Document:

EXHIBIT 10.104

 Exhibit 10.104 
  
  
  
 SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT 
 Between 
 STAR SCIENTIFIC, INC., 
 as Issuer, 
 And 
 The Investors Set Forth on Schedule I hereto 
 March 14, 2008

  
  
  

 This SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered
into effective as of March 14, 2008 between Star Scientific, Inc., a Delaware corporation (the “Company”), and the several investors set forth on Schedule I hereto (each an “Investor” and collectively,
the “Investors”). 
 WHEREAS, the Company and each Investor desire that Investor will purchase from the Company and the
Company will issue and sell to each Investor, upon the terms and conditions set forth in this Agreement: (a) the aggregate amount of shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), set
forth next to each Investor’s name on Schedule I hereto, for a per share purchase price of $1.51 per share (the “Shares”); and (b) a warrant substantially in the form attached hereto as Exhibit A (the
“Warrant”), to purchase the amount of shares of Common Stock set forth next to each Investor’s name on Schedule I hereto (the “Warrant Shares”), having an exercise price of $2.00 per Warrant Share (the
“Exercise Price”); and 
 WHEREAS, the Investors will have registration rights with respect to the Shares, Warrant Shares
and other Registrable Securities (as defined herein) pursuant to the terms of this Agreement. 
 NOW, THEREFORE, in consideration of the
foregoing premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 1. Agreement to Sell and Purchase the Shares and Warrant. At the Closing (as defined in Section 2), the Company will sell to each Investor,
and each Investor will purchase from the Company, upon the terms and subject to the conditions hereinafter set forth, the Shares and the Warrant for the aggregate purchase price set forth opposite each Investor’s name under the heading
“Aggregate Purchase Price” on Schedule I hereto. 
 2. Delivery of the Shares and Warrant at Closing. The
completion of the purchase, sale and issuance of the Shares and the Warrant (the “Closing”) shall occur on the date of this Agreement (the “Closing Date”) (or upon such other date as the Company and each Investor
shall agree), at the offices of the Company’s counsel. At the Closing, the Company shall issue to each Investor (a) one or more stock certificates, registered in the Investor’s name and address as set forth on Schedule I
hereto, representing the Shares and (b) the Warrant issued in the name of the Investor. The Company’s obligation to issue the Shares and the Warrant to each Investor shall be subject to the following conditions, any one or more of which
may be waived by the Company: (a) receipt by the Company of a wire transfer of immediately available funds to an account designated in writing by the Company, in the full amount of the total purchase price payable by each Investor for the
Shares and Warrant Shares that such Investor is hereby agreeing to purchase set forth opposite the name of such Investor under the heading “Aggregate Purchase Price” on Schedule I hereto; and (b) the accuracy, in all
material respects, of the representations and warranties made by each Investor and the fulfillment, in all material respects, of those undertakings of each Investor to be fulfilled prior to the Closing. Each Investor’s obligation to purchase
the Shares shall be subject to the following conditions, any one or more of which may be waived by an Investor (provided that no such waiver shall be deemed given unless in writing and executed by the Investors): (a) receipt by each Investor of
a counter-signed copy of this Agreement executed by the Company; (b) receipt by each Investor of a copy of the Warrant; and (c) the accuracy, in all material respects, of the representations and warranties made by the Company and the
fulfillment, in all material respects, of those undertakings of the Company to be fulfilled prior to the Closing. 
  

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 3. Representations, Warranties and Covenants of the Company. The Company hereby represents and
warrants to, and covenants with each Investor, as follows: 
 3.1 Organization. Each of the Company and its Subsidiaries (as defined in
Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”)) is duly organized and validly existing in good standing under the laws of the jurisdiction of its organization. Each of the Company and its
Subsidiaries has full power and authority to own, operate and occupy its properties and to conduct its business as presently conducted and is registered or qualified to do business and in good standing in each jurisdiction in which it owns or leases
property or transacts business and where the failure to be so qualified would have a material adverse effect upon the financial condition or business, operations, assets or prospects of the Company and its Subsidiaries, taken as a whole (a
“Material Adverse Effect”). 
 3.2 Due Authorization. The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement and the Warrant, and has taken all necessary corporate action to enter into and perform this Agreement, to issue the Shares in accordance with the terms of this Agreement, to enter into and
perform the Warrant, and to issue the Warrant Shares in accordance with the terms of the Warrant. This Agreement has been, and upon the Closing in accordance with the terms of the Agreement, the Warrant will be, duly authorized, validly executed and
delivered by the Company and constitutes, or will constitute, a legal, valid and binding agreement of the Company enforceable against the Company in accordance with their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Upon their issuance in accordance with the terms of this Agreement, the Shares will be duly authorized, validly issued, fully paid and non-assessable, the Warrant will be duly
authorized and validly issued and the Warrant Shares, upon exercise of the Warrant in accordance with its terms, will be duly authorized. 
 3.3 Non-Contravention. Except as would not reasonably be expected to have a Material Adverse Effect, the execution and delivery of this Agreement, the issuance and sale of the Shares and the Warrant under this Agreement, the
fulfillment of the terms of this Agreement and the consummation of the transactions contemplated hereby will not (A) conflict with or constitute a violation of, or default (with or without the giving of notice or the passage of time or both)
under, (i) any material bond, debenture, note or other evidence of indebtedness, or under any material lease, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any
Subsidiary is a party or by which it or any of its Subsidiaries or their respective properties are bound, (ii) the charter, by-laws or other organizational documents of the Company or any Subsidiary, or (iii) any law, administrative
regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary or their respective properties, or (B) result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the material properties or assets of the Company or any Subsidiary or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them is bound or to which any of the
property or assets of the Company or any Subsidiary is subject. No consent, approval, authorization or other order of, or registration, qualification or filing 

  

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with, any regulatory body, administrative agency, self-regulatory organization, stock exchange or market, or other governmental body in the United States is
required for the execution and delivery of this Agreement, the valid issuance and sale of the Shares and Warrant pursuant to this Agreement, other than such as have been made or obtained, and except for any securities filings required to be made
under federal or state securities laws. 
 3.4 SEC Filings. Since January 1, 2007, the Company and its Subsidiaries have filed
all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission (the “Commission”) pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the “1934 Act”) (collectively, the “SEC Documents”). 
 3.5 Absence of Certain Change.
Except as disclosed in the SEC Documents, since September 30, 2007, there has been no adverse change or adverse development in the business, properties, assets, operations, financial condition, prospects, liabilities or results of operations of
the Company or its Subsidiaries which to the knowledge of the Company would reasonably be expected to have a Material Adverse Effect. 
 3.6
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 135,000,000 shares of Common Stock, of which 81,487,715 shares are issued and outstanding and 12,754,213 shares are issuable and reserved
for issuance pursuant to the Company’s stock option plans or securities exercisable or exchangeable for, or convertible into, shares of Common Stock, and (ii) 100,000 shares of preferred stock, of which as of the date hereof no shares are
issued. All of such outstanding shares have been, or upon issuance will be, validly issued, fully paid and nonassessable. Except as disclosed in the SEC Documents, as of the date hereof, (i) no shares of the Company’s capital stock are
subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or
may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its Subsidiaries, (iii) there are no outstanding securities of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries, and (iv) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. The Company disclosed in its SEC Documents or has furnished to Investor true and correct copies of the Company’s Certificate of
Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the “By-laws”). 
  

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 4. Representations, Warranties and Covenants of Investor. Each Investor severally for itself, and
not jointly with the other Investors, represents and warrants to, and covenants with the Company, as follows: 
 4.1 Due Authorization.
Investor has all requisite power, authority and capacity to execute, deliver and perform his obligations under this Agreement, and has taken all necessary corporate, company, partnership or individual action as the case may be to enter and perform
this Agreement. This Agreement has been duly authorized and validly executed and delivered by Investor and constitutes a legal, valid and binding agreement of Investor enforceable against Investor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles
of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
 4.2 Non-Contravention. The
execution and delivery of this Agreement, the purchase of the Shares and the Warrant under this Agreement, the fulfillment of the terms of this Agreement and the consummation of the transactions contemplated hereby will not (A) conflict with or
constitute a violation of, or default (with or without the giving of notice or the passage of time or both) under, (i) any material bond, debenture, note or other evidence of indebtedness, or under any material lease, indenture, mortgage, deed
of trust, loan agreement, joint venture or other agreement or instrument to which Investor is a party, (ii) the charter, by-laws or other organizational documents of Investor, as applicable, or (iii) any law, administrative regulation,
ordinance or order of any court or governmental agency, arbitration panel or authority applicable to Investor or his property, or (B) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the material properties or assets of Investor or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or instrument to which Investor is a party or by which any of them is bound or to which any of the property or assets of Investor is subject. No consent, approval, authorization or
other order of, or registration, qualification or filing with, any regulatory body, administrative agency, self-regulatory organization, stock exchange or market, or other governmental body in the United States is required for the execution and
delivery of this Agreement and the purchase of the Shares and the Warrant by Investor, other than such as have been made or obtained. 
 4.3
Private Placement. Investor represents and warrants to, and covenants with, the Company that Investor is acquiring the Shares and the Warrant for its own account for investment only and with no present intention of distributing any of the
Shares, the Warrant or the Warrant Shares, or any arrangement or understanding with any other persons regarding the distribution of the Shares, Warrant or Warrant Shares. Investor has been advised and understands that neither the Shares, the Warrant
nor the Warrant Shares have been registered under the Securities Act or under the “blue sky” or similar laws of any jurisdiction and may be resold only if registered pursuant to the provisions of the Securities Act and such other laws, if
applicable, or, subject to the terms and conditions of this Agreement, if an exemption from registration is available. Investor has been advised and understands that the Company, in issuing the Shares and the Warrant, is relying upon, among other
things, the representations and warranties of Investor herein in concluding that such issuance is a “private offering” and is exempt from the registration provisions of the Securities Act. 
  

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 4.4 Certain Trading Activities. Neither Investor nor any of its affiliates has directly or
indirectly, nor has any person acting on behalf of or pursuant to any understanding with such Investor, engaged in any purchase or sale of Common Stock (including, without limitation, any Short Sales (as defined below) involving the Company’s
securities) since the date that such Investor first became aware of the transactions contemplated hereby. For the purposes of this Section, “Short Sales” include, without limitation, all “short sales” as defined in Rule 200
of Regulation SHO adopted under the 1934 Act and all types of direct and indirect stock pledges, forward sales contracts, options, puts, calls, short sales and other transaction through non-US broker-dealers or foreign regulated brokers having the
effect of hedging the securities of the Company or the investment contemplated under this Agreement. Such Investor covenants that neither it, nor any person acting on its behalf or pursuant to any understanding with it, will engage in any
transaction in the securities of the Company (including short sales) prior to the filing of a Current Report on Form 8-K, Annual Report on Form 10-K or press release reporting this transaction. 
 4.5 No Advice. Investor understands that nothing in this Agreement or any other materials presented to Investor in connection with the purchase
and sale of the Shares and the Warrant constitutes legal, tax or investment advice. Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of
the Shares and the Warrant. 
 4.6 Accredited Investor. Investor is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D under the Securities Act and is able to bear the risk of his investment in the Shares, Warrant, and Warrant Shares. Investor has such knowledge and experience in financial and business matters that it is capable of evaluating
the merits and risks of the purchase of the Shares, Warrant and Warrant Shares. 
 4.7 Limited Representations. Investor and its
advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and its Subsidiaries which have been requested and materials relating to the offer and sale of the Shares, Warrant, and Warrant
Shares, which have been requested by Investor. Investor and its advisors, if any, have been afforded the opportunity to ask such questions of the Company as they deem appropriate for purposes of the investment contemplated hereby. Investor
acknowledges that the most recent disclosure of the Company’s results is for the three and nine month periods ended on, and the most recent disclosure of the Company’s financial condition is at, September 30, 2007, as reported on the
Company’s quarterly report on Form 10-Q, and that no information more recent than such date has been provided to Investor as to the Company’s results, operations, financial condition, business or prospects. Investor understands that his
purchase of the Shares, Warrant and, if applicable, Warrant Shares involves a high degree of risk and that Investor may lose his entire investment in the Shares, the Warrant and if applicable the Warrant Shares, and that Investor can afford to do so
without material adverse consequences to its financial condition. Investor is not relying on any information provided by the Company and its Subsidiaries, except to the extent provided in Section 3 herein. 
 4.8 No Recommendation. Investor understands that no United States federal or state agency or any other government or governmental agency has
passed on or made any 

  

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recommendation or endorsement of the Shares, Warrant or Warrant Shares or the fairness or suitability of an investment in the Shares, Warrant or Warrant
Shares nor have such authorities passed upon or endorsed the merits thereof. 
 4.9 Restrictive Legend. The Company shall issue the
Warrant and certificates for the Shares and, if applicable, Warrant Shares to Investor with a legend as described in Section 6 below. Investor covenants that, in connection with any transfer of Shares or Warrant Shares pursuant to the
registration statements contemplated by Section 5 hereto, Investor will comply with the applicable prospectus delivery requirements of the Securities Act, provided that copies of a current prospectus relating to such effective registration
statements are or have been supplied to Investor. 
 4.10 Residence. Investor is a resident of the jurisdiction set forth next to
Investor’s name on Schedule I hereto. 
 4.11 No Market. Investor understands that the Shares are and, upon exercise of the
Warrant, the Warrant Shares will be restricted securities and that there is no public trading market for the Warrant, that none is expected to develop, and that the Shares, Warrant and Warrant Shares must be held indefinitely unless and until the
resale of such Shares, Warrant or Warrant Shares is registered under the Securities Act or subject to the terms and conditions of this Agreement, an exemption from registration is available. Investor has been advised or is aware of the provisions of
Rule 144 promulgated under the Securities Act. 
 4.12 No Commissions. Investor has taken no action which would give rise to any claim
by any person for brokerage commissions, finder’s fees or similar payments by the Company or Investor relating to this Agreement or the transactions contemplated hereby. 
 4.13 Transactional Exemption. Investor understands that the Shares, Warrant and Warrant Shares are being offered and sold in reliance on a
transactional exemption from the registration requirements of Federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of
Investor set forth herein in order to determine the applicability of such exemptions and the suitability of Investor to acquire the Shares, Warrant and Warrant Shares. 
 4.14. Investor Undertaking. Investor covenants that he will not sell, transfer, assign, hypothecate or pledge in any way any of the Shares or the Warrant Shares issued without a Securities Legend in accordance
with Section 6 hereof except for sales (A) in accordance with the terms of the “Plan of Distribution” section of the prospectus contained in the Registration Statements (as defined herein) and in compliance with prospectus
delivery requirements or (B) in accordance with the requirements of Rule 144 under the 1933 Act. Investor further agrees to indemnify the Company against any loss, cost or expense, including reasonable expenses, incurred as a result of such
legend removal on Investor’s behalf. 
 5. Registration Rights. 
 5.1 Certain Definitions 
 “Holder” and “Holders” shall include Investor and any transferee or transferees of Registrable Securities to whom the registration rights conferred by this Agreement and that certain 

  

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Securities Purchase and Registration Rights Agreement, dated March 13, 2008, by and among the Company and the investors party thereto (the
“3/13/08 Agreement”), have been transferred in compliance with this Agreement and the 3/13/08 Agreement. 
 The terms
“register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement. 
 “Registrable
Securities” shall mean: (i) the Shares and Warrant Shares issued or issuable to each Holder (a) with respect to the Warrant Shares, upon exercise of the Warrant, (b) upon any distribution with respect to, any exchange for or
any replacement of such Shares or Warrant, or (c) upon any conversion, exercise or exchange of any securities issued in connection with any such distribution, exchange or replacement; (ii) securities issued or issuable upon any stock
split, stock dividend, recapitalization or similar event with respect to the foregoing; and (iii) any other security issued as a dividend or other distribution with respect to, in exchange for or in replacement of the securities referred to in
the preceding clauses, except that any such Shares, Warrant Shares or other securities shall cease to be Registrable Securities when (x) they have been sold to the public or (y) they may be sold by the Holder thereof without restriction
pursuant to Rule 144. 
 “Registration Expenses” shall mean all expenses to be incurred by the Company in connection with
each Holder’s registration rights under this Agreement (such amount not to exceed $5,000 in the aggregate), including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company,
and blue sky fees and expenses, reasonable fees and disbursements of counsel to Holders (using a single counsel selected by a majority in interest of the Holders) for a review of the Registration Statements and related documents, and the expense of
any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company). 
 “Selling Expenses” shall mean all underwriting discounts, selling commissions and transfer taxes applicable to the sale of Registrable
Securities and all fees and disbursements of counsel for Holders not included within “Registration Expenses”. 
 5.2
Registration Requirements. The Company shall use its reasonable best efforts to effect the registration of the resale of the Registrable Securities (including, without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act) as would permit or facilitate the resale of all the Registrable
Securities in the manner (including manner of sale) and in all states reasonably requested by the Holder. Such reasonable best efforts by the Company shall include, without limitation, the following: 
 (a) The Company shall, as expeditiously as possible: 
 (i) But in any event within 60 days of the Closing, prepare and file a registration statement with the Commission pursuant to Rule 415 under the 

  

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Securities Act on Form S-3 under the Securities Act (or in the event that the Company is ineligible to use such form, such other form as the Company is
eligible to use under the Securities Act provided that such other form shall be converted into an S-3 promptly after Form S-3 becomes available to the Company) covering resales by the Holders as selling stockholders (not underwriters) of the sum of
(A) the Shares and (B) 5,685,066 of the Warrant Shares issuable upon full exercise of the Warrants (applied, in the case of the Warrant Shares, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares
held by each such Holder on a fully diluted basis) (the “Initial Registration Statement”). For the purposes of clarity, in determining the number of Warrant Shares to be included in the Initial Registration Statement by each Holder
on a pro rata basis, the Warrant Shares purchased by Holders pursuant to the 3/13/08 Agreement shall be included in the number of unregistered Warrant Shares held by Holders on a fully diluted basis. The Company shall use its reasonable best efforts
to cause such Initial Registration Statement and other filings to be declared effective as soon as possible, and in any event prior to 120 days (or, if the Commission elects to review the Registration Statement, 180 days) following the Closing.

 (ii) But in any event within 180 calendar days of the date the Initial Registration Statement is declared effective by the
Commission (the “Second Filing Date”), prepare and file a registration statement with the Commission pursuant to Rule 415 under the Securities Act on Form S-3 under the Securities Act (or in the event that the Company is ineligible
to use such form, such other form as the Company is eligible to use under the Securities Act provided that such other form shall be converted into an S-3 promptly after Form S-3 becomes available to the Company) covering resales by the Holders as
selling stockholders (not underwriters) of any remaining Registrable Securities (the “Subsequent Registration Statement” and together with the Initial Registration Statement, the “Registrations Statements”). The
Company shall use its reasonable best efforts to cause such Additional Registration Statement and other filings to be declared effective as soon as possible, and in any event prior to 120 days (or, if the Commission elects to review the Registration
Statement, 180 days) following the Second Filing Date. 
 (iii) Without limiting the foregoing, the Company will promptly
respond to all Commission comments, inquiries and requests, and shall request acceleration of effectiveness of the Registration Statements at the earliest possible date. The Company shall provide the Holders reasonable opportunity to review the
portions of any such Registration Statements or amendment or supplement thereto containing disclosure regarding the Holders prior to filing. 
 (iv) Prepare and file with the Commission such amendments and supplements to such Registration Statements and the prospectus used in connection with such Registration Statements as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered by such Registration Statements and notify the Holders of the filing and effectiveness of such Registration Statements and any amendments or supplements. 
  

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 (v) Furnish to each Holder such numbers of copies of a current prospectus conforming with
the requirements of the Act, copies of the Registration Statements, any amendment or supplement thereto and any documents incorporated by reference therein and such other documents as such Holder may reasonably require in order to facilitate the
disposition of Registrable Securities owned by such Holder. 
 (vi) Register and qualify the securities covered by such
Registration Statements under the securities or “blue sky” laws of all domestic jurisdictions, to the extent required; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states or jurisdictions. 
 (vii) Notify each Holder
immediately of the happening of any event (but not the substance or details of any such events unless specifically requested by a Holder) as a result of which the prospectus (including any supplements thereto or thereof) included in such
Registration Statements, as then in effect, includes an untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then
existing, and use its reasonable best efforts to promptly update and/or correct such prospectus. 
 (viii) Notify each Holder
immediately of the issuance by the Commission or any state securities commission or agency of any stop order suspending the effectiveness of the Registration Statement or the threat or initiation of any proceedings for that purpose. The Company
shall use its reasonable best efforts to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible time. 
 (ix) Permit counsel to the Holders to review the Registration Statements and all amendments and supplements thereto within a reasonable
period of time (but not less than two (2) full days on which there is trading on the NASDAQ Global Market or such other market or exchange on which the Common Stock is then principally traded) prior to each filing and will not request
acceleration of the Registration Statements without prior notice to such counsel. 
 (x) List the Registrable Securities
covered by such Registration Statements on the principal securities exchange and/or market on which the Common Stock is then listed and prepare and file any required filings with such principal market or exchange. 
 (b) In the event that either of the Registration Statements have become effective and, afterwards, any Holder’s ability to sell Registrable
Securities registered for resale under either of the Registration Statements is suspended for more than (i) 45 days in any 90-day period or (ii) 90 days in any calendar year, including without limitation by reason of any suspension or stop
order with respect to either of the Registration Statements or the fact that an event has occurred as a result of which the prospectus (including any supplements thereto) included in either of the Registration Statements then in effect includes an
untrue statement of material fact or omits to state a material 

  

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fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, then the Company
shall take such action as may be necessary to amend or supplement the Initial Registration Statement or the Subsequent Registration Statement, as the case may be, or the prospectus (including any supplements thereto) included in either of the
Registration Statements, such that Initial Registration Statement or the Subsequent Registration Statement, as the case may be, or the prospectus, as so amended, shall not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements not misleading. 
 (c) If the Holder(s) intend to distribute the
Registrable Securities by means of an underwriting, the Holder(s) shall so advise the Company. Any such underwriting may only be administered by nationally or regionally recognized investment bankers reasonably satisfactory to the Company.

 (d) The Company shall enter into such customary agreements (including an underwriting agreement containing such representations and
warranties by the Company and such other terms and provisions, as are customarily contained in underwriting agreements for comparable offerings and are reasonably satisfactory to the Company) and take all such other actions as the Holder or the
underwriters participating in such offering and sale may reasonably request in order to expedite or facilitate such offering and sale other than such actions which are disruptive to the Company or require significant management availability.

 (e) The Company shall make available for inspection by the Holders, representative(s) of all the Holders together, any underwriter
participating in any disposition pursuant to either of the Registration Statements, and any attorney or accountant retained by any Holder or underwriter, all financial and other records customary for purposes of the Holders’ due diligence
examination of the Company and review of either of the Registration Statements, all documents filed with the Commission subsequent to the Closing, pertinent corporate documents and properties of the Company, and cause the Company’s officers,
directors and employees to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with either of the Registration Statements, provided that such parties agree to keep such
information confidential. Notwithstanding the foregoing, the foregoing right shall not extend to any Holder (i) who is not a financial investor or entity or (ii) who, itself or through any affiliate, has any strategic business interest
that would reasonably be expected to be in conflict with any business of the Company or its Subsidiaries. 
 (f) The Company may suspend the
use of any prospectus used in connection with either of the Registration Statements only in the event, and for such period of time as, (i) such a suspension is required by the rules and regulations of the Commission or (ii) it is
determined in good faith by the Board of Directors of the Company that because of valid business reasons (not including the avoidance of the Company’s obligations hereunder), it is in the best interests of the Company to suspend such use, and
prior to suspending such use in accordance with this clause (ii) the Company provides the Holders with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension. The Company will use
reasonable best efforts to cause such suspension to terminate at the earliest possible date. 
 (g) The Company shall prepare and file with
the Commission such amendments (including post-effective amendments) and supplements to either of the Registration Statements and 

  

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the prospectus used in connection with either of the Registration Statements, which prospectus is to be filed pursuant to Rule 424 promulgated under the
Securities Act, as may be necessary to keep either of the Registration Statements effective at all times during the Registration Period (as defined below), and, during such period, comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by either of the Registration Statements. In the case of amendments and supplements to either of the Registration Statements which are required to be filed pursuant to this Agreement
(including pursuant to this Section 5(g)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the 1934 Act, the Company shall have incorporated such report by reference into either of the
Registration Statements, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement the Initial
Registration Statement or the Subsequent Registration Statement, as applicable. 
 (h) Each Holder agrees by its acquisition of the
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 5.2(a)(vii) or 5.2(a)(viii), and upon notice of any suspension under Section 5.2(f), such Holder will
forthwith discontinue disposition of such Registrable Securities under the Initial Registration Statement or the Subsequent Registration Statement, as applicable, until such Holder’s receipt of the copies of the supplemented prospectus and/or
amendment to the Initial Registration Statement or the Subsequent Registration Statement, as applicable, contemplated by this Section 5.2, or until it is advised in writing by the Company that the use of the applicable prospectus may be
resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus or the Initial Registration Statement or the Subsequent Registration
Statement, as applicable. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. 
 (i) If requested by
a Holder, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as a Holder reasonably requests to be included therein relating to the sale and distribution of
Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities
to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) as soon as practicable, supplement or make amendments to either of the Registration Statements if reasonably requested by a Holder holding any Registrable Securities. 
 5.3 Expenses of Registration. All Registration Expenses in connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling Expenses of a Holder shall be borne by such Holder. 
 5.4
Registration on Form S-3. The Company shall use its reasonable best efforts to remain qualified for registration on Form S-3 or any comparable or successor form or forms, or in the event that the Company is ineligible to use such form, such
form as the Company is eligible to use under the Securities Act, provided that if such other form is used, the Company shall convert such other form to a Form S-3 promptly after the Company becomes so eligible, provided that the Company shall
maintain the effectiveness of the Registration Statement then in effect until such time as either of the Registration Statements or Form S-3 covering the Registrable Securities has been declared effective by the Commission. 
  

 11 

 5.5 Registration Period. In the case of the registration effected by the Company pursuant to this
Agreement, the Company shall keep such registration effective from the date on which the either of the Registration Statements initially became effective until the earlier of (a) the date on which all the Holders have completed the sales or
distribution described in either of the Registration Statements relating to the Registrable Securities registered for resale thereunder or, (b) until such Registrable Securities may be sold by the Holders without restriction pursuant to Rule
144 (or any successor thereto) (provided that the Company’s transfer agent has accepted an instruction from the Company to such effect) (the “Registration Period”). Thereafter, the Company shall be entitled to withdraw such
Registration Statement and the Holders shall have no further right to offer or sell any of the Registrable Securities registered for resale thereon pursuant to the respective Registration Statement (or any prospectus relating thereto). 

5.6 Indemnification. 
 (a)
Company Indemnity. The Company will indemnify and hold harmless each Holder, each of its officers, directors, agents and partners, and each person controlling each of the foregoing, within the meaning of Section 15 of the Securities Act
and the rules and regulations thereunder with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each person who controls, within the meaning of Section 15
of the Securities Act and the rules and regulations thereunder, any underwriter, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made, or any violation by the Company of the Securities
Act or any state securities law or in either case, any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will
reimburse each Holder, each of its officers, directors, agents and partners, and each person controlling each of the foregoing, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to a Holder to the extent that any such claim, loss, damage, liability or
expense arises out of or is based (i) on any untrue statement or omission based upon written information furnished to the Company by a Holder or the underwriter (if any) therefore, (ii) the failure of a Holder to deliver at or prior to the
written confirmation of sale, the most recent prospectus, as amended or supplemented or (iii) the failure of a Holder otherwise to comply with this Agreement. The indemnity agreement contained in this Section 5.6(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent will not be unreasonably withheld). 
 (b) Holder Indemnity. Each Holder will, severally and not jointly, if Registrable Securities held by it are included in the securities as to which
such registration, qualification or 

  

 12 

 
compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers, agents and partners, and each underwriter, if any, of
the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act and the rules and regulations thereunder, each other Holder
(if any), and each of their officers, directors and partners, and each person controlling such other Holder(s) against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or
necessary to make a statement therein not misleading in light of the circumstances under which they were made, and will reimburse the Company and such other Holder(s) and their directors, officers and partners, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be
specifically for use therein, and provided that the maximum amount for which such Holder shall be liable under this indemnity shall not exceed the net proceeds received by such Holder from the sale of the Registrable Securities pursuant to the
registration statement in question. The indemnity agreement contained in this Section 5.6(b) shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities if such settlement is effected without the consent of
such Holder (which consent shall not be unreasonably withheld). 
 (c) Procedure. Each party entitled to indemnification under this
Section 5.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim in any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or
any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at its own expense, and provided further that the failure
of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 5.6 except to the extent that the Indemnifying Party is materially and adversely affected by such failure
to provide notice. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such non-privileged information regarding
itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom. 
 5.7 Contribution. If the indemnification provided for in Section 5.6 herein is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein (other than by reason of the exceptions provided therein), then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or liabilities as between the Company 

  

 13 

 
on the one hand and any Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of such Holder in
connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of any Holder on the other shall
be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by such Holder.

 In no event shall the obligation of any Indemnifying Party to contribute under this Section 5.7 exceed the amount that such
Indemnifying Party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 5.6(a) or 5.6(b) hereof had been available under the circumstances. 
 The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5.7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraphs.
The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraphs shall be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this section, no Holder or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any Holder, the net proceeds received by such Holder from the sale of Registrable Securities pursuant to the registration statement in question or (ii) in the case of an underwriter, the
total price at which the Registrable Securities purchased by it and distributed to the public were offered to the public exceeds, in any such case, the amount of any damages that such Holder or underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. 
 5.8 Survival. The indemnity and contribution agreements contained in
Sections 5.6 and 5.7 and the representations and warranties of the Company referred to in Section 5.2(d) shall remain operative and in full force and effect regardless of (i) any termination of this Agreement or any underwriting agreement,
(ii) any investigation made by or on behalf of any Indemnified Party or by or on behalf of the Company, and (iii) the consummation of the sale or successive resales of the Registrable Securities. 
 5.9 Information by Holders. Each Holder shall promptly furnish to the Company such information regarding such Holder and the distribution and/or
sale proposed by such Holder as the Company may from time to time reasonably request in writing in connection with any registration, qualification or compliance referred to in this Agreement, and the Company may exclude from such registration the
Registrable Securities of any Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. The intended method or methods of disposition and/or sale of such securities as so provided by such
purchaser shall be included without alteration in the Registration Statements covering the Registrable Securities and shall not be changed without written consent of such Holder. Each Holder agrees that, other than ordinary 

  

 14 

 
course brokerage arrangements, in the event it enters into any arrangement with a broker dealer for the sale of any Registrable Securities through a block
trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, such Holder shall promptly deliver to the Company in writing all applicable information required in order for the Company to be able to
timely file a supplement to the Prospectus pursuant to Rule 424(b), or take any other action, under the Securities Act, to the extent that such supplement or other action is legally required. Such information shall include a description of
(i) the name of such Holder and of the participating broker dealer(s), (ii) the number of Registrable Securities involved, (iii) the price at which such Registrable Securities were or are to be sold, and (iv) the commissions paid
or to be paid or discounts or concessions allowed or to be allowed to such broker dealer(s), where applicable. 
 6. Stock Legend.

 6.1 Upon payment therefor as provided in this Agreement, the Company will issue the Shares and the Warrant in the name of each Investor.
Any certificate representing Shares or Warrant Shares shall be stamped or otherwise imprinted with a legend in substantially the following form: 
 NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AFTER RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT. 
 Additionally, any certificate representing the Warrant Shares
shall also be stamped or otherwise imprinted with a legend in substantially the following form: 
 THESE SECURITIES REPRESENTED HEREBY ARE
ALSO SUBJECT TO RIGHTS AND OBLIGATIONS AS SET FORTH IN A SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT DATED AS OF MARCH 13, 2008 BY AND AMONG STAR SCIENTIFIC, INC. AND THE SEVERAL INVESTORS PARTY THERETO AS SUCH MAY BE AMENDED FROM TIME TO
TIME. 
 The Warrant shall be imprinted with the legends set forth in the Warrant on Exhibit A hereto. 
 The Company agrees to issue the Shares or Warrant Shares, issued upon exercise of the Warrant, without the legend set forth above at such time as the
holder thereof is (i) permitted to dispose of such Shares or Warrant Shares without restriction pursuant to Rule 144 under the Securities Act, and upon such disposal, or (ii) such securities have been registered for resale under the 1933
Act, subject to the undertaking in Section 4.14 hereof by the Investor. 
 7. Survival of Representations, Warranties and
Agreements. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company and Investor herein shall survive the execution of this Agreement, the delivery to
Investor of the Shares and the Warrant being purchased and the payment therefor. 
  

 15 

 8. Notices. All notices, requests, consents and other communications hereunder shall be in
writing, shall be mailed (A) if within domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile, or (B) if delivered from outside the United
States, by International Federal Express or facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed, and (iv) if delivered by facsimile, upon electric confirmation of receipt and shall be delivered
as addressed as follows: 
 (a) if to the Company, to: 
 Star Scientific, Inc. 
 16 South Market Street 
 Petersburg, Virginia 23803 
 Telephone:
(804) 530-0535 
 Facsimile: (804) 530-8474 
 Attention: Chief Financial Officer 
 with copies to: 
 Star Scientific, Inc. 
 7475 Wisconsin Ave.

 Suite 850 
 Bethesda, MD
20814 
 Attn: Robert E. Pokusa 
 General Counsel 
 Phone: (301) 654-8300 
 Telecopy: (301) 654-9308; 
 and 
 Latham & Watkins LLP 
 555 Eleventh
Street, N.W. 
 Suite 1000 
 Washington, DC 20004 
 Attn: William P. O’Neill 
 Phone: (202) 637-2200 
 Telecopy: (202) 637-2201 
 (b) if to Investor, at his address on the signature page hereto, or at such other address or addresses as may have been furnished to the Company in
writing. 
 9. Changes. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the
Company and Investor. 
  

 16 

 10. Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this Agreement. 
 11. Severability. In case any provision
contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 
 12. Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without
giving effect to the principles of conflicts of law. 
 13. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to such subject matter are expressly cancelled. 
 14. Finders Fees. Neither the Company nor Investor nor any affiliate thereof has incurred any obligation which will result in the obligation of the other party to pay any finder’s fee or commission in
connection with this transaction. 
 15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 
 16. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the
Company and Investor. Investor shall not assign any rights or obligations under this Agreement other than, solely with respect to any Shares or Warrant Shares transferred in accordance with this Agreement, including the legends described herein, to
any permitted transferee of such Shares or Warrant, provided, however, that no such assignment shall relieve Investor of its obligations under this Agreement. 
 17. Expenses. Each of the Company and Investor shall bear its own expenses in connection with the preparation and negotiation of the Agreement.

 18. Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under this Agreement are several
and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement. Nothing contained herein, and no action taken by any
Investor pursuant hereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by this Agreement and the Company acknowledges that the Investors are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this
Agreement. Each Investor confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. 
  

 17 

 19. Public Statements or Releases. The Company shall by 8:30 a.m. New York time on the business
day following the Closing Date, issue a press release or file a Current Report on Form 8-K disclosing the transactions contemplated hereby. 
 [Signature pages follow.] 
  

 18 

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

			
	STAR SCIENTIFIC, INC.
		
	By:	 	 /S/  PAUL L. PERITO

	Name:	 	Paul L. Perito
	Title:	 	Chairman, President and
		 	Chief Operating Officer

 Signature Page to Securities Purchase and Registration Rights Agreement 

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

			
	IROQUOIS MASTER FUND LTD
		
	By:	 	 /s/ Joshua Silverman

	Name:	 	Joshua Silverman
	Title:	 	Authorized Signatory

 Signature Page to Securities Purchase and Registration Rights Agreement 
  

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

			
	HIGHBRIDGE INTERNATIONAL LLC
		
	By:	 	Highbridge Capital Management, LLC
	Its:	 	Trading Manager
		
	By:	 	 /s/ Adam J. Chill

	Name:	 	Adam J. Chill
	Title:	 	Managing Director

 Signature Page to Securities Purchase and Registration Rights Agreement 

 SCHEDULE I 
 SCHEDULE OF INVESTORS 
  

								
	 Name and Address
	  	Number of Shares to
be Purchased	  	Warrants	  	Aggregate Purchase
Price
	 Iroquois Master Fund Ltd
	  	2,649,007	  	2,649,007	  	$	4,000,000.57
	 Highbridge International LLC
	  	662,252	  	662,252	  	$	1,000,000.52

 EXHIBIT A 
 NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AFTER RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT . 
 COMMON STOCK PURCHASE WARRANT 
 To purchase common stock shares of common stock, $0.0001 par value, of 
 Star Scientific, Inc. 
 THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received,                      (the “Holder”), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after September 15, 2008 (the “Initial Exercise Date”) and on or prior to the close of business on September 15, 2013 (the “Termination
Date”) but not thereafter (the “Exercise Period”), to subscribe for and purchase from Star Scientific, Inc., a Delaware corporation (the “Company”), up to
             shares (the “Warrant Shares”) of common stock, par value $0.0001 per share, of the Company (the “Common Stock”). The purchase price of
one share of Common Stock (the “Exercise Price”) under this Warrant shall be $2.00, subject to adjustment hereunder. The Exercise Price and the number of Warrant Shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. The term “Holder” shall refer to the Holder identified above or any subsequent transferee of this Warrant. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the
Securities Purchase and Registration Rights Agreement, dated March 14, 2008, between the Company and Holder (the “Purchase Agreement”). 
 1. Authorization of Warrant Shares. The Company represents and warrants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable. 
 2. Exercise of
Warrant. 
 (a) Except as provided in Section 3 herein, exercise of the purchase rights represented by this Warrant may be made at
any time or times on or after the Initial Exercise Date and before or on the Termination Date by (i) surrendering this Warrant, with the Notice of Exercise Form annexed hereto completed and duly executed, to the offices of the Company (or such
other office or agency (including the transfer agent, if applicable) of the Company as it may designate by notice in writing to the registered 

  

 1 

 
Holder at the address of such Holder appearing on the books of the Company) and (ii) delivering payment of the Exercise Price of the shares thereby
purchased by wire transfer of immediately available funds or cashier’s check drawn on a United States bank. The Holder exercising his purchase rights in accordance with the preceding sentence shall be entitled to receive a certificate for the
number of Warrant Shares so purchased, which certificate will bear a legend substantially similar to the legend set forth on this Warrant. Certificates for shares purchased hereunder shall be issued and delivered to the Holder within five (5)
Trading Days (as defined below) after the date on which this Warrant shall have been exercised as aforesaid. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder
shall be deemed to no longer hold this Warrant with respect to such shares and to have become a holder of record of such shares for all purposes, in each case as of the date the Warrant has been exercised by payment to the Company of the Exercise
Price and all taxes required to be paid by the Holder, if any, pursuant to Section 4 prior to the issuance of such shares, have been paid. 
 (b) In the event that the Warrant is not exercised in full, the number of Warrant Shares shall be reduced by the number of such Warrant Shares for which this Warrant is exercised and/or surrendered, and the Company, if requested by Holder
and at his expense, shall within ten (10) Trading Days issue and deliver to the Holder a new Warrant of like tenor in the name of the Holder or as the Holder (upon payment by Holder of any applicable transfer taxes) may request, reflecting such
adjusted Warrant Shares. 
 “Trading Day” shall mean a day on which there is trading on the Principal Market or such
other market or exchange on which the Common Stock is then principally traded. 
 3. No Fractional Shares or Scrip. No fractional
shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 
 4. Charges, Taxes and
Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the Holder; provided, however, that the Holder shall pay any applicable transfer taxes. 
 5. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 
  

 2 

 6. Division and Combination. 
 (a) This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written
notice specifying the denominations in which new Warrants are to be issued, signed by the Holder or his agent or attorney. The Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice 
 (b) The Company shall prepare, issue and deliver at its own expense (other than transfer taxes)
the new Warrant or Warrants under this Section 6. 
 7. No Rights as Stockholder until Exercise. This Warrant does not entitle
the Holder to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be deemed
to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment and this Warrant shall no longer be issuable with respect to such Warrant Shares. 
 8. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 
 9. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday. 
 10. Adjustments of Exercise Price and Number of Warrant Shares. The number and kind of securities purchasable upon the exercise of this Warrant
and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following. In case the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or
(iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the Company which he would have owned or have been entitled to receive had such Warrant been exercised in advance thereof. Upon each such adjustment of the kind and number of
Warrant Shares or other securities of the Company which are purchasable hereunder, the Holder shall thereafter be entitled to purchase the number of 

  

 3 

 
Warrant Shares or other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Company
purchasable pursuant hereto as a result of such adjustment. An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. 

11. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. If, at any time while this Warrant is outstanding
(i) the Company effects any merger or consolidation of the Company with or into another individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company or
other entity of any kind (each a “Person”), in which the Company is not the survivor and the stockholders of the Company immediately prior to such merger or consolidation do not own, directly or indirectly, at least fifty percent
(50%) of the voting securities of the surviving entity, (ii) the Company effects any sale of all or substantially all of its assets or a majority of its Common Stock is acquired by a third party, in each case, in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or
property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 10 above) (in any such case, a “Fundamental Transaction”), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant without regard to any limitations on exercise contained herein (the “Alternate Consideration”). The Company shall not effect
any such Fundamental Transaction unless prior to or simultaneously with the consummation thereof, any successor to the Company, surviving entity or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or
entity shall assume the obligation to deliver to the Holder, such Alternate Consideration as, in accordance with the foregoing provisions, the Holder may be entitled to purchase and/or receive (as the case may be), and the other obligations under
this Warrant. The foregoing provisions of this Section 11 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations, spin-offs, or dispositions of assets. 
 12. Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company shall give notice thereof to the Holder, which notice shall state the number of Warrant Shares (and other securities or property) purchasable upon the exercise of this
Warrant and the 

  

 4 

 
Exercise Price of such Warrant Shares (and other securities or property) after such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made. 
 13. Notice of Corporate Action. If at any time:

 (a) the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, or 
 (b) there shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation, or 
 (c) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; 
 then, in any one or more of such cases, the Company shall give to Holder (i) at least five Business Days’ prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and
(ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least five Business Days’ prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall
be entitled to any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or
winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their Warrant Shares for securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently given if addressed to Holder at the last address of Holder appearing on the books of the Company and delivered in accordance with Section 16(d). 
 14. Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any applicable law or regulation. 
  

 5 

 Except and to the extent as waived or consented to by the Holder, the Company shall not by any action,
including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder
as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to
such increase in par value and (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant. 
 15. Call. At any time and from time to time following the Effective Date of the Registration Statement, the Company shall have the right, upon 20
Business Days’ prior written notice to the Holder (“Call Notice”), to call (require Holder to exercise) all or any portion of this Warrant at the Exercise Price provided that (i) the Warrant Shares are registered for
resale pursuant to the Securities Act and have been for at least the 20-Trading Day period preceding the Call Notice, (ii) the Prospectus has not been suspended at any time during the 20-Trading Day period preceding the Call Notice,
(iii) the Common Stock is currently listed (and is not suspended from trading) on the Principal Market as of the date the Call Notice is delivered to the Holder through the effective date of such call, (iv) the Company is not in default
(or taken any action or failure to act which through the passage of time would result in a default) under the Purchase Agreement, (v) exercise of the Warrant in whole will not cause the Holder to exceed the Section 3(c) limitations,
(vi) the VWAP of the Common Stock on the Principal Market is equal to or greater than $6.00 (subject to adjustment to reflect forward or reverse stock splits, stock dividends, recapitalizations and the like) (the “Threshold
Price”) for at least 20 consecutive Trading Days, and (vii) the Call Notice is delivered within 3 Business Days’ of the most recent day in the previous clause and that the Common Stock reached the Threshold Price. At any time
prior to the effective date of such call, the Holder shall have the right to exercise this Warrant in accordance with its terms. 
 “VWAP” shall mean for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on an the Principal Market or the New York
Stock Exchange, the American Stock Exchange or the Nasdaq Small Cap Market (each an “Approved Market”), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the primary
Approved Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. ET to 4:02 p.m. Eastern Time) using the HP function; (b) if the Common Stock is not then listed or
quoted on an Approved Market and if prices for the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the
Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by the National 

  

 6 

 
Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of
the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by the Company and Holder in good faith. 
 “Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the City of New York are authorized or required by law or executive order to
remain closed. 
 16. Miscellaneous. 
 (a) Jurisdiction. This Warrant shall constitute a contract under the laws of the State of New York, without regard to its conflict of law, principles or rules. 
 (b) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant will have restrictions upon resale
imposed by state and federal securities laws and/or as set forth in the Purchase Agreement. 
 (c) Nonwaiver and Expenses. No course
of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, provided, however, that all rights hereunder terminate
on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of his rights, powers or
remedies hereunder. 
 (d) Notices. All notices, requests, consents and other communications provided for herein shall be in writing
and shall be effective upon delivery in person, when faxed and received, or five Business Days after being mailed by certified or registered mail, return receipt requested, postage pre-paid, addressed as follows: 
  

	 	(i)	If to the Holder: 

 [Name] 
 [Address] 
 Telephone: 
 Fax: 
 Attention: 
 or to the address of the Holder as shown on the books of the Company; or 
  

	 	(ii)	If to the Company: 

 Star Scientific, Inc. 
 16 South Market Street 
 Petersburg,
Virginia 23803 
 Telephone: (804) 530-0535 
 Facsimile: (804) 530-8474 
 Attention: Chief Financial Officer 
  

 7 

 with a copy to: 
 Star Scientific, Inc. 
 7475 Wisconsin Avenue 
 Suite 850 
 Bethesda, MD 20814 

Telephone: (301) 654-8300 
 Facsimile: (301) 654-9308 
 Attention: General Counsel 
 or at such other address as the Holder or the Company, as applicable, may hereafter have advised the other in accordance with the provisions of this paragraph. 
 (e) Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company. 
 (f) Successors and Assigns; No Assignment. This Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company, provided that neither the Company (except pursuant to a transaction subject to Section 11 herein) nor the Holder may assign this Warrant without
the prior written consent of the other party. 
 (g) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder. 
 (h) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. 
 (i) Headings. The
headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. 
  

 8 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized.

 Dated: March 14, 2008 
  

			
	STAR SCIENTIFIC, INC.
		
	By:	 	  

	Name:	 	Paul L. Perito
	Title:	 	Chairman, President and Chief Operating Officer

 Signature Page to Warrant 

 NOTICE OF EXERCISE 
  

	To:	Star Scientific, Inc. 

 (1) The undersigned hereby elects
to purchase              Warrant Shares of Star Scientific, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any. 
 (2) Payment shall take the form of in lawful money of the United States. 
 (3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned. The Warrant Shares shall be delivered to
the following: 

					
		 	  
	 	
		 	  
	 	
		 	  
	 	

 (4) Accredited Investor/Qualified Institutional Buyer. The undersigned is an “accredited
investor” as defined in Regulation D under the Securities Act of 1933, as amended. 
  

			
	[PURCHASER]
		
	By:	 	  

	Name:	 	
	Title:	 	
	Dated:Exhibit 10.4

 Exhibit 10.4 
 EXECUTIVE EMPLOYMENT AGREEMENT 
 THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is
effective as of April 26, 2007 by and between Primus Telecommunications Group, Incorporated (“Company”) and K. Paul Singh (“Executive”). 
 WHEREAS, Executive desires to serve as the Chairman and Chief Executive Officer of the Company and in exchange for the protection and other consideration set forth in this Agreement, is willing to give the Company,
under certain circumstances, his covenant not to compete, and the Company desires to so employ Executive. 
 NOW, THEREFORE, in consideration
of the promises and the mutual agreements contained herein, the Company and Executive hereby agree as follows: 
 ARTICLE I 

Definitions 
  

	1.1	Definitions. As used herein, the following terms shall have the following meanings. 

  

	(a)	“Board” means the board of directors of the Company. 

  

	(b)	“Cause” means engaging by Executive in intentional fraud or material intentional breach of Company’s ethics guidelines, as may be established by the Company from time
to time. 

  

	(c)	“Change of Control” means (a) a sale of more than 50% of the outstanding capital stock of the Company in a single or related series of transactions, (b) the
merger or consolidation of the Company with or into any other corporation or entity, other than a wholly-owned subsidiary of the Company, where the Company is not the surviving entity, or (c) a sale of all or substantially all of the assets of
the Company to an unrelated entity. 

  

	(d)	“Confidential Information” as used in Sections 2.5, 2.6 and 2.7 of this Agreement, shall mean all technical and business information of the Company, or which is learned or
acquired by the Company from others with whom the Company has a business relationship in which, and as a result of which, similar information is revealed to the Company, whether patentable or not, which is of a confidential, trade secret and/or
proprietary character and which is either developed by Executive (alone or with others) or to which Executive shall have had access during his employment. Confidential Information shall include (among other things) all confidential data, designs,
plans, notes, memoranda, work sheets, formulas, processes, and Customer and supplier lists. 

  

	(e)	“Customer” means any Person or entity to whom the Company has sold any products or services (i) in the case of on-going employment, during the twenty-four
(24) calendar months immediately preceding any dispute under Section 2.6 of this Agreement, and, (ii) in the case of the employment having ended, the twenty-four (24) calendar months preceding Executive’s termination of
employment. 

  

	(f)	“Disability” means a disability of the Executive as determined in accordance with the disability insurance policy described in Section 2.3(b) hereof, as maintained
from time to time, which entitles the Executive or his beneficiary, as applicable, to payment on account of disability under such policy. 

  

	(g)	“Good Reason” when used with reference to a voluntary termination by the Executive from his employment with Company, shall mean (i) a reduction in the
Executive’s base salary as in effect on the date hereof, or as the same may be increased from time to time, during the Employment Period; or (ii) a material reduction in Executive’s status, position, responsibilities or duties during
the Employment Period. If the Executive voluntarily terminates his employment for Good Reason, the Executive shall notify the Company in writing if he believes the termination is for Good Reason. Executive shall set forth in reasonable detail why
Executive believes Good Reason exists. 

  

	(h)	“Person” means an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political subdivision thereof. 

	(i)	“Potential Customer” shall mean any Person or entity who, during the applicable twenty-four (24) month period described above in Section 1.1(e) of this
Agreement, has (i) been involved in discussions or negotiations with the Company for products sold by the Company; (ii) initiated contact with the Company in order to obtain information regarding products sold by the Company;
(iii) been the subject of repeated personal contacts by Executive and/or any other Company employee for purposes of soliciting business for the Company; or (iv) been the subject of the Company’s efforts to gather, learn or evaluate
information which may help the Company obtain any future order from such Person or entity. 

 ARTICLE II 
 Employment 
  

	2.1	Employment. Company agrees to employ Executive and Executive hereby accepts such employment with the Company, upon the terms and conditions set forth in this
Agreement, for the period beginning on April 26, 2007 (“Start Date”) and ending as provided in Section 2.4 of this Agreement (the “Employment Period”). 

  

	2.2	Position and Duties. 

  

	(a)	Commencing on the Start Date and continuing during the Employment Period, Executive shall serve as Chairman and Chief Executive Officer of the Company. As Chairman and Chief
Executive Officer, Executive, subject to the control of the Board, shall have general supervision and control over the business, property and affairs of the Company and perform such duties as may be assigned to him by the Board.

  

	(b)	Executive shall devote his best efforts and his full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the
business and affairs of the Company. The Executive shall perform his duties and responsibilities to the best of his abilities in a diligent, trustworthy, businesslike and efficient manner. In the performance of his duties hereunder, Executive shall
at all times report and be subject to the lawful direction of the Board and perform his duties hereunder subject to and in accordance with the resolutions or any other determinations of the Board and the certificate of incorporation and by-laws of
the Company and applicable law. During the Employment Period, Executive shall not become an employee or provide consulting or advisory services for the financial or non-financial benefit of any Person or entity other than the Company.

  

	2.3	Base Salary, Bonus and Benefits. 

  

	(a)	Subject to the terms of this Agreement, in consideration of Executive’s agreements contained herein, for the period beginning on the Start Date, Executive’s base salary
shall be $700,000.00 per annum (“Base Salary”), which shall be payable in accordance with the Company’s regular payroll cycle during the year and shall be subject to deductions for customary withholdings, including, without
limitation, federal and state withholding taxes and social security taxes. Executive shall be entitled to the opportunity to earn annual performance bonuses (with a target cash bonus of up to $800,000.00) in accordance with the Board-approved bonus
program and annual performance targets. Executive shall be entitled, during the Employment Period, to participate in all retirement, disability, pension, savings, health, medical, dental, insurance and other fringe benefits or plans of the Company,
if any, generally available to employees. 

  

	(b)	During the Employment Period, the Company will reimburse the Executive for up to Ten Thousand Dollars ($10,000) in out-of-pocket medical expenses and financial planning services per
year. In addition, during the Employment Period, the Company shall pay the premiums on a disability insurance policy to pay two-thirds of the Executive’s Base Salary in the event of disability, subject to all terms and conditions of the policy,
such policy to be obtained by Executive for his benefit or the benefit of such other beneficiary as he shall name therein. 

  

	(c)	During the Employment Period, the Executive will participate in any long-term executive incentive compensation plan at a level consistent with his position and industry practice
(including any stock option, restricted stock and stock bonus plans) approved by the Board for senior management of the Company. 

  

	2.4	Term. 

  

	(a)	General Term. This Agreement shall commence on April 26, 2007 and shall continue from year to year thereafter, unless terminated by either party by written notice of
termination given to the other party at least six months in advance of such termination or unless otherwise sooner terminated hereunder. 

  

	(b)	 Termination for Cause or Voluntary Termination. If the Executive is terminated by the Company for Cause or if the Executive voluntarily terminates his
employment in any manner (other than for Good Reason) prior to the end of the Employment Period, the Executive shall be entitled only to his Base Salary through the date of termination, but shall 

	 	 
not be entitled to any further Base Salary or any applicable bonus or benefits for that year or any future year, except as may be provided in an applicable
benefit plan or program, or to any severance compensation of any kind, nature or amount. 

  

	(c)	Termination Without Cause or for Good Reason. 

  

	 	(i)	Before a Change of Control. If the Executive is involuntarily terminated by the Company prior to the end of the Employment Period without Cause (other than on account of
death or Disability) before a Change in Control, or if the Executive is determined to have terminated for Good Reason prior to the end of the Employment Period before a Change in Control, the Executive shall be entitled to (A) all previously
earned and accrued but unpaid Base Salary up to the date of such termination and (B) severance pay equal to Base Salary plus the target annual performance bonus in the year of termination, as described in Section 2.3, divided by 12,
multiplied by two times years of service (not to exceed a total of two years of severance pay) (“Severance Period”), plus (C) continued participation in the welfare benefit plans of the Company during the Severance Period that the
Executive participated in prior to his termination, to the extent permitted by applicable law. Subject to Section 3.15, such severance payments (other than continued participation in welfare benefit plans) will be made in a lump sum on the date
of the Executive’s termination of employment. All payments shall be subject to deductions for customary withholdings, including, without limitation, federal and state withholding taxes and social security taxes. Notwithstanding the foregoing,
in the event that continued participation in welfare benefit plans of the Company during the Severance Period would subject the Executive to adverse tax consequences under Section 409A of the Internal Revenue Code of 1986, as amended, the
Company shall pay to Executive its portion of any premium under such plans during such period in a cash lump sum, less applicable withholding, on the date of the Executive’s termination of employment, and the Executive may then elect to
continue participation in Company welfare benefit plans during the Severance Period, to the extent permitted by law, by paying the entire premium due under such plans, including both the employee and employer portions of such premium.

  

	 	(ii)	Within Twenty-Four Months After Change of Control. If the Executive is involuntarily terminated by the Company without Cause (other than on account of death or Disability)
prior to the end of the Employment Period within twenty-four months after a Change of Control, or if the Executive is determined to have terminated for Good Reason prior to the end of the Employment Period within twenty-four months after a Change of
Control, the Executive shall be entitled to all previously earned and accrued but unpaid Base Salary up to the date of such termination and severance pay equal to two times Base Salary and target annual performance bonus for the year of termination
(as though such target had been achieved), and all outstanding stock options, and other equity grants, as applicable, granted to the Executive shall become 100% vested and shall be exercisable in accordance with their terms. Subject to
Section 3.15, such severance payments will be made in a lump sum on the date of the Executive’s termination of employment, provided, however, that stock options and other equity grants, as applicable, shall be exercisable and otherwise
payable in accordance with their terms. All payments shall be subject to deductions for customary withholdings, including, without limitation, federal and state withholding taxes and social security taxes. 

  

	(d)	Limitation on Certain Additional Payments Contingent on a Change in Ownership or Effective Control. Anything in this Agreement to the contrary notwithstanding, in the event
it shall be determined that any payment or distribution by Company to or for the benefit of Executive (“Payments”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(“Code”), then the Payments due under this Agreement shall be decreased to the greatest amount that could be paid to Executive such that receipt of Payments would not give rise to any such excise tax. 

  

	(e)	Severance Forfeiture. Executive agrees that the Executive shall be entitled to the severance pay as set forth in this Agreement only if the Executive has not materially
breached as of the date of termination any provisions of this Agreement and does not materially breach such provisions at any time during the period for which such payments are to be made. The Company’s obligation to make such payments will
terminate upon the occurrence of any such material breach during the severance period. 

  

	(f)	No Additional Severance. Executive hereby agrees that no severance compensation of any kind, nature or amount shall be payable to Executive, except as expressly set forth in
this Section 2.4, and Executive hereby irrevocably waives any claim for any other severance compensation. 

	(g)	Death or Disability. The Company’s obligation under this Agreement terminates on the last day of the month in which the Executive’s death occurs or on the date as
of which Executive first becomes entitled to receive disability benefits under the Company’s long-term disability plan. The Company shall pay to Executive or the Executive’s estate all previously earned and accrued but unpaid Base Salary
and bonuses up to such date in a lump sum payment. Thereafter, the Executive or his estate shall not be entitled to any further Base Salary, bonus or benefits for that year or any subsequent year, except as may be provided in an applicable benefit
plan or program. 

  

	(h)	Stock Options. Upon Executive’s voluntary termination of employment or termination by the Company without Cause, the Executive may exercise any options granted to him
within ninety (90) days following his termination of employment, and any stock options granted to him shall so provide. Notwithstanding the foregoing, any stock options which were granted to the Executive prior to the date of this Agreement
shall not be exercisable beyond the latest date permitted under Section 409A of the Internal Revenue Code of 1986, as amended, without causing adverse tax consequences thereunder and without any such extension being deemed to be the granting of
a new stock right. 

  

	2.5	Confidential Information.  

  

	(a)	Executive recognizes that the Company is engaged in the business of research, development, and sale of telecommunications services in several countries throughout the world (the
“Company’s Business”), which business requires for its successful operation the fullest security of its Confidential Information of which Executive will acquire knowledge during the course of his employment. 

 

	(b)	Executive shall use his best efforts and diligence both during and after his employment with the Company, regardless of how, when or why Executive’s employment ends, to protect
the confidential, trade secret and/or proprietary character of all Confidential Information. Executive shall not, directly or indirectly, use (for himself or another) or disclose any Confidential Information, for so long as it shall remain
proprietary or protectible as confidential or trade secret information, except as may be necessary for the performance of Executive’s duties for the Company. 

  

	(c)	Executive shall promptly deliver to the Company, at the termination of the Employment Period or at any other time at the Company’s request, without retaining any copies, all
documents, information and other material in Executive’s possession or control containing, reflecting and/or relating, directly or indirectly, to any Confidential Information. 

  

	(d)	Executive’s obligations under this Section 2.5 shall also extend to the confidential, trade secret and proprietary information learned or acquired by Executive during his
employment from others with whom the Company has a business relationship. 

  

	(e)	Executive’s material and intentional breach of Section 2.5 of this Agreement shall relieve Company of its obligations (if any) to pay any further severance benefits under
this Agreement. 

  

	2.6	Competitive Activity. 

  

	(a)	Executive shall not, directly or indirectly (whether as owner, partner, consultant, employee or otherwise), at any time during his employment with the Company and for a period of
one (1) year following his employment with the Company, regardless of how, when or why Executive’s employment terminates, (i) engage in or invest in any non-public business that is engaged in any work or activity that involves a
product, process, service or development which is then competitive with and the same as or similar to a product, process, service or development on which Executive worked or with respect to which Executive had access to Confidential Information
while with the Company, or (ii) otherwise compete against the Company’s Business, unless the executive informs the Company of his actions in writing and the Company consents, which consent shall not be unreasonably withheld.

  

	(b)	Following expiration of the one-year period in Section 2.6(a) of this Agreement, Executive shall continue to be obligated under Section 2.5 of this Agreement not to use or
to disclose Confidential Information so long as it shall remain proprietary or protectible as confidential or trade secret information. 

  

	(c)	Following termination of Executive’s employment with the Company for any reason, Executive agrees to advise the Company of his new employer, work location and job
responsibilities within three (3) days after accepting new employment if such new employment commences within one (1) year following Executive’s termination of employment with the Company. Executive further agrees to keep the Company
so advised of any change in his employment for one (1) year following the termination of his employment with the Company. 

	(d)	Executive understands that the intention of Sections 2.5 and 2.6 of this Agreement is not to prevent the Executive from earning a livelihood and Executive agrees nothing in this
Agreement would prevent Executive from earning a livelihood utilizing his general purchasing, sales, professional or technical skills in any of the businesses or facilities of companies which are not directly or indirectly in competition with the
Company. 

  

	(e)	Executive agrees that during his employment with the Company and for a period of one (1) year following Executive’s termination of employment, regardless of how, when or
why employment ceased, Executive shall not in any manner or in any capacity, directly or indirectly, for himself or any other Person or entity, actually or attempt to: (i) solicit any Customer or Potential Customer of the Company for the
purpose of selling any products competitive with products sold by the Company, or otherwise interfere with or take away any Customer or Potential Customer of the Company or the business of any such Customer or Potential Customer; or
(ii) interfere with the Company’s relationship with any Customer or supplier of the Company. 

  

	(f)	During Executive’s employment with the Company and for a period of one (1) year following Executive’s termination of employment, regardless of how, why or when
employment ceased, Executive shall not, directly or indirectly, solicit for employment, hire or offer employment to, or otherwise aid or assist (by disclosing information about employees or otherwise) any other person or entity other than the
Company in soliciting for employment, hiring or offering employment to, any employee of the Company. 

  

	(g)	Executive’s breach of Section 2.6 of this Agreement shall relieve Company of its obligations (if any) to pay any further severance benefits under this Agreement.

  

	2.7	Ideas, Inventions and Discoveries. 

  

	(a)	Executive shall promptly disclose to the Company any ideas, inventions or discoveries, whether or not patentable, which Executive may conceive or make (alone or with others) during
the Employment Period, whether or not during working hours, and which, directly or indirectly (i) relate to matters within the scope of Executive’s duties or field of responsibility during Executive’s employment with the Company; or
(ii) are based on Executive’s knowledge of the actual or anticipated business or interest of the Company; or (iii) are aided by the use of time, materials, facilities or information of the Company. 

  

	(b)	Executive hereby assigns to the Company or its designee, without further compensation, all of the right, title and interest in all such ideas, inventions or discoveries in all
countries of the world except for patents currently held by Executive developed outside of employment with the Company. 

  

	(c)	Without further compensation but at the Company’s expense, Executive shall give all testimony and execute all patent applications, rights of priority, assignments and other
documents and in general do all lawful things requested of Executive by the Company to enable the Company to obtain, maintain and enforce protection of such ideas, inventions and discoveries for and in the name of the Company or its designee, as the
case may be, in all countries of the world. 

  

	(d)	Executive’s breach of Section 2.7 of this Agreement shall relieve Company of its obligations (if any) to pay any further severance benefits under this Agreement.

 ARTICLE III 
 Miscellaneous 
  

	3.1	Executive's Representations. Executive hereby represents and warrants to the Company that (i) Executive’s execution, delivery and performance of this
Agreement do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which he is bound, (ii) Executive is not a party to or
bound by any employment agreement, noncompete agreement or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding
obligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents that he fully understands the terms and conditions contained herein. 

	3.2	Survival. Sections 2.5, 2.6 and 2.7 and Sections 3.3 through 3.12 shall survive and continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period. 

  

	3.3	Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be
deemed to have been given when delivered personally, sent by electronic mail, mailed by certified or registered mail, return receipt requested and postage prepaid, or sent via a nationally recognized overnight courier, or sent via facsimile to the
recipient. Such notices, demands and other communications will be sent to the address indicated below: 

 To the Company:

 John F. DePodesta 
 Executive
Vice President 
 Primus Telecommunications Group, Incorporated 
 7901 Jones Branch Road, 9th Floor 
 McLean, Virginia 22102 
 e-mail: jdepodesta@primustel.com 
 To
Executive: 
 K. Paul Singh 
 9888 Windy Hollow Road 
 Great Falls, Virginia 22066 
 e-mail: bypass2001@aol.com 
 or such other address or to the attention of such other person as the recipient party shall
have specified by prior written notice to the sending party. 
  

	3.4	Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. If any
provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, (a) the parties agree that such provision(s) will be enforced to the maximum extent permissible
under the applicable law, and (b) any invalidity, illegality or unenforceability of a particular provision will not affect any other provision of this Agreement. 

  

	3.5	Successors and Assigns. Except as otherwise provided herein, all covenants and agreements contained in this Agreement shall bind and inure to the benefit of and be
enforceable by the Company, and their respective successors and assigns. This Agreement is personal to Executive and except as otherwise specifically provided herein, this Agreement, including the obligations and benefits hereunder, may not be
assigned to any party by Executive. 

  

	3.6	Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

  

	3.7	Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. 

  

	3.8	Waiver. Neither any course of dealing nor any failure or neglect of either party hereto in any instance to exercise any right, power or privilege hereunder or under
law shall constitute a waiver of such right, power or privilege or of any other right, power or privilege or of the same right, power or privilege in any other instance. All waivers by either party hereto must be contained in a written instrument
signed by the party to be charged therewith, and, in the case of Company, by its duly authorized officer. 

  

	3.9	Entire Agreement. This instrument constitutes the entire agreement of the parties in this matter and shall supersede any other agreement between the parties, oral or
written, concerning the same subject matter including, but not limited to, any prior employment and severance agreements. 

  

	3.10	Amendment. This Agreement may be amended only by a writing which makes express reference to this Agreement as the subject of such amendment and which is signed by
Executive and by a duly authorized officer of the Company. 

  

	3.11	 Governing Law. This Agreement shall be signed by the parties in McLean, Virginia. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by and construed in accordance with the 

	 	 
domestic law of the Commonwealth of Virginia, without giving effect to any choice of law or conflict of law provision or rule (whether of the Commonwealth of
Virginia or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Virginia. Any litigation relating to or arising out of this Agreement shall be filed and litigated exclusively in the
Commonwealth of Virginia. 

  

	3.12	Remedies. Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically, to recover damages and costs (including
reasonable attorneys' fees) caused by any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement, including, without limitation, Sections 2.5, 2.6 and 2.7 hereof, and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or deposit) for
specific performance and/or other injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement. 

  

	3.13	Exit Interview. To ensure a clear understanding of this Agreement, Executive agrees, at the time of termination of Employee's employment, to engage in a one-hour exit
interview with the Company at a time and a local place designated by the Company and at the Company's expense. Executive understands and agrees that during said exit interview, Executive may be required to confirm that he will comply with his
on-going obligations under this Agreement. The Company may elect, at its option, to conduct the exit interview by telephone. 

  

	3.14	Future Employment. Executive shall disclose the existence of this Agreement to any new employer or potential new employer which offers products or services that may
compete with the Company’s Business if such new employment commences within one (1) year following Executive’s termination of employment with the Company. Executive consents to the Company informing any subsequent employer of
Executive, or any entity which the Company in good faith believes is, or is likely to be, considering employing Executive, of the existence and terms of this Agreement if such subsequent employment commences (or is expected to commence) within one
(1) year following the Executive’s termination of employment with the Company. 

  

	3.15	Time of Payment. Notwithstanding anything herein to the contrary, in the event that the Executive is determined to be a specified employee in accordance with
Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and other guidance issued thereunder for purposes of any severance pay payment under this Agreement, such severance payments shall be made or begin, as
applicable, on the first payroll date which is more than six months following the date of separation from service, to the extent required to avoid the adverse tax consequences to the Executive under Section 409A of the Internal Revenue Code of
1986, as amended. 

 IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement this 26th day of April,
2007. 
  

			
	PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
		
	By:	 	  

		
	Name:	 	David E. Hershberg
		
	Title:	 	Chairman, Compensation Committee
	
	EXECUTIVE
		
	By:	 	  

		
	Name:	 	K. Paul Singh

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