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                                                                   Exhibit 10.49

     Master Lease Agreement No.: 196-0181

MASTER LEASE AGREEMENT

THIS MASTER LEASE AGREEMENT (this "Lease") is between HELLER FINANCIAL LEASING,
INC., a Delaware corporation ("Lessor"), with an office address at 500 West
Monroe Street, Chicago, IL 60661 and STAR SCIENTIFIC, INC., a Delaware
corporation with its address and principal place of business at 801 Liberty Way,
Chester, Virginia 23836 and STAR TOBACCO & PHARMACEUTICALS, INC., a Virginia
corporation with its address and principal place of business at 801 Liberty Way,
Chester, Virginia 23836 (individually and collectively, "Lessee") which parties
hereby agree as follows:

1. LEASING OF EQUIPMENT: Subject to the terms and conditions set forth below,
Lessor agrees to lease to Lessee and Lessee agrees to hire from Lessor the
equipment (the "Equipment"; a unit or part thereof being sometimes hereinafter
referred to as an "item") described in any Master Lease Schedule hereto, now or
hereafter executed by the parties (each, a "Schedule"). Nothing contained herein
shall obligate either party to execute any Schedule subsequent to the date
hereof. The Equipment shall be delivered and installed at the location specified
or referred to in the applicable Schedule. The Equipment shall be deemed to have
been accepted by Lessee for all purposes under this Lease as of the Acceptance
Date (defined below) shown on the executed Delivery and Acceptance Certificate
(an "Acceptance Certificate") with respect to such Equipment. Any modifications
to this Lease contained in any Schedule shall be controlling, but only with
respect to the Equipment described in such Schedule. Until and unless a Schedule
is sold, assigned or otherwise transferred by Lessor, or Lessor and Lessee
expressly agree otherwise in writing, this Lease, all Riders hereto or to any
Schedule, now or hereafter executed by the parties (each, a "Rider"), and all
Schedules shall constitute one lease, and references to this Lease shall include
all such Riders and Schedules. In the event that a Schedule is sold, assigned or
otherwise transferred by Lessor, such Schedule and all Riders thereto shall be
deemed to be a separate lease, which shall include and incorporate each term and
condition in this Lease and all Riders hereto. As used herein, "Equipment Cost"
shall have the same meaning and value as set forth in each applicable Schedule.

2. TERM, RENT AND PAYMENT: (a) The term of this Lease for each respective Item
(the "Term") shall commence on the date set forth in the Acceptance Certificate
therefor (the "Acceptance Date") and, unless sooner terminated pursuant to
Section 9 or 17, shall

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continue for the period specified as the "Term" in the applicable Schedule. If
any Term shall be extended or this Lease is renewed pursuant to an extension or
renewal option, the word "Term" shall include all such extensions and renewals,
and all provisions of this Lease shall apply during all extension and renewal
periods, except as may be specifically provided otherwise in any Rider, Schedule
or other written agreement applicable thereto.

(b) Lessee agrees to pay to Lessor's order basic rent for each Item in the
amount therefor set forth in the applicable Schedule ("Basic Rent"), plus a per
diem, pro-rata portion of the periodic Basic Rent for any Interim period
("Interim Rent") from the Acceptance Date through the day immediately preceding
the "Commencement Date" set forth in the applicable Schedule. (Unless otherwise
stated in the applicable Schedule, the "Commencement Date" shall be the first
day of the first calendar month immediately following the Acceptance Date.)
Interim Rent for Items covered by a particular Schedule shall be due on the
Commencement Date. The first Basic Rent payment for Items covered by a
particular Schedule shall be due on the day of the period specified in such
Schedule. Subsequent Basic Rent payments for the Items described in the
applicable Schedule shall be due on the same day of each applicable period
thereafter. Any payment due on a day which is not a business day shall be made
on the following business day.

(c) Basic Rent, Interim Rent and all other amounts payable to Lessor under any
provision of this Lease (collectively, "Rent") shall, unless Lessor otherwise
directs, be paid to Lessor at its office address set forth above and shall be
deemed received when good funds are received by Lessor. Lessee agrees to pay
Lessor on demand an administrative and late charge on all Rent not paid within
10 business days of the date due hereunder equal to the lesser of: (i) 5% of the
amount not timely paid or (ii) the maximum rate permitted by applicable law.

3. DISCLAIMER: LESSOR IS NEITHER THE MANUFACTURER NOR SELLER OF THE EQUIPMENT,
AND MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH
RESPECT TO THE EQUIPMENT, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED. LESSEE
UNDERSTANDS AND AGREES THAT NO WARRANTY IS TO BE IMPLIED WITH RESPECT TO THE
CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY, THE FITNESS

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OF THE EQUIPMENT FOR A PARTICULAR PURPOSE, THE ACCURACY OF THE DESCRIPTION OF
THE EQUIPMENT, OR WITH RESPECT TO INFRINGEMENT, INTERFERENCE OR THE LIKE. LESSOR
SHALL NOT BE LIABLE IF, FOR WHATEVER REASON, THE EQUIPMENT IS DELAYED OR NOT
DELIVERED TO LESSEE.

4. QUIET ENJOYMENT: So long as no Event of Default (as defined below) exists,
Lessor will not interfere with Lessee's quiet enjoyment and use of the Equipment
during the Term therefor.

5. NET LEASE; NO SET-OFF: This Lease is a net lease and Lessee shall not be
entitled to any abatement or reduction of, or set-off against, any Rent by
reason of any (i) past, present or future claim against Lessor or any successor
or assignee of Lessor or any supplier of any Item or any other person, (ii)
defect in or damage to, or loss, prohibition, restriction on use, damage or
destruction of, any Item (except as expressly provided otherwise in Section 9)
from whatever cause, or (iii) other cause whatsoever, whether similar or
dissimilar to the foregoing, it being the intention of the parties that all Rent
shall continue to be payable in all events in the manner and at the times
specified in this Lease and that Lessee's obligation to pay Rent shall be
absolute and unconditional unless the obligation to pay the same shall be
terminated pursuant to the express provisions of this Lease.

6. USE, LOCATION AND POSSESSION; LIENS: (a) Lessee shall use each Item in a
careful and proper manner and for the use contemplated by the manufacturer
thereof and in compliance with all applicable laws, rules, and regulations and
the provisions of the insurance required to be maintained hereunder and the
terms of any manufacturer's warranty. Each Item shall at all times be kept at
the location specified in the applicable Schedule unless Lessor has given prior
written consent to a change in location. Lessee shall at all times keep each
Item in its possession and control.

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(b) Lessee shall keep each Item free and clear of all claims, liens, pledges,
rights of others or other encumbrances, and shall not create, incur, assume or
suffer to exist any thereof in, on, of, or to any Item (collectively "Liens"),
other than those arising by, through or under Lessor ("Lessor Liens").

(c) Lessor shall have the right as owner, but not the obligation, at all
reasonable times to enter upon the premises where the Equipment is located or
used to inspect the Equipment and Lessee's records relating thereto. Such
inspection shall be for, among other things, determining whether Lessee is
properly complying with its obligations hereunder. Neither Lessee nor any third
party may rely upon any such inspections by Lessor and Lessor shall not be
obligated to inform Lessee or any third party of the result of any such
inspection. Any inspection that is not followed by a notice of an Event of
Default shall not constitute a waiver of any Event of Default then existing and
Lessor's failure to inspect the Equipment or to discover any information
regarding the Equipment shall not constitute a waiver of any of Lessor's rights
hereunder.

7. MAINTENANCE AND SERVICE; IMPROVEMENTS: (a) Lessee shall, at its expense, at
all times maintain, service and repair each Item as would a prudent owner of
such Item, and in any event so as to keep each Item in good operating condition,
ordinary wear and tear excepted, in compliance with all applicable laws, rules,
regulations, and manufacturer's recommended basic warranty, extended warranty
and/or maintenance program requirements, and as otherwise may be required to
enforce warranty claims against each vendor and manufacturer of each Item. To
the extent that Lessee's maintenance, repair or servicing standards exceed the
foregoing, then Lessee shall keep each Item in at least as good condition as
other comparable equipment owned or used by Lessee. In addition, Lessee shall,
at its expense, comply with all maintenance requirements set forth by Lessor in
any applicable Rider now or hereafter executed by the parties. Lessee shall, if
at any time requested to do so by Lessor, affix in a prominent position on each
Item plates, tags or other identifying labels showing ownership thereof by
Lessor.

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(b) Any alterations or modifications with respect to any Item that may be
required at any time during the Term therefor to comply with any applicable law
or any governmental or other rule or regulation shall be made by Lessee, at its
expense, and shall thereupon become the property of Lessor.

(c) Unless required pursuant to Subsection (b), Lessee shall not, without
Lessor's prior consent, affix or install any accessory, equipment, or device on,
or modify, any Item if such addition or modification will impair the original
function or use thereof or cannot be readily removed without causing damage to
such Item. Further, Lessee shall not, without Lessor's prior written consent,
affix or install any Item to or in any other personal property, or to or in any
real property so that such Item shall constitute a fixture. Upon Lessor's
request, Lessee shall obtain and deliver to Lessor disclaimers or waivers from
all owners and/or mortgagees of real estate in which any Item is located in form
and content acceptable to Lessor.

8. NO AGENCY: Lessee acknowledges that it alone has selected the Equipment and
the supplier(s) thereof; that it has reviewed and approved each written supply
contract and purchase order covering the Equipment, or has been advised by
Lessor in writing of the identity of each supplier, that it may have rights
under each such supply contract and purchase order, and that it may contact each
supplier for a description of any such rights and/or supplier's warranty.
Nothing herein contained shall be construed to deprive Lessee of whatever rights
Lessee may have against parties other than Lessor or Lessor's assignee, such as
the supplier or manufacturer of any Item, and Lessee agrees to look solely to
such third parties with respect to any and all claims concerning the Equipment.
So long as no Event of Default exists, Lessee may pursue such claims for the
mutual benefit of Lessor and Lessee in accordance with their interests in the
Equipment. Without in any way limiting any other provision in this Lease, Lessor
shall not in any event be liable for any consequential damages hereunder or with
respect to any Item. No supplier is the agent of Lessor and no employee of any
supplier is authorized to waive, supplement or otherwise alter any provision of
this Lease. Lessee and Lessor hereby agree that they intend this Lease to be a
"Finance Lease" as defined by Article 2A of the

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Uniform Commercial Code (the "UCC"). Lessee acknowledges that Lessee has
reviewed and approved any written "Supply Contract" covering the Equipment from
any "Supplier" (as those terms are defined in Article 2A of the UCC).

9. RISK OF DAMAGE AND LOSS: Lessee assumes and shall be solely responsible for
the entire risk of any Item being lost, destroyed, damaged, stolen, confiscated
or condemned, from whatever source, until the date such Item is returned and
accepted by Lessor (the "Return Date") in accordance with Section 12. In the
event of any damage to any Item, Lessee, at its expense, shall promptly repair
the same, restoring it to the condition required to be maintained hereunder. If
any Item is lost, destroyed, stolen, damaged in such a way that it is not
commercially reasonable to repair it (or such repairs are not completed within
60 days of the damage or by the end of the Term with respect thereto, whichever
is shorter), confiscated or condemned (each, an "Event of Loss"), then Lessee
shall pay to Lessor the Stipulated Loss Value (as defined below) of such Item
and all other Rent owing with respect to such Item, which such payment shall be
due on the first to occur of (i) the end of the Term with respect thereto or
(ii) the sooner of (A) 60 days after such Event of Loss or (B) the second Basic
Rent payment date with respect to such Item following such Event of Loss. Lessor
and Lessee shall execute a Stipulated Loss Value Rider applicable to each Item
and the Stipulated Loss Value for each Item shall be as set forth therein (the
"Stipulated Loss Value").

Upon due payment by Lessee of all such amounts, this Lease shall terminate with
respect to such Item and Lessor shall transfer title thereto to Lessee, without
representation or warranty other than as to Lessor Liens. So long as no Event of
Default exists, any proceeds of insurance required hereunder received by Lessor
with respect to any damage or Event of Loss respecting any Equipment shall be
paid to Lessee to the extent necessary to reimburse Lessee for costs incurred
and paid by Lessee in repairing the same or shall be credited against amounts
payable by Lessee with respect to the Equipment involved.

10. INSURANCE: Lessee shall, at its expense, at all times through the Return
Date (i) keep the Equipment insured against all risks of loss or damage from
every cause

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whatsoever in an amount not less than the greater of fair market value or the
Stipulated Loss Value thereof, and (ii) obtain liability insurance, including
automobile coverage if the Equipment includes motor vehicles, respecting the
Equipment covering liability for bodily injury, including death and property
damage, in an amount of at least $5 million per occurrence or such greater
amount as may comply with general industry standards, or such greater amount as
Lessee may maintain, or in such other amounts as Lessor may from time to time
require.

Lessor shall be named loss-payee with respect to damage or loss to the Equipment
with no provision for co-insurance and shall be named as an additional insured
on the liability insurance. All insurance shall be with insurers and in form
satisfactory to Lessor; have a deductible not to exceed $50,000 per occurrence,
or such other amount as Lessor may from time to time require; shall provide for
at least 30 days' prior written notice to Lessor before any cancellation or
material modification thereof; shall waive any claim for premium against Lessor;
and shall provide that Lessor will be insured regardless of any breach by Lessee
of any representation, warranty or covenant in any such policy or any
application therefor. Lessee shall deliver to Lessor certificates of insurance
and other evidence satisfactory to Lessor evidencing the insurance required
hereby, and at Lessor's request Lessee will furnish copies of such policies to
Lessor. In the case of renewals, evidence of renewal shall be delivered to
Lessor at least 5 days prior to expiration of the current policy.

In the event Lessee fails to provide Lessor with evidence of the insurance
coverage required by this Lease, Lessor may purchase insurance at Lessee's
expense to protect Lessor's interests in the Equipment. This insurance may, but
need not, protect Lessee's interests. The coverage purchased by Lessor may not
pay any claim made by Lessee or any claim that is made against Lessee in
connection with the Equipment. Lessee may later cancel any insurance purchased
by Lessor, but only after providing Lessor with evidence that Lessee has
obtained insurance as required by this Lease. If Lessor purchases insurance for
the Equipment, Lessee will be responsible for the costs of that insurance,
including interest and other charges imposed by Lessor in connection with the

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placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the
Rent. The costs of the insurance may be more than the cost of insurance Lessee
is able to obtain on its own.

11. ACCEPTANCE: By its execution of any Acceptance Certificate, Lessee warrants
and agrees that the Equipment covered thereby conforms to the specifications and
requirements of Lessee and that, as between Lessee and Lessor, it was delivered
in good repair and that Lessee has unconditionally accepted it hereunder "AS IS"
and "WITH ALL FAULTS" as of the Acceptance Date.

12. RETURN OF EQUIPMENT: Upon the expiration or earlier termination or
cancellation of this Lease with respect to any Item, except in the case of
retention by Lessee upon purchase of the Equipment in accordance with any
applicable Rider now or hereafter executed by the parties, Lessee shall, at its
own cost and expense, promptly return such Item to Lessor to such location as
Lessor may specify, for acceptance by Lessor in the condition required to be
maintained hereunder or in the condition specified in any applicable Rider now
or hereafter executed by the parties. Lessee shall pay for any repairs required
to place the Equipment in such condition. In the event Lessee shall not
surrender up and redeliver any Item to Lessor as herein required or shall not
timely pay the purchase price for any Item under any applicable Rider now or
hereafter executed by the parties, then the Term with respect to all of the
Items of Equipment covered by the Schedule covering the Item in question shall
continue (and, without limiting Lessee's other obligations, Lessee shall pay to
Lessor Basic Rent for all such Items of Equipment at the highest rate payable
during the Term) until the Item is duly returned, restored to the proper
condition and accepted by Lessor or the purchase price is paid in accordance
with the applicable Rider.

13. GENERAL TAX INDEMNITY: Lessee agrees to pay and indemnify, on an after-tax
basis, Lessor against all income, sales, use, personal property, ad valorem,
value added, leasing, stamp or other taxes, levies, imposts, fees, duties,
charges or withholdings of any nature, including all license and registration
fees, together with any penalties, fines or

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interest thereon (collectively, "Impositions") arising out of the transactions
contemplated by this Lease (including the acquisition of any Item prior to the
Acceptance Date) and imposed against Lessor, Lessee, this Lease (including any
Rent) or the Equipment or any Item by the United States or any state or
political subdivision thereof or any foreign government or taxing authority,
excluding, however, any Impositions based on or measured by the net income of
Lessor imposed by the United States or any state or political subdivision
thereof. Lessee will notify Lessor of the need to file any reports and returns
relating to any Imposition at least 60 days before the due date thereof and will
remit any amounts payable in connection therewith to Lessor 10 days before
payment is due. Lessor shall prepare and file all returns, and pay all
Impositions, unless Lessor directs Lessee otherwise. In the event that Lessor
pays any such Impositions, Lessee will on demand reimburse Lessor for the full
amount paid by Lessor therefor. Lessor shall have no obligation to contest or
refuse to pay any Imposition. Lessee acknowledges that in some jurisdictions
Impositions may not be billed, audited, assessed or due until after this Lease
has terminated and agrees that in such event, Lessee will remain liable for such
Impositions notwithstanding such termination. Lessor makes no warranty, express
or implied, regarding lessee's tax or accounting treatment of this Lease.

14. INTENTIONALLY DELETED

15. GENERAL INDEMNIFICATION: Lessee hereby agrees to indemnify, save, protect,
defend and keep harmless Lessor, and its agents, directors, employees,
successors and assigns, from and against any and all losses, damages (including
indirect, special or consequential damage), harm, expenses, including legal fees
(and a reasonable allocation of the compensation, costs and expenses of internal
counsel, based upon time spent), penalties, injuries, claims, actions and suits,
of whatsoever kind and nature, in contract, tort or otherwise, whether caused by
the active or passive negligence of Lessor (excluding, however, Lessor's gross
negligence or willful misconduct) or otherwise and including Lessor's strict
liability in tort, in any way arising out of, related to or in connection with
the selection, modification, purchase, acceptance, rejection, ownership,
delivery, lease, possession, maintenance, use, condition (including latent or
other defects,

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whether or not discoverable by Lessor or Lessee, and any claim for patent,
trademark or copyright infringement), return of, or operation of any Item prior
to its Return Date or relating to any default by Lessee or Event of Default.

16. DEFAULT: Each of the following shall constitute an event of default (an
"Event of Default") hereunder.

(a) Lessee shall fail to make any payment of Rent within ten (10) business days
after the same shall become due and payable;

(b) Lessee or any guarantor of all or any part of Lessee's obligations under
this Lease (a "Guarantor") shall fail to pay or perform, as and when due
(including any applicable grace period), any obligations to Lessor or any of its
affiliates arising under or in connection with this Lease, including, but not
limited to, Lessee's obligation under Sections 6, 7, 9 and 10 hereof, or arising
under any other document or instrument including, but not limited to, any
document or instrument executed in connection with any other presently existing
or future loans, leases or other credit arrangements from Lessor or any of its
affiliates in favor of Lessee, or otherwise;

(c) Lessee or any Guarantor shall make any representation or warranty,
respectively, in this Lease or in any certificate or statement furnished at any
time hereunder or in connection with this Lease which proves to have been untrue
or misleading in any material respect when made or furnished;

(d) Lessee or any Guarantor shall file a voluntary petition in bankruptcy or a
voluntary petition or answer seeking liquidation, administration,
reorganization, arrangement, readjustment of its debts, or for any other relief
under the Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether state, federal, or foreign, now or
hereafter existing; or Lessee or any Guarantor shall enter into any agreement
indicating its consent to, approval of, or acquiescence in, any such petition or
proceeding; or Lessee or any Guarantor shall apply for or permit the appointment
by

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consent or acquiescence of a receiver, custodian administrator, or trustee for
all or a substantial part of its property; or Lessee or any Guarantor shall make
an assignment for the benefit of creditors; or Lessee or any Guarantor shall be
unable or shall fail to pay its debts generally as such debts become due; or
Lessee or any Guarantor shall admit, in writing, its inability or failure to pay
its debts generally as such debts become due;

(e) There shall have been filed against Lessee or any Guarantor an involuntary
petition in bankruptcy or seeking liquidation, administration, reorganization,
arrangement, readjustment or its debts or for any other relief under the
Bankruptcy Code, or under any other act or law pertaining to insolvency or
debtor relief, whether state, federal or foreign, now or hereafter existing, or
Lessee or any Guarantor shall suffer or permit the involuntary appointment of a
receiver, custodian, administrator, or trustee for all or a substantial part of
its property; or Lessee or any Guarantor shall suffer or permit the issuance of
a warrant of attachment, diligence, execution or similar process against all or
any substantial part of its property; unless, in each other case, such petition,
appointment or process is fully bonded against, vacated or dismissed within
forty-five (45) days from its effective date, but not later than ten (10) days
prior to any proposed disposition of any assets pursuant to any such proceeding;

(f) The occurrence of any default in the payment or performance of any debt or
other obligations (including, but not limited to, capital lease obligations or
any corporate guaranty) either (i) owed by Lessee to any other person or entity
unaffiliated with Lessor, with an outstanding principal balance in excess of
$1,000,000.00, whether now or hereafter existing or (ii) owed by any Guarantor
to any other person or entity unaffiliated with Lessor, with an outstanding
principal balance in excess of $1,000,000.00, whether now or hereafter existing;

(g) There shall be a change in the beneficial ownership and control, directly or
indirectly, of the majority of the outstanding voting securities or other
interests entitled (without regard to the occurrence of any contingency) to
elect or appoint members of the board of directors or other managing body of
Lessee or Guarantor (a "change of control"), or there

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is any merger, consolidation, dissolution, liquidation, winding up or sale or
other transfer of all or substantially all of the assets of Lessee or Guarantor
pursuant to which there is a change of control or cessation of Lessee or
Guarantor or their businesses.

(h) The occurrence of any event described as a Default or an Event of Default in
any applicable Rider now or hereafter executed by the parties;

(i) There is a material adverse change in Lessee's or any Guarantor's financial
condition since the first Acceptance Date.

17. REMEDIES: (a) Upon the occurrence of any Event of Default, then, to the
extent permitted by applicable law, Lessor shall have the right to exercise any
one or more of the following remedies:

(i) To proceed by appropriate court action to enforce performance by Lessee of
its obligations hereunder or to recover damages for breach thereof;

(ii) To take possession of any Item, wherever located, without notice, legal
process, prior judicial hearing, or liability for trespass or other damage
(WHICH RIGHTS LESSEE HEREBY VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY WAIVES) and
thereafter hold, sell, operate or lease such Item free of claims of Lessee,
except as set forth below;

(iii) By notice to Lessee, to terminate or cancel this Lease and declare all
Rent then owing to Lessor hereunder immediately due and payable (whereupon
Lessee shall promptly pay the same):

(iv) To demand immediate payment of the Stipulated Loss Value of the Equipment
as liquidated damages for the remaining term (whereupon Lessee shall promptly
pay the same); and

(v) To pursue any other remedy available to Lessor at law or in equity.

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(b) Lessor and Lessee agree that an amount equal to the Stipulated Loss Value of
the Equipment represents a reasonable return for the use of the Equipment and
for the depreciation thereof, and shall be the basis for liquidated damages for
the remaining term for which Lessee shall be liable to Lessor upon the
occurrence of an Event of Default. Any amounts realized by Lessor on account of
the Equipment subsequent to Lessor's taking possession thereof pursuant to
Section 17(a)(ii) shall, after reimbursement to Lessor of all its expenses
incurred in connection therewith, including legal fees (and a reasonable
allocation of the compensation, costs and expenses of internal counsel, based
upon time spent), be credit to amounts of Stipulated Loss Value and all other
Rent owing by Lessee hereunder or, if such Stipulated Loss Value and all other
Rent has been paid, paid to Lessee.

(c) If Lessor elects not to sell, re-lease, or otherwise dispose of all or any
part of the Equipment, and holds such Equipment for Lessee for the remaining
Term, Lessor may recover, in addition to all Rent accrued and unpaid as of the
date of Lessor's recovery of possession of the Equipment, the present value, as
of such date, of the Rent for the remainder of the Term respecting such
Equipment (which Term shall include, for this purpose, to the extent applicable,
any agreed upon extensions and renewals which would, in the absence of an Event
of Default, automatically extend the Term upon Lessee's failure to exercise any
option to purchase contained in any addenda or Rider hereto). Present value
shall be computed using a discount rate equal to the Prime Rate in effect on the
Acceptance Date.

(d) If Lessor sells, leases, or otherwise disposes of all or any part of the
Equipment, Lessor may recover from Lessee, in addition to any Rent accrued and
unpaid as of the date of Lessor's recovery of possession of the Equipment, the
present value computed by using a discount rate equal to the Prime Rate in
effect on the Acceptance Date, of the difference between (i) the Rent for the
remainder of the Term respecting such Equipment (which Term shall include, for
this purpose, to the extent applicable, any agreed upon extensions and renewals
which would, in the absence of an Event of Default,

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automatically extend the Term upon Lessee's failure to exercise any option to
purchase contained in any addenda or Rider hereto) and (ii) except in the case
of a substantially similar lease, the market rent for such period of time
determined by Lessor in its sole discretion, or (iii) in the case of a lease of
Equipment which is substantially similar to this Lease, the total rent for the
lease term of such substantially similar lease.

(e) Time of performance of Lessee's obligations hereunder is of the essence. All
remedies of Lessor hereunder are cumulative, and may, to the extent permitted by
law, be exercised concurrently or separately, and the exercise of any one remedy
shall not be deemed to be an election of such remedy to the exclusion of any
other remedy or to preclude the exercise of any other remedy at any other time.
However, Lessor is entitled to only one satisfaction. Failure of the part of
Lessor to exercise, or delay in exercising, any right or remedy hereunder or
Lessor's failure at any time to require performance by Lessee of any of the
provisions hereof shall not operate as a waiver thereof, nor shall any single or
partial exercise by Lessor of any right or remedy hereunder preclude any other
further exercise thereof or the exercise of any other right or remedy. Lessee
shall be liable for all charges, costs, expenses and attorneys' fees incurred by
Lessor (including a reasonable allocation of the compensation, costs and
expenses of internal counsel, based upon time spent): (i) in defending or
protecting its interests in the Equipment or any Item or part thereof; (ii) in
the negotiation, execution, delivery, administration, amendment or enforcement
of this Lease or the collection of any Rent hereunder; (iii) in any lawsuit or
other legal proceeding in any way connected with this Lease, including, but not
limited to, any contract or tort or other actions, any arbitration or other
alternative dispute resolution proceeding, all appeals and judgment enforcement
actions and any bankruptcy proceeding (including, but not limited to, any relief
from stay and/or adequate protection motions, cash collateral disputes,
assumptions/rejection motions and disputes or objections to any proposed
disclosure statement or reorganization plan). Lessee acknowledges and agrees
that the preceding sentence shall survive and not be merged with any judgment in
connection with any exercise of any remedy by Lessor provided hereunder. Lessee
shall pay to Lessor interest on any overdue payments under Section 13, 14 or 15
or amounts due under this Section 17 after demand therefor and until paid at a

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rate per annum equal to the lesser of five percent (5%) above the Prime Rate
then in effect or the maximum amount permitted to be charged by Lessor by
applicable law.

18. ASSIGNMENT. (a) Lessor may sell, assign or otherwise transfer all or any
part of its right, title and interest in and to the Equipment and/or this Lease
or in any Schedule executed in connection herewith, to a third-party assignee,
subject to the terms and conditions of this Lease including, but not limited to,
the right to the quiet enjoyment by Lessee as set forth in Section 4 above. Any
such assignee may assume all of the rights and obligations of Lessor in
connection with the Equipment or any Schedules sold, assigned or otherwise
transferred, in which case Lessor shall be relieved therefrom. To the extent of
any such assumption of obligations, all references to Lessor herein shall
thereafter mean such assignee.

(b) Lessor may also pledge, mortgage or grant a security interest in the
Equipment and assign this Lease as collateral. Each such pledgee, mortgagee,
lien holder or assignee shall have any and all rights as may be assigned by
Lessor but none of the obligations of Lessor hereunder. Any pledge, mortgage or
grant of security interest in the Equipment or collateral assignment of this
Lease shall be subject to the terms and conditions hereof including, but not
limited to, the right to the quiet enjoyment of the Equipment by Lessee as set
forth in Section 4 above. If Lessor grants a security interest in all or any
part of any Schedule, any Equipment covered thereby and/or any sums payable
thereunder, only the original of the Schedule held by Lessor shall be effective
to transfer Lessor's rights therein.

(c) Lessee shall not be relieved of any of its obligations hereunder by reason
of any such sale, assignment, or other transfer referred to in Subsection (a)
above, or any pledge, mortgage, grant of security interest or collateral
assignment referred to in Subsection (b) above, all of which such obligations
shall remain absolute and unconditional, including, but not limited to, Lessee's
obligations to pay Rent as set forth in Section 5 above. Lessee agrees that it
will not assert against any purchaser, pledgee, mortgagee, lien holder or
assignee (collectively, an "Assignee") any defense, counterclaim or offset that
Lessee

                                                                              15

<PAGE>

may have against Lessor and Lessee acknowledges that any such assignment or
other transfer by Lessor, or any such pledge, mortgage, grant of security
interest or collateral assignment by Lessor, shall not materially change
Lessee's duties or obligations under this Lease nor materially increase the
burdens or risks imposed on Lessee. Upon the written request of Lessor, Lessee
shall acknowledge all such obligations to the Assignee, which such
acknowledgment shall be in such form and substance as Lessor or any such
Assignee may require, consistent with their normal business practices.

(d) LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, SUBLEASE, CONVEY OR PLEDGE ANY OF
ITS INTEREST IN THIS LEASE OR ANY OF THE EQUIPMENT, WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR. ANY SUCH SALE, TRANSFER, ASSIGNMENT, SUBLEASE, CONVEYANCE, OR
PLEDGE, WHETHER BY OPERATION OF LAW OR OTHERWISE, WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR, SHALL BE VOID.

19. REPORTS: (a) Lessee will immediately notify Lessor of:

(i) Each Event of Loss or accident involving or allegedly involving any Item; or

(ii) Any Lien (other than a Lessor Lien) which shall have attached to any Item;
or

(iii) The occurrence of any Event of Default or event which, with the lapse of
time or giving of notice or both could become an Event of Default.

(b) Lessee and each Guarantor shall, as soon as practicable, and in any event
within sixty (60) days after the end of each fiscal quarter, furnish to Lessor
its unaudited financial statements including in each instance, balance sheets,
income statements, and statements of cash flow, on a consolidated and
consolidating basis, as appropriate, and separate profit and loss statements as
of and for the quarterly period then ended and for its fiscal year to date,
prepared in accordance with generally accepted accounting principles,
consistently applied, and Lessee and any Guarantor hereunder shall, as soon as

                                                                              16

<PAGE>

practicable, and in any event within one hundred five (105) days after the end
of each fiscal year, furnish to Lessor its annual audited financial statements,
including balance sheets, income statements and statements of cash flow for the
fiscal year then ended, on a consolidated and consolidating basis, as
appropriate, which have been prepared by its independent accountants. Such
audited financial statements shall be accompanied by the independent
accountant's opinion, which opinion shall be in form generally recognized as
"unqualified".

20. REPRESENTATIONS AND WARRANTIES OF LESSEE: Lessee hereby represents and
warrants to Lessor that on the date hereof and on the date of execution of each
Schedule:

(a) Lessee has full power, authority and legal right to enter into and to
perform its obligations under this Lease and all related documents (collectively
the "Documents"), is in good standing under the law of its jurisdiction of
incorporation and is duly qualified to do business and in good standing wherever
necessary to carry on its present business and operations, including the
jurisdiction(s) where the Equipment is or is to be located. Lessee shall not,
without 30 days prior written notice to Lessor, change its name such that any
financing statement or other record notice may become misleading or change its
location (including without limitation, its jurisdiction of organization if it
is a registered organization) from its location as of the date of this
Agreement.

(b) The Documents have been duly authorized, executed and delivered by Lessee
and constitute valid, legal and binding agreements of Lessee, enforceable
against it in accordance with their terms.

(c) No approval, consent or withholding of objections is required from any
governmental authority or instrumentality, or any person, with respect to the
entry into or performance by Lessee of the Documents except such as have already
been obtained.

                                                                              17

<PAGE>

(d) The entry into and performance by Lessee of its obligations under the
Documents will not (i) violate any judgment, order, law or regulation applicable
to Lessee or any provision of Lessee's Certificate of Incorporation or By-Laws;
or (ii) result in any breach of, constitute a default under or result in the
creation of any Lien, pursuant to any indenture, mortgage, deed of trust, bank
loan or credit agreement or other instrument to which Lessee is a party.

(e) There is no existing Event of Default under this Lease or any existing
default in connection with any indenture, mortgage, deed of trust, bank loan or
credit agreement or other instrument to which Lessee is a party.

(f) There are no suits or proceedings pending or threatened in any court or by
any governmental agency against or affecting Lessee, which, if adversely
determined, would have a material adverse effect on the ability of Lessee to
fulfill its obligations under this Lease or its financial condition or
prospects.

(g) Each balance sheet, income statement, and statement of cash flow delivered
to Lessor has been prepared in accordance with generally accepted accounting
principles, and since the date of the most recent such balance sheet, income
statement, and statement of cash flow, there has been no material adverse change
in the financial condition or prospects of Lessee.

(h) The Equipment will at all times be used for commercial or business purposes.

21. MISCELLANEOUS, JURY WAIVER, GOVERNING LAW, JURISDICTION, VENUE: (a) Nothing
herein contained shall give or convey to Lessee any right, title or interest in
and to any Equipment leased hereunder except as a lessee. Should Lessor permit
the use of any Equipment beyond the specified Term thereof, the obligations of
Lessee hereunder shall continue (including the obligation to pay the Basic Rent
at the highest rate applicable during the Term with respect thereto) and such
permissive use shall not be construed as renewal of the Term thereof nor as a
waiver of any right or

                                                                              18

<PAGE>

continuation of any obligation of Lessor hereunder. Lessee's obligations
pursuant to Sections 11, 12, 13, 14 and 15 shall survive the expiration or
earlier termination of this Lease and Lessee shall remain liable therefor.
Equipment shall at all times remain personal property of Lessor notwithstanding
any affixation to the real estate.

(b) The Equipment subject hereto is and at all times shall be and remain the
sole and exclusive property of Lessor, and Lessee shall have no right, title or
interest therein or thereto, except as expressly set forth in this Lease. As a
precaution, Lessee hereby also grants hereto, Lessor a first priority continuing
lien and security interest in the Equipment subject thereto and the proceeds
thereof to secure any obligation of Lessee under this Lease, each Schedule
hereunder, any other agreement between Lessor and Lessee. Lessee further agrees
that Lessee's obligations hereunder are additionally secured by all security
interests, liens and encumbrances heretofore, now or hereafter granted by Lessee
to Lessor under any instrument, whether or not related to this Lease. Lessee
agrees to execute any instrument or instruments necessary or expedient for
filing, recording, perfecting, or notifying of the interest of Lessor in the
Equipment upon request of, and as determined by, Lessor. Lessee hereby
specifically authorizes Lessor to file financing statements not signed by Lessee
or to execute same for and on behalf of Lessee as Lessee's attorney-in-fact,
irrevocably and coupled with an interest, for such purposes.

(c) To the extent permitted by applicable law, Lessee hereby waives any and all
rights and remedies conferred upon a lessee by such applicable law (including
but not limited to Article 2A of the UCC) to: (i) cancel this Lease; (ii)
repudiate this Lease; (iii) reject the Equipment; (iv) revoke acceptance of the
Equipment; (v) recover damages from Lessor for any breaches of warranty or for
any other reason; (vi) a security interest in the Equipment in Lessee's
possession or control for any reason; (vii) deduct all or any part of any
claimed damages resulting from Lessor's default, if any, under this Lease;
(viii) accept partial delivery of the Equipment; (ix) "Cover" by making any
purchase or lease of, or contract to purchase or lease, Equipment in
substitution for that due from Lessor; (x) recover any general, special,
incidental or consequential damages, for any reason whatsoever; and (xi) obtain
specific performance, replevin, detinue, sequestration, claim

                                                                              19

<PAGE>

and delivery or the like for any Equipment identified to this Lease. To the
extent permitted by applicable law, Lessee also hereby waives any rights now or
hereafter conferred by statute or otherwise which may require Lessor to sell,
lease or otherwise use any Equipment in mitigation of Lessor's damages as set
forth in Section 17 of this Lease or which may otherwise limit or modify any of
Lessor's rights or remedies under Section 17.

Any action by Lessee against Lessor for any default by Lessor under this Lease,
including breach of warranty or indemnity, shall be commenced within one (1)
year after any such cause of action accrues. LESSOR AND LESSEE EACH WAIVES ALL
RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING HEREFROM OR IN RELATION
HERETO.

(d) All notices hereunder shall be in writing and shall be delivered by hand, by
overnight courier or by certified or registered mail, return receipt requested,
to each party at its address set forth below, as such address may be changed by
such notice. All notices shall be deemed given when received, when delivery is
refused or when the same are returned for failure to be called for.

(e) If Lessee fails to perform any of its obligations hereunder Lessor may, but
shall not be obligated to, perform the same (without such performance
constituting a cure or waiver of Lessee's failure to so perform) and Lessee will
on demand reimburse Lessor for all its costs and expenses incurred in connection
therewith.

(f) THIS LEASE AND THE RIGHTS AND OBLIGATION OF THE PARTIES HEREUNDER SHALL IN
ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF ILLINOIS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF
THE LOCATION OF THE EQUIPMENT OR THE STATE OF INCORPORATION OR PRINCIPAL PLACE
OF BUSINESS OF THE LESSEE.

                                                                              20

<PAGE>

LESSEE (i) CONSENTS AT LESSOR'S ELECTION AND WITHOUT LIMITING LESSOR'S RIGHT TO
COMMENCE AN ACTION IN ANY OTHER JURISDICTION, TO THE EXCLUSIVE JURISDICTION AND
VENUE OF ANY COURTS (FEDERAL, STATE OR LOCAL) SITUATED IN COOK COUNTY, ILLINOIS;
(ii) WAIVES ANY OBJECTION TO IMPROPER VENUE AND FORUM NON CONVENIENS; AND (iii)
CONSENTS TO SERVICE OF PROCESS BY CERTIFIED MAIL, POSTAGE PREPAID, TO LESSEE AT
ITS ADDRESS AS SET FORTH HEREIN, WHICH SERVICE SHALL BE DEEMED COMPLETE WITHIN
TEN (10) DAYS AFTER THE DATE OF MAILING THEREOF. If any provision of this Lease
shall contravene or be invalid under applicable law or regulation, such
contravention or invalidity shall not affect the entire Lease, the provisions
held to be invalid to be deemed deleted or modified and the Lease interpreted
and construed as though such invalid provision or provisions were not part
hereof or conformed thereto.

(g) This Lease, together with each Schedule and Rider, constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes and replaces any prior or contradictory representations, warranties
or agreements by Lessor and Lessee. Unless set forth in a Schedule or Rider,
signed by an authorized manager of Lessor, Lessee shall have no right to
purchase or otherwise acquire title to or ownership of any Item of Equipment. No
agent or employee of any supplier or manufacturer is authorized to bind Lessor
to this Lease or any Schedule, or to waive, alter or add to the terms and
conditions printed herein and in any Schedule. This is a non-cancelable Lease
and Lessee's obligations hereunder are absolute and unconditional. This Lease,
any amendments to, variations or modifications of this Lease, any waiver of its
provisions or conditions, any consent hereunder and all Schedules shall not be
valid unless in writing and signed by an authorized officer or manager of
Lessor.

----------
(LESSEE'S INITIALS)

                                                                              21

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the 28 day
of September, 2001.

HELLER FINANCIAL LEASING, INC., a Delaware corporation
By: John T. Smith
Name: John T. Smith
Title: Vice President
Address: 500 West Monroe Street
Chicago, IL 60661
Facsimile No.: (312) 441-6915

STAR SCIENTIFIC, INC., a Delaware corporation
By: Christopher G. Miller
Name: Christopher G. Miller
Title: Chief Financial Officer
Address: 801 Liberty Way
Chester, Virginia 23836
Facsimile No.: 804-530-7743

STAR TOBACCO & PHARMACEUTICALS, INC., a Virginia corporation
By: David M. Dean
Name: David M. Dean
Title: Secretary & Treasurer
Address: 801 Liberty Way
Chester, Virginia 23836
Facsimile No.: 804-530-9257

                                                                              22

<PAGE>

MASTER LEASE SCHEDULE

STAR SCIENTIFIC, INC.
801 Liberty Way
Chester, Virginia 23836

STAR TOBACCO & PHARMACEUTICALS, INC.
801 Liberty Way
Chester, Virginia 23836

Master Lease Agreement No.: 196-0181
Master Lease Agreement Date: September 28, 2001
Master Lease Schedule No.: 001
Master Lease Schedule Date: September 28, 2001

The Equipment described below is hereby leased on the terms and conditions
specified herein and in the above-referenced Master Lease Agreement between the
Lessee shown above and Heller Financial Leasing, Inc., a Delaware corporation,
the terms and conditions of which are incorporated herein by this reference.
Capitalized terms used in this Schedule shall have the same meaning as set forth
in the above-referenced Master Lease Agreement.

1. Items of Equipment. The Items of Equipment covered by this Schedule are
described in the attached Schedule A, which is incorporated herein by this
reference, together with all attachments, replacements, parts, substitutions,
acquisitions, upgrades, repairs, accessions and accessories incorporated therein
and/or affixed thereto (the "Equipment").

2. Equipment Cost. The aggregate Equipment Cost of the Items of Equipment
covered by this Schedule is Three Million and 00/100 Dollars ($3,000,000.00).
The Equipment Cost of each Item of Equipment covered by this Schedule shall be
the purchase price therefor as reflected in the contract or bill of sale, as
applicable, by which Lessor acquires the Item.

                                                                              23

<PAGE>

3. Equipment Location. The location(s) of the Items of Equipment covered by this
Schedule shall, at all times during the Term with respect thereto, be as set
forth in the attached Schedule A.

4. Classification. The Equipment covered by this Schedule is classified under
Section 168(e) of the Internal Revenue Code of 1986, as N/A year property.

5. Acceptance Date. The Acceptance Date for the Equipment covered by this
Schedule is September 28, 2001.

6. Commencement Date. The Commencement Date for the Equipment covered by this
Schedule shall be October 1, 2001.

7. Initial Term. The initial Term for the Equipment covered by this Schedule
shall be the period from the Acceptance Date to the Commencement Date, plus 36
months, plus one (1) day if rent is payable in arrears.

8. Basic Rent. Basic Rent for the Equipment covered by this Schedule in the
amount of Ninety-five Thousand Four Hundred Twenty-two and 81/100 Dollars
($95,422.81), plus applicable taxes, shall be due in advance on the first day of
each consecutive calendar month during the Term, commencing on October 1, 2001.

Executed and delivered as of the date above shown as a Schedule to the
above-referenced Master Lease Agreement.

"LESSOR"
HELLER FINANCIAL LEASING, INC., a Delaware Corporation
By: John T. Smith
Name: John T. Smith
Title: Vice President

                                                                              24

<PAGE>

"LESSEE"
STAR SCIENTIFIC, INC., a Delaware corporation
By: Christopher G. Miller
Name: Christopher G. Miller
Title: Chief Financial Officer

STAR TOBACCO & PHARMACEUTICALS, INC., a Virginia corporation
By: David M. Dean
Name: David M. Dean
Title: Secretary & Treasurer

Chicago\Star Scientific, Inc.\massched\092001

                                                                              25

<PAGE>

Master Lease Agreement No.: 196-0181
Master Lease Agreement Date: September 28, 2001
Master Lease Schedule No.: 001
Master Lease Schedule Date: September 28, 2001

STIPULATED LOSS VALUE RIDER

This Stipulated Loss Value Rider is an integral part of the above-referenced
Master Lease Schedule (the "Schedule") to the above-referenced Master Lease
Agreement (the "Lease") between Star Scientific, Inc., a Delaware corporation
and Star Tobacco & Pharmaceuticals, Inc., a Virginia corporation (individually
and collectively, "Lessee"), and Heller Financial Leasing, Inc., a Delaware
corporation, ("Lessor"), the terms and conditions of which are incorporated
herein by this reference. Capitalized terms used in this Rider and not otherwise
defined herein shall have the same meaning as set forth in the Lease.

The Stipulated Loss Value for each item of Equipment described in the Schedule
shall equal the original Equipment Cost of the item multiplied by the factor
below corresponding to the rental period month in which payment of the
Stipulated Loss Value is due, plus the Basic Rent due on such payment date:

PERIOD                        FACTOR                PERIOD              FACTOR
Pre-Commencement Date         105.00%
1                             100.74%               19                  61.78%
2                             99.00%                20                  59.06%
3                             97.22%                21                  56.28%
4                             95.39%                22                  53.43%
5                             93.51%                23                  50.51%
6                             91.59%                24                  47.51%
7                             89.62%                25                  44.44%
8                             87.60%                26                  41.29%
9                             85.53%                27                  38.06%
10                            83.41%                28                  34.75%
11                            81.24%                29                  31.36%
12                            79.01%                30                  27.88%
13                            76.73%                31                  24.32%
14                            74.39%                32                  20.67%
15                            71.99%                33                  16.93%
16                            69.53%                34                  13.09%
17                            67.01%                35                  9.16%
18                            64.43%                36                  5.13%

Executed and delivered effective as of the date of the Schedule.
"LESSOR"
HELLER FINANCIAL LEASING, INC., a Delaware corporation
By: John T. Smith
Name: John T. Smith
Title: Vice President

                                                                              26

<PAGE>

"LESSEE"
STAR SCIENTIFIC, INC., a Delaware corporation
By: Christopher G. Miller
Name: Christopher G. Miller
Title: Chief Financial Officer

STAR TOBACCO & PHARMACEUTICALS, INC., a Virginia corporation
By: David M. Dean
Name: David M. Dean
Title: Secretary & Treasurer

                                                                              27

<PAGE>

Master Lease Agreement No.: 196-0181
Master Lease Agreement Date: September 28, 2001
Master Lease Schedule No(s).: 001
Master Lease Schedule Date(s): September 28, 2001

PURCHASE OPTION RIDER

This Purchase Option Rider is an integral part of the above-referenced Master
Lease Schedule(s) (the "Schedule(s)") to the above-referenced Master Lease
Agreement (the "Lease") between Star Scientific, Inc., a Delaware corporation
and Star Tobacco & Pharmaceuticals, Inc., a Virginia corporation (individually
and collectively, "Lessee"), and Heller Financial Leasing, Inc., a Delaware
corporation, ("Lessor"), the terms and conditions of which are incorporated
herein by this reference. Capitalized terms used in this Rider and not otherwise
defined herein shall have the same meaning as set forth in the Lease.

Notwithstanding any provisions either express or implied to the contrary in the
Lease or Schedule(s), provided no Event of Default or event which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default, has occurred and is continuing, Lessee, upon written notice received by
Lessor from Lessee not less than one hundred eighty (180) days prior to the
expiration of the Initial Term of the Schedule first expiring under the Lease,
as shown in such Schedule ("the Initial Term"), shall have the right, but not
the obligation, with respect to all, but not less than all, of the Items of
Equipment described in the Schedule(s), to purchase all of Lessor's right, title
and interest, if any, in and to all, but not less than all, such items of
Equipment for an amount equal to (a) One and 00/100 Dollar ($1.00) plus (b) any
sales, use, property or excise taxes on or measured by such sale and any other
expenses of transfer (all of the foregoing being collectively referred to herein
as the "Aggregate Purchase Price"). Lessee shall pay the Aggregate Purchase
Price to Lessor not later than the last day of the Initial Term.

If for any reason whatsoever, Lessee does not exercise its purchase option as
contained in this Rider, then all of the terms and provisions of the Schedule(s)
shall continue in full force and effect with respect to such items of Equipment
for the full Term with respect thereto.

Lessee agrees that any sale, conveyance or transfer by Lessor pursuant hereto
shall be of Lessor's right, title and interest, if any, in and to the Items of
Equipment, and shall be AS IS, WHERE IS, WITHOUT WARRANTIES OF ANY KIND,
EXPRESSED OR IMPLIED, INCLUDING WARRANTY OF MERCHANTABILITY AND FITNESS FOR
PURPOSE, and Lessee shall hold harmless and indemnify Lessor from and against
all claims, liabilities, losses and costs alleged against or incurred by Lessor,
including claims for property damage, personal injury or death to Lessee and/or
third parties growing out of or resulting from the ownership, use or possession
of the Items of Equipment, or imposed upon, inclined or directed against Lessor,
whatsoever levied on, on account of, or as a consequence of the sale and
purchase of the Items of Equipment.

Executed and delivered effective as of September 28, 2001.

"LESSOR"
HELLER FINANCIAL LEASING, INC., a Delaware corporation
By: John T. Smith
Name: John T. Smith
Title: Vice President

                                                                              28

<PAGE>

"LESSEE"
STAR SCIENTIFIC, INC., a Delaware corporation
By: Christopher G. Miller
Name: Christopher G. Miller
Title: Chief Financial Officer

STAR TOBACCO & PHARMACEUTICALS, INC., a Virginia corporation
By: David M. Dean
Name: David M. Dean
Title: Secretary and Treasurer

                                                                              29<PAGE>

                                                                   Exhibit 10.50

SLB/CS(R070101)4122182001 *LEAS8760*
PROCESSING EQUIPMENT SCHEDULE
SCHEDULE NO. 001
DATED THIS ____________
TO MASTER LEASE AGREEMENT
DATED AS OF ____________________
Lessor & Mailing Address:
General Electric Capital Corporation
1000 Windward Concourse Suite 403
Alpharetta, GA 30005

Lessee & Mailing Address:
Star Scientific, Inc.
801 Liberty Way
Chester, VA 23836

This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("Agreement" said Agreement and this Schedule being collectively referred to as
"Lease"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.

A. Equipment: Subject to the terms and conditions of the Lease, Lessor agrees to
Lessee the Equipment described below (the "Equipment").

<TABLE>
<CAPTION>
                                                                                      Model and
Number            Capitalized                  Manufacturer          Serial           Type of
of Units          Lessor's Cost                                      Number           Equipment
<S>               <C>                          <C>                   <C>              <C>
*1                $532,429.00*                 Fette                 659              P3200 TSC
                                                                                      Double-Sided
                                                                                      Rotary Press
**                $1,267,580.00*               All-Fill                               Moist Snuff
                                                                                      Filling System
*                 $1,647,510.00*               All-Fill                               Packaging Line
</TABLE>

2 Complete Tobacco Lines more fully described in Exhibit 1 attached together
with (a) all machinery, equipment, tooling, components, attachments, parts,
fittings, accessories, replacements, upgrades, now existing or hereafter
becoming a part thereof and (b) to the extent related to any Line including all
additions, attachments, accessories and accessions thereto, and any and all
substitutions, replacements or exchanges therefor, and all insurance and/or
other proceeds thereof by and between Lessee and Lessor whether now owned or
hereafter acquired.

Equipment referenced above is located at the following locations *168 Duckworth
Dr., Chase City, Mecklenberg County, VA 23924

**16 South Market St., Petersburg, Petersburg (Ind. City), VA 23803

                                                                               1

<PAGE>

B. Financial Terms

1. Advance Rent (if any): $109,870.70
2. Capitalized Lessor's Cost: $3,447,519.00
3. Basic Term (No. of Months): 60 Months
4. Basic Term Lease Rate Factor: .01593475
5. Basic Term Commencement Date: July 1, 2001
6. Lessee Federal Tax ID No.: 521402131
7. Last Delivery Date: July 1, 2001
8. Daily Lease Rate Factor: .00072001

9. First Termination Date: Thirty-six (36) months after the Basic Term
Commencement Date.

10. Interim Rent: For the period from and including the Lease Commencement Date
to but not including the Basic Term Commencement Date ("Interim Period"), Lessee
shall pay as rent ("Interim Rent") for each unit of Equipment, the product of
the Daily Lease Rate Factor times the Capitalized Lessor's Cost of such unit
times the number of days in the Interim Period. Interim Rent shall be due on the
Lease Commencement Date.

11. Basic Term Rent: Commencing on July 1, 2001 and on the same day of each
month thereafter (each, a "Rent Payment Date") during the Basic Term, Lessee
shall pay as rent ("Basic Term Rent") the product of the Basic Term Lease Rate
Factor times the Capitalized Lessor's Cost of all Equipment on this Schedule.

C. Tax Benefits Depreciation Deductions:

1. Depreciation method is the 200% declining balance method, switching to
straight line method for the 1st taxable year for which using the straight line
method with respect to the adjusted basis as of the beginning of such year will
yield a larger allowance.

                                                                               2

<PAGE>

2. Recovery Period: 7 years.

3. Basis: 100% of the Capitalized Lessor's Cost.

D. Property Tax

APPLICABLE TO EQUIPMENT LOCATED IN VIRGINIA: Lessee agrees that it will not list
any of such Equipment for property tax purposes or report any property tax
assessed against such Equipment until otherwise directed in writing by Lessor.
Upon receipt of any property tax bill pertaining to such Equipment from the
appropriate taxing authority, Lessor will pay such tax and will invoice Lessee
for the expense. Upon receipt of such invoice, Lessee will promptly reimburse
Lessor for such expense. Lessor may notify Lessee (and Lessee agrees to follow
such notification) regarding any changes in property tax reporting and payment
responsibilities.

E. Article 2A Notice

IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE
AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES THE FOLLOWING
DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A) THE PERSON(S)
SUPPLYING THE EQUIPMENT IS Fette America, Inc., All Fill, and Richmond Plastics
Inc. (THE "SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE PROMISES AND WARRANTIES,
INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE LESSOR BY SUPPLIER(S), WHICH
IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS PART OF THE CONTRACT BY
WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT TO SUCH EQUIPMENT,
LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AN ACCURATE AND COMPLETE
STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING ANY DISCLAIMERS AND
LIMITATIONS OF THEM

                                                                               3

<PAGE>

OR OF REMEDIES. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES
ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND ANY
RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY LIMIT OR
MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND REMEDIES SECTION
OF THE AGREEMENT.

F. Stipulated Loss and Termination Value Table*

<TABLE>
<CAPTION>
# of base payments           termination value % of cost          stipulated loss value % of cost
<S>                          <C>                                  <C>
1                            102.076                              106.007
2                            101.198                              105.110
3                            100.301                              104.194
4                            99.384                               103.258
5                            98.453                               102.307
6                            97.504                               101.339

7                            96.540                               100.355
8                            95.559                               99.356
9                            94.564                               98.341
10                           93.550                               97.308
11                           92.519                               96.257
12                           91.468                               95.187
13                           90.400                               94.099
14                           89.315                               92.995
15                           88.212                               91.873
16                           87.090                               90.732
17                           85.952                               89.575
18                           84.795                               88.398

19                           83.620                               87.203
</TABLE>

                                                                               4

<PAGE>

<TABLE>
<S>                          <C>                                  <C>
20                           82.428                               85.992
21                           81.219                               84.764
22                           79.995                               83.521
23                           78.756                               82.262
24                           77.500                               80.987
25                           76.229                               79.697
26                           74.941                               78.389
27                           73.637                               77.066
28                           72.316                               75.726
29                           70.979                               74.370
30                           69.625                               72.996

31                           68.255                               71.607
32                           66.867                               70.200
33                           65.462                               68.775
34                           64.042                               67.337
35                           62.609                               65.884
36                           61.161                               64.417
37                           59.699                               62.935
38                           58.218                               61.435
39                           56.723                               59.921
40                           55.213                               58.391
41                           53.685                               56.844
42                           52.141                               55.281
43                           50.583                               53.703
44                           49.006                               52.107
45                           47.409                               50.491
46                           45.801                               48.863
47                           44.179                               47.222
48                           42.544                               45.568
49                           40.895                               43.900
</TABLE>

                                                                               5

<PAGE>

50                           39.229                               42.214
51                           37.549                               40.515
52                           35.856                               38.802
53                           34.144                               37.071
54                           32.419                               35.327

55                           30.788                               33.677
56                           29.194                               32.064
57                           27.601                               30.451
58                           26.008                               28.838
59                           24.414                               27.226
60                           22.821                               25.613

*The Stipulated Loss Value or Termination Value for any unit of Equipment shall
be the Capitalized Lessor's Cost of such unit multiplied by the appropriate
percentage derived from the above table. In the event that the Lease is for any
reason extended, then the last percentage figure shown above shall control
throughout any such extended term.

G. Modifications and Additions for This Schedule Only

For purposes of this Schedule only, the Agreement is amended as follows:

1. The LEASING Section subsection (b) of the Lease is hereby deleted in its
entirety and the following substituted in its stead:

b) The obligation of Lessor to purchase the Equipment from Lessee and to lease
the same to Lessee shall be subject to receipt by Lessor, on or prior to the
earlier of the Lease Commencement Date or Last Delivery Date therefor, of each
of the following documents in form and substance satisfactory to Lessor: (i) a
Schedule for the Equipment, (ii) evidence of insurance which complies with the
requirements of the INSURANCE

                                                                               6

<PAGE>

Section of the Lease, and (iii) such other documents as Lessor may reasonably
request. Once the Schedule is signed, the Lessee may not cancel the Lease.

2. The DELIVERY, USE AND OPERATION Section subsection (a) of the Lease shall be
deleted and the following substituted in its stead:

The parties acknowledge that this is a sale/leaseback transaction and the
Equipment is in Lessee's possession as of the Lease Commencement Date.

3. BILL OF SALE

Lessee, in consideration of the Lessor's payment of the amount set forth in B2.
above, which includes any applicable sales taxes (which payment Lessee
acknowledges), hereby grants, sells, assigns, transfers and delivers to Lessor
the Equipment along with whatever claims and rights Seller may have against the
manufacturer and/or Supplier of the Equipment, including but not limited to all
warranties and representations. At Lessors request Lessee will cause Supplier to
deliver to Lessor a written statement wherein the Supplier (i) consents to the
assignment to Lessor of whatever claims and rights Lessee may have against
Supplier, (ii) agrees not to retain any security interest, lien or other
encumbrance in or upon the Equipment at any time, and to execute such documents
as Lessor may request to evidence the release of any such encumbrance, and (iii)
represents and warrants to Lessor (x) that Supplier has previously conveyed full
title to the Equipment to Lessee, (y) that the Equipment was delivered to Lessee
and installation completed, and (z) that the final purchase price of the
Equipment (or a specified portion of such purchase price) has been paid by
Lessee.

Lessor is purchasing the Equipment for leasing back to Lessee pursuant to the
Lease. Lessee represents and warrants to Lessor that (i) Lessor will acquire by
the terms of this Bill of Sale good title to the Equipment free from all liens
and encumbrances whatsoever; (ii) Lessee has the right to sell the Equipment;
and (iii) the Equipment has been delivered to Lessee in good order and
condition, and conforms to the specifications, requirements

                                                                               7

<PAGE>

and standards applicable thereto; and (iv) the equipment has been accurately
labeled, consistent with the requirements of 40 CFR part 82 Subpart E, with
respect to products manufactured with a controlled (ozone-depleting) substance.

Lessee agrees to save and hold harmless Lessor from and against any and all
federal, state, municipal and local license fees and taxes of any kind or
nature, including, without limiting the generality of the foregoing, any and all
excise, personal property, use and sales taxes, and from and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions and suits
resulting therefrom and imposed upon, incurred by or asserted against Lessor as
a consequence of the sale of the Equipment to Lessor.

4. ACCEPTANCE

Pursuant to the provisions of the Lease, as it relates to this Schedule, Lessee
hereby certifies and warrants that (i) all Equipment listed above has been
delivered and installed (if applicable); (ii) Lessee has inspected the
Equipment, and all such testing as it deems necessary has been performed by
Lessee, Supplier or the manufacturer; and (iii) Lessee accepts the Equipment for
all purposes of the Lease, the purchase documents and all attendant documents.

Lessee does further certify that as of the date hereof (i) Lessee is not in
default under the Lease; (ii) the representations and warranties made by Lessee
pursuant to or under the Lease are true and correct on the date hereof and (iii)
Lessee has reviewed and approves of the purchase documents for the Equipment, if
any.

5. EQUIPMENT SPECIFIC PROVISIONS

MAINTENANCE PROVISIONS: In addition to the provisions provided for in the
MAINTENANCE Section of the Lease, Lessee shall, at its expense:

(a) maintain the Equipment in a manner and frequency suggested by the
manufacturer.

                                                                               8

<PAGE>

(b) maintain the Equipment in an operable state and shall not discontinue
operation of the Equipment throughout the Lease term.

(c) maintain the Equipment to industry standards.

(d) maintain the Equipment in a similar manner and fashion as if the Equipment
were owned by the Lessee.

(e) maintain the Equipment under a preventive maintenance program by qualified
professionals who possess a working knowledge of the mechanical operation of the
Equipment including electrical systems, motors, drives, controls, accessories,
lubricants and all other items necessary to make the machine operate to its
original manufacturer's specifications.

(f) have the Equipment meet all local, state, and federal laws, regulations and
codes that regulate the use and operation of such Equipment and will not
contribute to or be used in any way as to directly or indirectly violate any
local, state or federal law including Food and Drug Administration and
Environmental Protection Agency.

(g) maintain a maintenance log on the Equipment showing all routine and
non-routine maintenance and repairs. Said log shall list in summary form
maintenance, repairs or modifications performed on the Equipment, the date any
and all of such service and by whom the service was performed. This log shall be
made available to the Lessor at its request during normal working hours or the
Lessee.

INSPECTION: The REPORTS Section subsection (c) of the Lease is deleted and
replaced with the following:

(c) Lessor at its sole discretion, may from time to time, inspect the Equipment
at the Lessors sole expense. If any discrepancies are found as they pertain to
the general

                                                                               9

<PAGE>

condition of the Equipment as required hereunder, the Lessor will, communicate
these discrepancies to the Lessee in writing. The Lessee shall have thirty (30)
days to rectify these discrepancies at his sole expense. The Lessee should pay
all expenses for a re-inspection by a Lessor appointed expert if corrective
measures are required.

RETURN PROVISIONS: In addition to the provisions provided for in the RETURN OF
EQUIPMENT Section of the Lease, and provided that Lessee has elected not to
exercise its option to purchase the Equipment, Lessee shall, at its expense:

(a) At least ninety (90) days and not more than one hundred twenty (120) days
prior to lease termination: (i) ensure Equipment has been maintained, and is
operating within manufacturer's specifications, as well as all local, state and
federal laws and regulations, including those of the Food and Drug
Administration and Environmental Protection Agency and; (ii) cause
manufacturer's representative or other qualified maintenance provider,
acceptable to Lessor, to perform a physical inspection and test of all the
components and capabilities of the Equipment and to provide a full inspection
report to Lessor.

(b) Upon lease termination: (i) fill to operation levels all internal fluids,
secure filler caps, seal disconnection hoses, reinstall, and match mark all
connections; (ii) have the manufacturer deinstall all equipment; (iii) properly
skid and pack and transport the Equipment per the manufacturer's requirements to
any location(s) within the continental United States as Lessor shall direct;
(iv) at lessor's choice, either (1) allow Lessor, at Lessor's expense, and
provided Lessor has provided reasonable notice to Lessee, arrange for an on-site
auction of the Equipment which will be conducted in a manner which will not
interfere with Lessee's business operations, or (2) at the request of Lessor,
provide safe, secure storage for the Equipment for sixty (60) days after
expiration or earlier termination of the Lease at an accessible location
satisfactory to Lessor.

H. Payment Authorization

                                                                              10

<PAGE>

You are hereby irrevocably authorized and directed to deliver and apply the
proceeds due under this Schedule as follows:

<TABLE>
<CAPTION>
Company Name                              Address                                   Amount
<S>                                       <C>                                       <C>
Fette America, Inc.                       400 Forge Way, Rockaway, NJ 07865         $372.700.00
All Fill                                  418 Creamery Way, Eaton, PA 19341         $513,894.00
Star Scientific, Inc.                     801 Liberty Way, Chester, VA              $1,292,366.26
General Electric Capital Corporation         Security Deposit                       $1,268,558.74
</TABLE>

This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.

Lessee hereby authorizes Lessor to file a financing statement and amendments
thereto describing the Equipment described in this Schedule and adding any other
collateral described herein and containing any other information required by the
applicable Uniform Commercial Code. Further, Lessee irrevocably grants to Lessor
the power to sign Lessee's name and generally to act on behalf of Lessee to
execute and file financing statements and other documents pertaining to any or
all of the Equipment.

Except as expressly modified hereby, all terms and provisions of the Agreement
shall remain in full force and effect. This Schedule is not binding or effective
with respect to the Agreement or Equipment until executed on behalf of Lessor
and Lessee by authorized representatives of Lessor and Lessee, respectively.

IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.

LESSOR:

General Electric Capital Corporation
By: Mike Caruso
Name: Mike Caruso
Title: Sr. Risk Analyst

                                                                              11

<PAGE>

LESSEE:

Star Scientific, Inc.
By: Christopher G. Miller
Name: Christopher G. Miller
Title: Chief Financial Officer

Exhibit 1

<TABLE>
<CAPTION>
QUANTITY          DESCRIPTION                                                   UNIT PRICE            AMOUNT
<S>               <C>                                                           <C>                   <C>
1                 Moist Snuff Filling System to include the following
                  equipment:
                  A. Stricklin Ribbon Blender ($180.00)
                  B. Palace Pkg Unscrambler Model CB-42/P-5438
                  C. Nerak Bucket Elevator NS-P2008-2401-100
                  D. All-Fill Belt Conveyor Serial #50230-1
                  E. System Vibrator Model BF-2-AS
                  F. All-Fill Rotary Filler Serial #50230
                  G. Alpha Checkweigher Serial #195178
                  H. Goring Kerr Metal Detector Model #DSP 2SS4X3
                  I. Palace Pkg Lidder Model # CB42/P-5439
                  J. Garvey Accumulating Conveyor Series #9700
                  K. Quadrell Labeler #Q60/CG12
                  L. All-Fill 900 Conveyor (added 5/16/01) Serial #700182
                  M. EDL Shrink Wrapper System #2000 - 3071-00R

<CAPTION>
QUANTITY          DESCRIPTION                                                   UNIT PRICE            AMOUNT
<S>               <C>                                                           <C>                   <C>
1                 Complete Packaging Line for Aviva Tablets to Include the
                  Following Equipment:
                  A) Klockner Thermometer Model #1200
                  B) Scandia Cartoner Model #Ahm Serial #4558
</TABLE>

                                                                              12

<PAGE>

<TABLE>
<S>               <C>                                                           <C>                   <C>
                  C) Schroeder Case Packer Model  #2600
                  D) Revision (1) on Scandia Cartoner (3-26-01) @ $7,000
                  E) Revision (2) on Schroeder Case Packer (5-10-01) @ $14,200
                  F) Revision (3) on Schroeder Case Packer (6-27-01) @ $7,060.
</TABLE>

                                                                              13

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