (v) provisions shall apply, when appropriate, to successive
events and transactions.

                  (b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.

                  SECTION 10.11. SEVERABILITY. Any provision hereof which is
invalid or unenforceable shall be ineffective to the extent of such invalidity
or unenforceability, without affecting in any way the remaining provisions
hereof.

                  SECTION 10.12. FURTHER ASSURANCES; SPECIFIC PERFORMANCE. The
Liggett Parties, and PM agree that, from time to time, whether before, at or
after the Closing Date, each of them will, and will cause their respective
Affiliates to, execute and deliver such further instruments of conveyance and
transfer and take such other action as may be necessary to carry out the
purposes and intents hereof. PM and the Liggett Parties each acknowledge that,
in view of the uniqueness of the Marks, PM would not have an adequate remedy at
law for money damages in the event that this Agreement were not performed in
accordance with its terms, and therefore agree that PM shall be entitled to
specific enforcement of the terms hereof in addition to any other remedy to
which PM may be entitled at law or in equity.




                                      -11-


<PAGE>   12




                  SECTION 10. 13. NO LIMITATION OF REMEDIES. The remedies
provided herein with respect to a Material Breach by the Liggett Parties or a
Material Breach by PM are not liquidated damages, and the parties shall be
entitled to pursue all remedies available at law or equity in addition to such
remedies.

                   IN WITNESS WHEREOF, this Agreement has been signed by or on
 behalf of each of the parties as of the day first above written.


                                 BROOKE GROUP LTD.


                                 By: /s/ Bennett S. LeBow
                                     ------------------------------------------
                                     Name: Bennett S. LeBow
                                     Title: Chairman of the Board and President


                                 LIGGETT & MYERS INC.



                                 By: /s/ Samuel M. Veasey
                                     ------------------------------------------
                                     Name: Samuel M. Veasey
                                     Title: Vice President



                                 EVE HOLDINGS INC.



                                 By: /s/ Bennett S. LeBow
                                     ------------------------------------------
                                     Name: Bennett S. LeBow
                                     Title: Chairman of the Board and President



                                 LIGGETT GROUP INC.


                                 By: /s/ Samuel M. Veasey
                                     ------------------------------------------
                                     Name: Samuel M. Veasey
                                     Title: Senior Vice President



                                 By: /s/ M.E. Szymanczyk
                                     ------------------------------------------
                                     Name: M.E. Szymanczyk
                                     Title: Chief Executive Officer




                                      -12-