Document:

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                                                                   EXHIBIT 10.31

                              AMENDED AND RESTATED
                       MANUFACTURING AND LICENSE AGREEMENT

            THIS AMENDED AND RESTATED MANUFACTURING AND LICENSE AGREEMENT (this
"AGREEMENT") is entered into this 12th day of October, 1999 between POWELL
MANUFACTURING COMPANY, INC, a South Carolina corporation with its executive
offices at P.O. Box 707, Bennettsville, South Carolina 29512-707 ("POWELL") and
STAR SCIENTIFIC, INC., a Delaware corporation with its executive offices at 16
South Market Street, Petersburg, Virginia 23803 ("STAR"). This Agreement amends
and restates the terms of that certain Manufacturing and License Agreement dated
as of January 25, 1999, by and between Powell and Star, as amended prior to the
date hereof.

                                    RECITALS

            WHEREAS, Star holds certain exclusive licensing rights under United
States patents and patents pending for methods of curing tobacco and tobacco
products (the "STAR PATENT RIGHTS"); and

            WHEREAS, Star desires to have tobacco curing barns manufactured for
it pursuant to its specifications to be used by Star and others for the curing
of tobacco pursuant to Star's licensing rights; and

            WHEREAS, Powell is in the business of manufacturing tobacco curing
barns and is willing to manufacture barns for Star as described above;

            NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                    AGREEMENT

1.          PURCHASE AND SALE REQUIREMENTS.

            1.1         TERM; TERMINATION.

                         (a)         The terms of this Agreement (as amended
hereby) shall become effective on the date hereof and expire on [***] (the
"EXPIRATION DATE"). Notwithstanding the foregoing, this Agreement will
automatically renew for three successive one year periods unless either party
provides written notice to the other on or before the date which is nine (9)
months prior to the expiration of the then current term of the Agreement of such
party's election to terminate the Agreement.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.
<PAGE>   2

                        (b)         Either party (the "NONBREACHING PARTY")
shall have the right to terminate this Agreement upon [***] prior
written notice to the other party (the "BREACHING PARTY") upon the occurrence of
the breach of any material provision of this Agreement, unless the Breaching
Party cures or corrects such breach within the [***] after the
written notice by the Nonbreaching Party.

            1.2         REQUIREMENTS; SPECIFICATIONS. Upon the terms and subject
to the conditions set forth in this Agreement, Star will order and purchase from
Powell, and Powell will sell to Star, Star Barns (as defined below) to be
delivered on or prior to the Expiration Date. Star shall purchase exclusively
from Powell up to [***] Star Barns per Production Period (as defined below).
Thereafter, Star may purchase additional Star Barns during such Production
Period [***] The Star Barn shall be manufactured to the specifications set forth
on Exhibit A attached hereto. Subject to the preceding sentence, and with the
prior written consent of Star, which shall not be withheld unreasonably, Powell
will have the right to make changes in the design, components and materials used
in the Star Barn so long as such alterations do not change the specifications
set forth on Exhibit A and, in Powell's reasonable judgment, negatively effect
the Star Barn's quality, performance or conformance to applicable warranties.

            1.3         GOVERNING TERMS. All Star Barns purchased under the
terms and conditions of this Agreement shall be subject to the commercial terms
and conditions set forth on the Star purchase order attached hereto as Exhibit
B. Any attempt by the parties to alter such terms and conditions shall be null
and void, unless otherwise agreed by the parties in writing. In the event of any
conflict between the purchase order and this Agreement, the terms of this
Agreement will prevail.

2.          ORDERS AND PRODUCTION.

            2.1         PRIOR ORDER. The parties acknowledge that, on
July 16, 1999, Star submitted, and Powell accepted, Powell purchase order No. 4
for two hundred (200) Star Barns for delivery by January, 2000 (the "PRIOR
ORDER").

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.
<PAGE>   3
            2.2         FUTURE ORDERS.

                        (a)         The parties agree that, contemporaneously
with the execution of this Agreement, Star will: (i) resubmit the Prior Order to
reflect the [***] (the "REPLACEMENT ORDER"); (ii) submit a purchase
order for four hundred (400) Star Barns for delivery by June 30, 2000; and (iii)
submit a purchase order for four hundred (400) Star Barns for delivery by
December, 2000. All such purchases shall be subject to the terms and conditions
of this Agreement, including the pricing provisions of Section 3. [***]

                        (b)         Star will submit all future orders for Star
Barns using the purchase order attached hereto as Exhibit B. Star agrees to use
commercially reasonable efforts to submit purchase orders for all Star Barns
that are to be delivered during any Production Period (as defined below) that
begins on or after July 1, 2000, prior to the commencement of such Production
Period. As used herein, "PRODUCTION PERIOD" shall mean (i) the period commencing
on the date hereof and ending June 30, 2000, or (ii) any subsequent twelve month
period commencing July 1 and ending June 30. All future orders must be
accompanied by a production schedule mutually agreed upon by the parties. [***]

            2.3         PRODUCTION.

                        (a)         Powell agrees to manufacture all Star Barns
to be delivered hereunder using new materials of good quality and good
manufacturing practices. Powell shall deliver the Star Barns on the dates set
forth in the purchase orders submitted by Star to they extent they are
consistent with the agreed upon production schedules; provided, that Powell will
not be required to manufacture and deliver, in any Production Period, more than
nine hundred and sixty (960) Star Barns unless it has received a binding
purchase order for such additional Star Barns at least four (4) months prior to
the commencement of such Production Period; provided, further, that Powell will
not be required to manufacture and deliver, in any Production Period, more than
[***]

                        (b)         In the event Powell breaches its obligations
under Section 2.3(a) by failing to deliver Star Barns on the dates set forth in
Star's purchase orders, the Purchase Price of such delayed Star Barns shall be
subject to reduction as provided in this Section 2.3(b). [***]

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        3

<PAGE>   4

[***]

3.          PRICING; PAYMENT.

            3.1         PURCHASE PRICE. The purchase price (the "PURCHASE
PRICE") for each of the Star Barns ordered and purchased pursuant to the terms
of this Agreement shall be [***] subject to the adjustments set forth in Section
4 below.

            3.2         PAYMENT TERMS. The parties acknowledge that Powell's
standard payment terms for qualifying customers are net thirty (30) days. Under
the standard payment terms, any payments received after thirty days will incur a
late fee of [***]. Star will provide Powell with evidence of available credit
facilities, financial statements and such other information as Powell shall
reasonably request in order to determine whether Star qualifies for such terms.
[***] On the first Monday of each Payment period during the term of this
Agreement, Star shall make the Payments, in the amount of the applicable
Purchase Price multiplied by the weekly estimate (or by two or four times
the Weekly Estimate, as applicable, by wire transfer into Powell's account
pursuant to the wiring instructions set forth on Exhibit C attached hereto.
Powell will send invoices to Star with each shipment of Star Barns and the
Payments will be applied against such invoices in chronological order. Any
Payment which is not received by Powell within three (3) days of its due date
will incur a one and [***] late fee charge. Powell will apply a credit for the
Payments made under the Prior Order at the Standard Price toward the Payments to
be made pursuant to the Replacement Order at the Discount Price.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        4

<PAGE>   5

4.          PRICE ADJUSTMENTS.

[***]

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        5

<PAGE>   6

[***]

5.          DELIVERY.

            All Star Barns will be delivered F.O.B. Powell's facility in
Bennettsville, South Carolina, unless otherwise agreed to in writing by the
parties. If requested by Star, Powell will use its reasonable best efforts to
assist in the delivery and setting of the Star Barns, however, Star shall be
solely responsible for all transport costs, setting charges, permit costs, taxes
and insurance costs for deliveries to customer sites. If Star contracts with
Powell for transport and setting, transport charges shall be based on [***].
Star shall have the responsibility to provide the hook-up of all utilities at
the customer site.

6.          LIMITED WARRANTY.

            Each Star Barn sold to Star hereunder shall be sold with the Limited
Warranty attached hereto as Exhibit E. [***] In addition to the limitations set
forth in said Exhibit E, it is further agreed that no warranty is granted or to
be implied that the Star Barn will cure tobacco to Star's specifications or
those of any other party. EXCEPT AS EXPRESSLY PROVIDED HEREIN, POWELL MAKES NO
EXPRESS OR IMPLIED WARRANTIES OF ANY KIND OR NATURE WITH RESPECT TO THE STAR
BARNS.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        6

<PAGE>   7

7.          SPARE PARTS.

            Attached hereto as Exhibit F is a list of spare parts for the Star
Barn recommended by Powell. Powell shall make such spare parts available to Star
and others directly and/or through normal dealer networks, for a period of [***]
following the delivery of the last Star Barn to be delivered hereunder.

8.          TRAINING.

            Powell will provide to Star and/or others, at Powell's expense,
three (3) annual training seminars on the mechanical and electrical operation of
a Star Barn. At least two of such seminars shall be at locations in Virginia,
North Carolina and/or Kentucky, as specified by Star.

9.          LICENSE.

            For so long as this Agreement remains in effect, Star hereby grants
to Powell a limited, non-transferable license under the Star Patent Rights for
the purpose of manufacturing and selling, exclusively to Star, the Star Barns
pursuant to purchase orders submitted by Star. [***]

10.         TRADE SECRETS AND CONFIDENTIAL INFORMATION.

            10.1        CONFIDENTIALITY. Powell acknowledges that it will be
entrusted with Trade Secrets and Confidential Information that Star has
developed and has a legitimate business interest in protecting. Pursuant
thereto, Powell agrees:

                        (a)         to treat confidential information and not,
without the prior written approval of Star, to use (other than in the
performance of its duties hereunder), publish, disclose, copyright or authorize
anyone else to use, publish, disclose or copyright: any Trade Secrets during the
terms of this Agreement and subsequent thereto; or Confidential Information
either during the term hereof or for three (3) years following the expiration or
termination of this Agreement;

                        (b)         to disclose the Confidential Information
only to those employees, consultants or other agents necessary for Powell to
perform this Agreement.

            10.2        EXCEPTIONS.  The restrictions in Section 10.1 shall not
apply to any information which:

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        7

<PAGE>   8

                        (a)         is in the public domain by use and/or
publication at the time of its receipt by Powell or enters the public domain
thereafter through no fault of Powell;

                        (b)         was validly in Powell's possession from a
source other than Star prior to receipt;

                        (c)         was properly obtained by Powell from a third
party, provided Powell was not under any confidentiality obligation to such
third party; or

                        (d)         was previously developed independently by
Powell, as shown by written documentation delivered to Star within thirty (30)
days of the receipt of such information.

            10.3        BINDING ON OTHERS. Powell further agrees that it will
require each of its employees, consultants or other agents to be bound by the
restrictions stated herein and that, upon the request of Star, Powell will
provide evidence satisfactory to Star of having fulfilled such requirement to
Star.

            10.4        DEFINITIONS.

                        (a)         "CONFIDENTIAL INFORMATION" shall mean any
and all information, whether or not in tangible form, of a confidential,
proprietary or secret nature belonging to Star or licensed by it, other than
Trade Secrets, which is material to Star and not generally known by the public,
including but not limited to, all information annotated by a legend, stamp or
other written identification as "Confidential."

                        (b)         "TRADE SECRET" shall mean any and all
information, whether or not in tangible form, belonging to Star or licensed by
it, which derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use and which is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy. Without limiting the generality of the foregoing, Trade Secrets shall
include but are not limited to studies, results, reports, price lists, product
codes, product strategies, technical or nontechnical data, formulae, techniques,
drawings, designs, processes, financial data, financial plans, product plans,
marketing plans, advertising plans, lists of actual or potential customers or
suppliers, and related items.

11.         MISCELLANEOUS.

            11.1        ENTIRE AGREEMENT. This Agreement and the attached
exhibits constitute the entire agreement of the parties with respect to the
subject matter hereof, and supersede any prior agreement or understandings of
the parties. There are no other oral or written understandings or agreements
between Powell and Star relating to the subject matter hereof. This Agreement
may not be modified except by a writing signed by both parties. This Agreement
may be executed in multiple originals

                                        8

<PAGE>   9

and counterparts. Both parties agree and acknowledge that the terms of any sales
orders, invoices, confirming memoranda, standard business form or other similar
writing issued after the date of this Agreement shall be governed by this
Agreement and shall not modify the terms hereof unless expressly agreed to in
writing by the parties hereto.

            11.2        SEVERABILITY. All provisions of this Agreement are
severable, and any which are deemed invalid or unenforceable shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating the remaining provisions hereof and this Agreement shall be
enforced and interpreted as if the invalid or unenforceable provisions were not
contained herein and any partially valid and enforceable provisions shall be
enforced to the extent valid or enforceable.

            11.3        FORCE MAJEURE. Notwithstanding anything herein to the
contrary, any failure or delay in the performance by Powell or Star of its
obligations hereunder (other than performance of any obligations to make any
payment) shall not be a breach of this Agreement if such failure or delay arises
out of or results from fire, storm, flood, earthquake, or other acts of God,
explosions, wars, insurrections, government order or regulation, strikes, work
stoppages or slowdowns, unavailability of fuel or utilities, unforeseen
equipment failure, inability to obtain raw materials or components despite best
efforts to do so, or other causes beyond the control of such party. Any such
delay shall extend the time allowed for performance or excuse performance, in
whole or in part, as may be reasonable, provided that as soon as performance is
possible the non-performing party shall immediately resume performance and, in
no event shall performance be excused for more than sixty (60) days.

            11.4        NOTICES. Any notices required by this Agreement shall be
deemed given if sent by certified or registered mail, return receipt requested,
by a recognized overnight delivery service, or by confirmed facsimile
transmission, to the address of the party as follows, unless and until otherwise
notified in writing, with receipt effective only on actual receipt:

                                        9

<PAGE>   10

<TABLE>
<S>                                          <C>
TO POWELL :                                    TO STAR:

Powell Manufacturing , Inc.                    Star Scientific, Inc.
P.O. Box 707                                   16 South Market Street
Bennettsville, South Carolina 29512-707        Petersburg, Virginia 23803
Attn.: Richard Herskowitz                      Attn.: Jim McNulty
Fax : (843) 479-7739                           Fax : (804) 861-6215

With a copy (which shall not constitute
Notice) to:                                    Paul, Hastings, Janofsky & Walker LLP
                                               1299 Pennsylvania Avenue, N.W.
                                               Tenth Floor
                                               Washington, D.C. 20004-2400
                                               Attention:  Paul L. Perito, Esq.
                                               Telecopier No.:  (202) 508-9700
and

                                               Paul, Hastings, Janofsky & Walker LLP
                                               600 Peachtree Street
                                               Suite 2400
                                               Atlanta, Georgia 30308
                                               Attention:  W. Andrew Scott, Esq.
                                               Telecopier No.:  (404) 815-2424
</TABLE>

            11.5        GOVERNING LAW. This Agreement and the relationship
between the parties hereunder shall be governed by and construed in accordance
with the internal laws of the Commonwealth of Virginia. Any claim or action
under this Agreement shall be brought in the state or federal courts sitting in
the Commonwealth of Virginia, and the parties hereby consent to the personal
jurisdiction of such courts.

            11.6        BINDING EFFECT. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and assigns. Notwithstanding the foregoing neither this Agreement nor
the license granted hereunder may be assigned by Powell to any other party
without the prior written consent of Star.

                         (SIGNATURES ON FOLLOWING PAGE)

                                       10

<PAGE>   11

            IN WITNESS WHEREOF, the parties have cause this Agreement to be duly
executed as of the date first written above.

POWELL MANUFACTURING COMPANY, INC.                   STAR SCIENTIFIC, INC.

By:____________________________              By:___________________________
Name: A. Richard Herskowitz                  Name:

                                       11<PAGE>   1
                                                                   EXHIBIT 10.32

            THIS AGREEMENT is made as of this 12th day of October, 1999 by and
between STAR SCIENTIFIC, INC., a Delaware corporation ("Star") and BROWN &
WILLIAMSON TOBACCO CORPORATION, a Delaware corporation ("B&W") (individually, a
"Party" and collectively, the "Parties") and provides as follows:

                               FACTUAL BACKGROUND

            Star, in conjunction with its Affiliates, has developed know-how for
the manufacture of low-nitrosamine processed tobacco for use in cigarettes, pipe
tobacco, cigars and smokeless tobacco products. Star is a distributor of such
low-nitrosamine tobacco and B&W has agreed to purchase low-nitrosamine Virginia
flue-cured tobacco and subject to the satisfaction of certain conditions, to
purchase low-nitrosamine Burley tobacco from Star. [***] B&W has agreed to
finance the purchase of curing barns to assist Star in the production of low
nitrosamine tobacco products which can be marketed by Star, B&W and others in
the industry on the terms and conditions provided for herein.

                                    SECTION 1
                                  DEFINITIONS

            Barns means the specially fabricated mobile curing barns utilized by
Star as part of the Star Cure(TM) Process.

            BAT means British American Tobacco, p.l.c., a public limited
company, incorporated under the laws of England and its successors and assigns.

            [***]

            B&W Affiliates means BAT, B&W and all other domestic and
international companies in which BAT owns, directly or indirectly, a thirty
percent (30%) or greater equity interest, and which agree in writing to be bound
by the terms and conditions of this Agreement at the time they purchase Star
Cure(TM) Tobacco (through B&W) pursuant to the provisions hereof.

            B&W Brands means with respect to any B&W Affiliate the brand names
utilized by such B&W Affiliate for Tobacco Products whether by ownership of the
marks or by a license arrangement.

            B&W Technologies means B&W's proprietary technologies and Trade
Secrets which it makes available to Star on a royalty-free basis pursuant to a
license as provided for herein.

            Burley Incremental Cost Factor means the incremental cost per pound
(if any) of processing Burley tobacco with the Star Cure(TM) Process above the
cost per pound of processing flue-cured tobacco with the Star Cure(TM) Process.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.
<PAGE>   2

            Business Day means any day or days other than a Saturday, Sunday or
United States federal holiday or a state holiday in the State of Georgia.

            Claims means any statements or any assertions in any advertisement,
packaging, labeling, public statement or other communication, directly or
indirectly, relating to health or other relevant issues, and intended for public
dissemination by Star or any manufacturer of Tobacco Products manufactured with
Star Cure(TM) Tobacco that the product is a reduced risk or less hazardous
product.

            Credit Facility means the secured credit facility to be provided by
B&W to Star for the acquisition of Barns by Star pursuant to the Loan and
Security Agreements substantially in the form of Exhibit A annexed hereto.

            Green Weight means the weight of the Star Cure(TM) Tobacco at the
time it is shipped to B&W from Star's processing facility.

            Index means the Bureau of Labor Statistics' Producer Price Index for
Intermediate Materials, Supplies and Components.

            [***]

            Limited License and Option Agreement means the Agreement in the form
of Exhibit B annexed hereto.

            Low TSNA Cigarette means a cigarette developed and tested as
provided for in Sections 2.03, 2.04 and 2.05 of this Agreement manufactured with
any amount of Star Cure(TM) Tobacco.

            Market Price means with respect to either flue-cured or Burley
tobacco (which has not been cured by the Star Cure(TM) Process) the average U.S.
Department of Agriculture market price per pound paid at the end of the selling
season, Green Weight, for such type of tobacco in the United States.

            [***]

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        2

<PAGE>   3

            Other Tobacco Products means roll-your-own tobacco products, cigars,
pipe tobacco and smokeless tobacco products or any other tobacco product as
defined by the United States Federal Trade Commission, excluding those products
that may be defined as tobacco cessation products.

            Person means any natural person, general or limited partnership,
corporation, limited liability company, firm, association or other legal entity
other than B&W Affiliates.

            Ppm means parts per million.

            Premium means [***]

            Purchase Credit means [***]

            Purchase Price means [***]

            Star Affiliates means: (i) Regent Court Technologies, a general
partnership ("Regent"), (ii) Jonnie R. Williams ("Williams") and Francis
O'Donnell, Jr., M.D. ("O'Donnell") (but only for as long as Williams or
O'Donnell, as the case may be, would be deemed to be an affiliate of Star under
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder), and (iii) all other domestic and international
companies in which Star, Regent, Williams or O'Donnell (but only for as long as
Williams or O'Donnell, as the case may be, would be deemed to be an affiliate of
Star under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder), owns, directly or indirectly, a thirty percent (30%) or
greater equity interest.

            Star Cure(TM) Burley Tobacco means Burley tobacco which has been
cured pursuant to the Star Cure(TM) Process.

            Star Cure(TM) Burley Tobacco Acceptance Notice means a written
notice from B&W to Star the effect of which is to exercise B&W's option to
purchase 3,000,000 pounds Green Weights of Star Cure(TM) Burley Tobacco in each
of 2000 and 2001.

            Star Cure(TM) F.C. Tobacco means Virginia flue-cured tobacco which
has been cured pursuant to the Star Cure(TM) Process.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        3

<PAGE>   4

            Star Cure(TM) Inside means the trademark of Star which serves as a
designator that the Tobacco Product in the package includes Star Cure(TM)
Tobacco.

            Star Cure(TM) Marks means the trademark Star Cure(TM) and the Star
Cure(TM) Inside designator associated with the Low TSNA Cigarette.

            Star Cure(TM) Process means the proprietary Trade Secrets and
technology for a method or process of curing tobacco which significantly retards
the production of nitrosamines in the curing process.

            Star Cure(TM) Tobacco means Star Cure(TM) F.C. Tobacco and/or Star
Cure(TM) Burley Tobacco as the context may require.

            Star New Technologies means any technologies developed by Star or
Star Affiliates relating to Tobacco Products other than the Star Cure(TM)
Process.

            Star New Technologies Products means Tobacco Products of Star or
Star Affiliates which contain tobacco manufactured or produced using Star New
Technologies.

            Star's Intellectual Property means, with respect to Star and its
subsidiaries, the proprietary technologies, and all enhancements and
improvements thereto, whether owned by, or licensed to, Star, including its
subsidiaries, its registered trademarks, registered copyrights, and all pending
applications therefor, whether or not issued that relate to the Star Cure(TM)
Process and Star Cure(TM) Marks and Star's Trade Secrets.

            Star's Scientific Advisory Board means a panel of expert medical,
scientific and public health policy members who will provide scientific advice
to Star on the development of Low TSNA Cigarettes and Other Tobacco Products and
advise Star on the design and interpretation of clinical studies using Star
Cure(TM) Tobacco and the validity of any Claims which Star proposes to make, as
well as other relevant scientific advice and counsel concerning a broad range of
biomedical and/or health related issues for the Star Cure Tobacco.

            Star's Tobacco Requirements means [***]

            Statement means with respect to cigarettes or Other Tobacco Products
containing Star Cure(TM) Tobacco that such product is understood to contain Star
Cure(TM) Tobacco, carries the Star Cure(TM) mark and/or the Star Cure(TM) Inside
designator, or is designated as having low or lower TSNA levels than a
comparable Tobacco Product which does not contain any Star Cure(TM) Tobacco.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        4

<PAGE>   5

            [***]

            [***]

            [***]

            Tobacco Products means cigarettes and Other Tobacco Products.

            Trade Marketing Support means that level of in-market field sales
support normally used by B&W for test marketing its own brands.

            Trade Secrets means, with respect to Star or B&W, information,
including a formula, pattern, compilation, program, device, method, technique or
process, that: (i) derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use, and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.

            TSNA means the tobacco specific nitrosamines - N-nitrosonomicotine
(NNN), 4-(methyl nitrosamine) - (3 Pyridyl) - 1 - butanone (NNK),
N-nitrosoanabasine (NAT) and N-nitrosoanabasine (NAB).

                                    SECTION 2
                     DEVELOPMENT OF LOW TSNA CIGARETTE AND
                   OTHER TOBACCO PRODUCTS; TRADEMARK LICENSES

            2.01        Star's Scientific Advisory Board.

            Star intends to establish a Scientific Advisory Board utilizing the
scientists and/or healthcare professionals identified to B&W in writing, or
other individuals with comparable credentials, expertise and stature in their
respective fields. The resulting Star Scientific Advisory Board will be in place
by December 31, 1999. All issues related to the Scientific Advisory Board are
within the sole domain of Star and its designees.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        5

<PAGE>   6

            2.02        Regulatory Acceptance.

            Star will continue to develop the Star Cure(TM) Process and will
seek any necessary or available regulatory acceptance and recognition of the
process. During the term of this Agreement, Star will, from time to time, advise
B&W of the status of these ongoing efforts as well as its analysis of potential,
possible and/or actual Claims and Statements which may be made with respect to
Tobacco Products manufactured with Star Cure(TM) Tobacco.

            [***]

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        6

<PAGE>   7

            [***]

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        7

<PAGE>   8

[***]

            2.09        Other Tobacco Products.

            In the event that Star and/or B&W develop Other Tobacco Products
using Star Cure(TM) Tobacco, Star at its expense will conduct the Biological
Testing for such product. The Parties may enter into supplemental agreements
with respect to biological and market testing and the acquisition of any
necessary trademark licenses on terms comparable to those set forth herein with
respect to such Other Tobacco Products.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        8

<PAGE>   9

            2.10        Restrictions on Claims.

            Neither Star nor B&W will make any health or health related Claim,
directly or indirectly, with respect to the effect of using Star Cure(TM)
Tobacco in any Tobacco Product unless such Claim has been approved by Star's
Scientific Advisory Board.

                                    SECTION 3
                       PURCHASE OF STAR CURE(TM) TOBACCO

            3.01        Purchase of Star Cure(TM) Tobacco.

            Subject to the terms and provisions of this Agreement, in addition
to amounts of tobacco purchased under the 1999 Purchase Orders, Star agrees to
sell to B&W and B&W agrees to purchase from Star five million pounds/year of
Star Cure F.C. Tobacco for delivery in each of the years 2000 and 2001.

            [***] upon issuance of such notice, Star agrees to sell to B&W and
B&W agrees to purchase from Star three million pounds/year of Star Cure(TM)
Burley Tobacco for delivery to B&W in each of 2000 and 2001.

            In the event B&W [***], B&W shall purchase from Star and Star shall
sell to B&W at least five million pounds/year, Green Weight, of Star Cure F.C.
Tobacco in each of the years 2002, 2003 and 2004. In the event B&W issues the
Star Cure(TM) Burley Tobacco Acceptance Notice then B&W shall purchase from Star
and Star shall sell to B&W at least three million pounds/year, Green Weight, of
Star CureO Burley Tobacco in each of the years 2002, 2003 and 2004.

            3.02        Condition of Tobacco.

            All Star Cure (TM) Tobacco delivered by, or on behalf of, Star to
B&W Affiliates pursuant to this Agreement shall be in marketable condition and
good keeping order and of comparable smoking quality or better than the tobacco
delivered by Star to B&W pursuant to the 1999 Purchase Order. Comparable smoking
quality will be determined by a commonly accepted sensory blind comparison test
between the Star Cure(TM) Tobacco delivered to B&W Affiliates pursuant to this
Agreement and conventional Burley or flue-cured tobacco from conventional fields
during the same growing season.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                        9

<PAGE>   10

            3.03        Prices.

            The purchase price for Star Cure(TM) Tobacco purchased for delivery
in the years 2000 and 2001 shall be [***]. The purchase price for Star Cure(TM)
Tobacco delivered in the year 2002 and thereafter shall be the [***]. With
respect to Star Cure (TM) Tobacco delivered in the calendar year 2003 and
thereafter, [***] Star will review with B&W the components of such incremental
costs and permit B&W to audit such costs periodically. Star will make good faith
efforts to incorporate any reasonable recommendations made by B&W to keep the
Burley Incremental Cost Factor as low as possible. Identification of the goods
to the contract shall occur when they are placed in the hands of the carrier.
The prices are F.O.B. Star's processing facility or such other facility as Star
may determine. Payments shall be made to Star, at Star's option, by check or
wire transfer. Payments shall be due within [***] of receipt of the invoice.
Notwithstanding the foregoing, a different method of payment or credit
arrangement may be agreed to in writing by the Parties in which case such other
method of payment or credit arrangement will govern until Star gives B&W [***]
written notice that it will require payment as noted above. Commencing with Star
Cure (TM) Tobacco delivered to B&W Affiliates in the year 2002 and for all such
shipments thereafter, B&W shall pay based on a Purchase Price calculated using
the Market Price established for the previous selling season. Within [***] of
the end of each selling season, the Purchase Price of all tobacco purchased that
season shall be recomputed using the Market Price for that season, and the
Parties shall adjust the payments made accordingly within [***].

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                       10

<PAGE>   11

            3.04        Option to Purchase Star (TM) Cure Tobacco.

            Commencing with respect to Star Cure (TM) Tobacco to be delivered in
the calendar year 2000 and during each calendar year thereafter during the term
of this Agreement, subject only to the fulfillment of Star's Tobacco
Requirements, [***]

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                       11

<PAGE>   12

[***]

            Except for amounts required to meet Star's Tobacco Requirements in
the event that B&W Affiliates purchase 30,000,000 pounds/year or more of Star
Cure(TM) Tobacco in each of the years 2002, 2003 and 2004, Star agrees not to
sell Star Cure(TM) Tobacco to any Persons other than B&W Affiliates and sales
which are made pursuant to Star's Tobacco Requirements during that year.

            All orders, including those exercising the option to purchase Star
Cure (TM) Tobacco, shall be submitted to Star in the form of a written purchase
order which shall be sent by mail or by facsimile to Star at Star's principal
place of business and shall set forth (i) the identity of Star Cure Tobacco
being purchased; (ii) the quantity (in pounds) to be purchased; (iii) the
purchase price in accordance with Section 3.03; (iv) the general shipping
instructions including destination address; (v) a reference to this Agreement;
(vi) any other special information required by this Agreement or by the
circumstances of the purchase order.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                       12

<PAGE>   13

            3.05        Incorporation of Terms and Conditions.

            The terms and conditions of this Agreement shall be deemed
incorporated into and made a part of each purchase order, and shall not be
modified, supplemented, or superseded by any terms or conditions in a purchase
order except as expressly agreed to in a writing separate from such purchase
order signed by authorized representatives of both Parties and specifying the
extent to which such purchase order overrides the terms and conditions of this
Agreement.

            3.06        Additional Payments to Star.

            Subject to the terms and conditions hereof, and in consideration of
the undertakings herein by Star, in addition to the payments made pursuant to
Sections 3.03 and 3.09, B&W shall pay to Star a nonrefundable deposit on the
Purchase Price of Star Cure(TM) Tobacco to be purchased in the year 2000 in the
amount of $6,000,000, payable upon execution of this Agreement.

            3.07        Late Fees on Delinquent Payments.

            In the event B&W or any B&W Affiliate does not pay any amounts due
Star pursuant to this Agreement, B&W shall pay late charges on such past due
amounts at a monthly rate of one and one-half percent (1 1/2%) (or, if less, the
maximum interest rate then allowed under applicable law).

            3.08        Most Favored Purchaser.

            [***]

            3.09        Covenant re Star's Intellectual Property.

            In the event Star receives a communication from any Person which
asserts that Star's Intellectual Property, whether owned by or licensed to Star,
is infringing the rights of any Person, Star shall give B&W written notice of
such communication within ten (10) Business Days of its receipt.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                       13

<PAGE>   14

                                    SECTION 4
            FINANCIAL AND OTHER ASSISTANCE PROVIDED BY B&W TO STAR.

            4.01        Financing of Barns.

            To assist Star in the acquisition of Barns for the curing of Star
Cure(TM) Tobacco, B&W will make available to Star a credit facility pursuant to
the Credit Facility. [***]

            4.02        Trademark Registrations.

            [***]

                                    SECTION 5
                     REPRESENTATIONS AND WARRANTIES OF STAR

            Star represents and warrants to B&W:

            5.01        Corporate Status.

            Star is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Delaware. Star is duly qualified to do
business and is in good standing in such states in which the failure to so
qualify would have a material adverse effect on its business. Star has requisite
power to carry on its business as it is now being conducted and Star has the
requisite power to enter into and complete the transactions contemplated by this
Agreement.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                       14

<PAGE>   15

            5.02        Authority.

            All corporate actions necessary to be taken by or on the part of
Star in connection with the transactions contemplated by this Agreement have
been duly and validly taken, and this Agreement has been duly and validly
authorized, executed, and delivered by Star and constitutes the legal, valid and
binding obligation of Star, enforceable against Star in accordance with its
terms.

            5.03        Star's Intellectual Property.

            Star is, and to the best of its knowledge, will be, for the term of
this Agreement, either the sole owner or the sole and exclusive worldwide
licensee of all technology and Know-How necessary and utilized in the production
of Star Cure (TM) Tobacco. To the best of Star's knowledge and information, the
use of Star Cure Tobacco by any B&W Affiliate will not infringe any patent or
trade secret or other protected interest of any Person. Star has not received
any communications or notice of any claims or demands of any Person pertaining
to Star's Intellectual Property, or the rights of Star thereunder. To the
knowledge and information of Star, no proceedings have been instituted, or are
pending or, threatened, which challenge the rights of Star with respect to
"Star's Intellectual Property" and none of such intellectual property is subject
to any outstanding order, decree, judgment, stipulation, injunction restriction
or agreement affecting the scope of the free and unrestricted use by Star or the
benefits obtained by the B&W Affiliates under the Related Agreements. To the
best of Star's knowledge and information, Star is not infringing or violating,
and has not infringed or violated any intellectual property rights of others.

                                    SECTION 6
                     REPRESENTATIONS AND WARRANTIES OF B&W

            B&W represents and warrants to Star:

            6.01        Corporate Status.

            B&W is a corporation which is duly organized, validly existing and
in good standing under the laws of the State of Delaware. B&W is qualified to do
business and in good standing in such states in which the failure to so qualify
would have a material adverse effect on B&W's ability to perform its obligations
herein. B&W has the requisite power to enter into and complete the transactions
contemplated by this Agreement.

            6.02        Authority.

            All corporate actions necessary to be taken by or on the part of B&W
in connection with the transactions contemplated by this Agreement have been
duly and validly taken, and this Agreement has been duly and validly authorized,
executed and delivered by B&W and constitutes the legal, valid and binding
obligation of B&W, enforceable against B&W in accordance with and subject to its
terms.

                                       15

<PAGE>   16

                                    SECTION 7
                            NEW TOBACCO TECHNOLOGIES

            [***]

                                    SECTION 8
                      WARRANTY AND LIMITATION OF LIABILITY

            8.01        Warranty.

            All Star Cure(TM) Tobacco shall have (subject to verification by
B&W) total TSNA levels equal to or less than:

                        Star Cure(TM) F.C. Tobacco:  0.4 ppm.

                        Star Cure(TM) Burley Tobacco:  1 ppm.

            B&W's sole remedy for any breach of this warranty is replacement of
any Star Cure(TM) Tobacco at Star's expense which fails to meet such
specifications. The B&W Affiliate will give written notice to Star of its intent
to return such tobacco and provide Star with a copy of its TSNA test results or
other reports and analysis with respect to any returned tobacco.

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                       16

<PAGE>   17

            8.02        Limitation of Liability.

            EXCEPT AS EXPRESSLY PROVIDED IN THE PREVIOUS SECTION, STAR MAKES NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND TO B&W OR ITS CUSTOMERS, INCLUDING BUT
NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. FURTHERMORE, UNDER NO CIRCUMSTANCES SHALL STAR OR B&W BE
RESPONSIBLE FOR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR
EXEMPLARY DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
ACTS OR OMISSIONS ASSOCIATED THEREWITH OR RELATING TO THE USE OF THE STAR
CURE(TM) TOBACCO FURNISHED, WHETHER SUCH CLAIM IS BASED ON BREACH OF WARRANTY,
CONTRACT, TORT, OR OTHER DAMAGES OR WHETHER ANY OTHER REMEDY PROVIDED HEREIN
FAILS.

                                    SECTION 9
                                 MISCELLANEOUS

            9.01        Public Announcements.

            No Party shall, without the approval of the other Party hereto, make
any press release or other public announcement concerning the transactions
contemplated by this Agreement, except: (i) to announce it has been entered
into, in which case such Party shall give advance notice to the other Party and
the Parties shall use their best efforts to cause a mutually agreeable release
or announcement to be issued; (ii) as and to the extent that such Party shall be
so obligated by law; and (iii) to meet the requirements for appropriate
regulatory filings.

            9.02        Confidentiality.

                        (a)         Except to the extent otherwise permitted
under Section 10.01, each Party will hold in confidence and will not, without
the prior written consent of the other party, use, reproduce, distribute,
transmit, transfer or disclose, directly or indirectly, in any form or by any
means or for any purpose any Confidential Information of the other party except
as explicitly provided for in this Agreement. As used herein, the term
"Confidential Information" shall mean this Agreement and its subject matter, and
proprietary information that is provided to or obtained from one party to the
other party including without limitation Trade Secrets, B&W Technologies,
results of Biological Testing and Market Tests, information regarding the
development, manufacturing, marketing, promotion and sale of Tobacco Products
and any other information which derives economic value, actual or potential,
from not being generally known to, and not generally ascertainable by proper
means by, other persons. The recipient of Confidential Information may only
disclose such information to its employees on a need-to-know

                                       17

<PAGE>   18

basis and will exercise reasonable commercial care in protecting the
confidentiality of the other party's Confidential Information.

                        (b)         The obligations of a recipient party with
respect to Confidential Information shall remain in effect during and after the
term of this Agreement (including any renewals and extensions hereof) and for a
period of 5 years thereafter except to the extent:

                                    1.          such Confidential Information is
or becomes generally available to the public other than as a result of a
disclosure by the recipient, or its directors, officers, employees, agents or
advisors;

                                    2.          such Confidential Information
becomes available to the recipient on a non-confidential basis from a source
other than the disclosing party or its affiliated companies (provided that such
source is not bound by any confidentiality obligations to the disclosing party
or its affiliated companies); or

                                    3.          the disclosure of such
Confidential Information is necessary to comply with applicable law or the order
or other legal process of any court, governmental or similar authority having
jurisdiction over the recipient.

                        (c)         In the event the recipient becomes legally
compelled to disclose any of such Confidential Information by any governmental
body or court, recipient will provide the disclosing party with prompt notice so
that the disclosing party may seek a protective order or other appropriate
remedy. Recipient will furnish only that portion of such Confidential
Information which is legally required and will exercise its reasonable business
efforts to obtain appropriate assurance that confidential treatment will be
accorded such Confidential Information.

                                   SECTION 10
                              TERM AND TERMINATION

            10.01       Term.

            [***]

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                       18

<PAGE>   19

            10.02       Events of Default.

            Either party (the "nonbreaching party") shall have the right to
terminate this Agreement upon thirty (30) days' prior written notice to the
other party (the "breaching party") or (if applicable) its trustees, receivers
or assigns upon the occurrence of one or more of the following events by the
breaching party:

                        (a)         as to Star, a material cessation or stoppage
                                    by Star to deliver to any B&W Affiliate the
                                    quantity of StarCure(TM) Tobacco which such
                                    B&W Affiliate has agreed to purchase for
                                    such year, and as to B&W, the breach of any
                                    material provision of this Agreement unless
                                    the breaching party cures or corrects such
                                    breach within thirty (30) days after the
                                    written notice by the nonbreaching party;

                        (b)         the institution of any proceeding against
                                    the breaching party under any bankruptcy,
                                    insolvency or moratorium law, to which the
                                    breaching party consents or which is not
                                    dismissed within sixty (60) days thereafter;

                        (c)         any assignment by the breaching party of
                                    substantially all of its assets for the
                                    benefit of creditors; or

                        (d)         the placement of the assets of the breaching
                                    party in the hands of a trustee or receiver,
                                    unless the receivership or trust is
                                    dissolved within sixty  (60) days
                                    thereafter.

                                   SECTION 11
                               GENERAL PROVISIONS

            11.01       Successors and Assigns.

            Except as otherwise expressly provided herein, this Agreement shall
be binding upon and inure to the benefit of the Parties hereto, and their
respective representatives, successors and assigns. Neither Party may assign any
of its rights or delegate any of its duties hereunder without the prior written
consent of the other, and any such attempted assignment or delegation without
such consent shall be void; provided, however, that B&W may assign its rights
and obligations hereunder, in whole or in part, to one or more of the B&W
Affiliates without Star's consent.

            11.02       Amendments; Waivers.

            The terms, covenants, representations, warranties and conditions of
this Agreement may be changed, amended, modified, waived, or terminated only by
a written instrument executed by the Party waiving compliance. The failure of
any Party at any time or times to require performance of any provision of this
Agreement shall in no

                                       19

<PAGE>   20

manner affect the right of such Party at a later date to enforce the same. No
waiver by any Party of any condition or the breach of any provision, term,
covenant, representation or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or of the
breach of any other provision, term, covenant, representation or warranty of
this Agreement.

            11.03       Notices.

            All notices, requests, demand and other communications required or
permitted under this Agreement shall be in writing (which shall include notice
by telex or facsimile transmission) and shall be deemed to have been duly made
and received when personally served, or when delivered by Federal Express,
United Parcel Service or a similar nationally recognized overnight courier
service, expenses prepaid, or, if sent by telex, graphic scanning or other
facsimile communications equipment, delivered by such equipment, addressed as
set forth below:

            (a)  if to Star, then to:    Star Scientific, Inc.
                                         16 South Market Street
                                         Petersburg, VA
                                         Attention: Jonnie R. Williams
                                         Telecopier No. 804-861-6215

with a copy (which shall
not constitute notice) to:               Paul, Hastings, Janofsky & Walker

                                         1299 Pennsylvania Avenue, N.W.
                                         Tenth Floor
                                         Washington, D.C.  20004-2400
                                         Attention:  Paul L. Perito,
                                         Esq.Telecopier No.: (202) 508-9700  and

                                         Paul, Hastings, Janofsky & Walker
                                         600 Peachtree Street, Suite 2400
                                         Atlanta, Georgia  30308
                                         Attention:  W. Andrew Scott,
                                         Esq.Telecopier No. (404) 815-2424

(b)  if to B&W, then to:                 Brown & Williamson Tobacco Corporation

                                         200 Brown & Williamson Tower
                                         401 South 4th Avenue
                                         Louisville, KY  40232
                                         Attention:  [***]
                                         Telecopier No. (502) 568-7107

Note: Redacted portions have been marked with [***]. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.

                                       20

<PAGE>   21

with a copy (which shall not
constitute notice) to:                   Wiley, Rein & Fielding

                                         1776 K Street, N.W.

                                         Washington, D.C.  20006

                                         Attention:  Andrew S. Krulwich
                                         Telecopier No. (202)-719-7049

and

                                         Wiley, Rein & Fielding

                                         1776 K Street, N.W.

                                         Washington, D.C.  20006

                                         Attention:  Stuart F. Carwile
                                         Telecopier No. (202)-719-0140

            Any Party may alter the address to which communications are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section providing for the giving of notice.

            11.04       Captions.

            The captions of Articles and Sections of this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any of the provisions of this Agreement.

            11.05       Governing Law.

            This Agreement shall be deemed to executed and to be performed in
the State of Georgia (without regard to its conflicts of laws principles) and
shall be construed in accordance with the laws of the State of Georgia.

                                       21

<PAGE>   22

            11.06       Entire Agreement.

            This Agreement constitutes the full and entire understanding and
agreement between the Parties with regard to the subject matter hereof, and
supersedes all prior agreements, understandings, inducements or conditions,
express or implied, oral or written, relating to the subject matter hereof;
including without limitation the undated letter of intent, the Memorandum of
Understanding between Star Scientific, Inc. and Brown and Williamson Tobacco
Corp. The express terms hereof control and supersede any course of performance
and/or usage of trade inconsistent with any of the terms hereof. This Agreement
has been prepared by all of the Parties hereto, and no inference of ambiguity
against the drafter of a document therefore applies against any Party hereto.

            11.07       Counterparts.

            This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original as against any Party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
Parties reflected hereon as the signatories.

            11.08       Severability.

            The Parties agree that if one or more provisions contained in this
Agreement shall be deemed or held to be invalid, illegal or unenforceable in any
respect under any applicable law, this Agreement shall be construed with the
invalid, illegal or unenforceable provision deleted, and the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected or impaired thereby.

            11.09       No Joint Venture.

            Nothing contained in this Agreement shall be construed as creating a
joint venture, partnership, agent or employment relationship between Star and
any of the B&W Affiliates.

            11.10       Force Majeure. Neither party shall be liable for any
delay or failure in its performance of any of the acts required by this
Agreement when such delay or failure arises from circumstances beyond the
control and without the fault or negligence of such party. Such causes may
include, without limitation, acts of God, acts of local, state or national
governments or public agencies, acts of public enemies, acts of civil or
military authority, labor disputes, material or component shortages, embargoes,
rationing, quarantines, blockades, sabotage, utility or communication failures
or delays, earthquakes, fire, flood, epidemics, riots or strikes. The time for
performance of any act delayed by any such event may be postponed for a period
equal to the period of such delay so long as the party whose actions are delayed
is diligently seeking to perform.

                                       22

<PAGE>   23

            IN WITNESS WHEREOF each of the Parties has caused this Agreement to
be executed on its behalf by a duly authorized officer.

                                             STAR SCIENTIFIC, INC.

                                             By:
                                                --------------------------
                                             Name:
                                                  ------------------------
                                             Title:
                                                   -----------------------

                                                  BROWN & WILLIAMSON
                                             TOBACCO CORPORATION

                                             By:
                                                --------------------------
                                             Name:
                                                  ------------------------
                                             Title:
                                                   -----------------------

                                       23

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