Document:

Exhibit 10.1

 Exhibit 10.1 
 SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT 
 Between

 STAR SCIENTIFIC, INC., 
 as Issuer, 
 And 

The Investor Set Forth on Schedule I hereto 
 December 22, 2011 
  

  

 This SECURITIES PURCHASE AND REGISTRATION RIGHTS AGREEMENT (this
“Agreement”) is entered into and effective as of December 22, 2011, between Star Scientific, Inc., a Delaware corporation (the “Company”), and the investor set forth on Schedule I hereto (the
“Investor”). 
 WHEREAS, the Investor has previously entered into a securities purchase and registration rights
agreements with the Company (the “Prior Agreement”), whereby the Company sold to the Investor and the Investor purchased from the Company a warrant (the “Prior Warrant”), to purchase the amount of shares of the
Company’s common stock, par value $0.0001 per share (“Common Stock”), set forth opposite the Investor’s name under the heading “Prior Warrant Shares” on Schedule I hereto (the “Prior Warrant
Shares”), having a per share exercise price set forth opposite the Investor’s name under the heading “Prior Exercise Price” on Schedule I hereto; 

WHEREAS, the Company and the Investor desire that upon the terms and conditions set forth herein that: (i) Investor will exercise
its Prior Warrant thereby purchasing its Prior Warrant Shares (A) at the exercise price and (B) for the aggregate exercise price set forth opposite the Investor’s name under the headings “Exercise Price” and “Aggregate
Exercise Price”, respectively, on Schedule I hereto and that the Company issue to the Investor the Prior Warrant Shares; and (ii) Investor will purchase from the Company and the Company will sell and issue to the Investor a warrant,
substantially in the form attached hereto as Exhibit A (the “Warrant”), to purchase the amount of shares of the Company’s Common Stock set forth opposite the Investor’s name under the heading “New
Warrants” on Schedule I hereto (the “Warrant Shares”), having an exercise price set forth opposite Investor’s name under the heading “New Exercise Price” on Schedule I hereto; 

WHEREAS, the Investor acknowledges that as an inducement for the Company to enter into this Agreement, the Investor has waived its rights
under Section 12 of its Prior Warrant, with regard to the transactions contemplated hereby; and 
 WHEREAS, the Investor
will have registration rights with respect to the 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 Prior Warrant Shares and Warrant. At the
Closing (as defined herein), the Company will sell to the Investor, and the Investor will purchase from the Company, upon the terms and subject to the conditions hereinafter set forth, the Prior Warrant Shares and the Warrant for the aggregate
purchase price set forth opposite the Investor’s name under the heading “Aggregate Exercise Price” on Schedule I hereto. 
 2. Delivery of the Prior Warrant Shares and Warrant at Closing. The completion of the purchase, sale and issuance of the Prior Warrant 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 the Investor shall agree), at the offices of the Company’s counsel. At the Closing, the Company shall issue to the Investor as
indicated on Schedule I hereto (i) one or more stock certificates, registered in the Investor’s name and address as set forth on Schedule I hereto, representing the Prior Warrant Shares and (ii) the Warrant issued in the
name of the Investor. The Company’s 

  
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obligation to issue the Prior Warrant Shares and the Warrant to the Investor shall be subject to the following conditions, any one or more of which may be waived by the Company: (i) 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 the Investor for the Prior Warrant Shares and Warrant that the Investor is
hereby agreeing to purchase set forth opposite the name of the Investor under the heading “Aggregate Exercise Price” on Schedule I hereto; (ii) receipt by the Company of an executed Notice of Exercise Form annexed to the Prior
Warrant covering the Prior Warrant Shares of the Investor; and (iii) the accuracy, in all material respects, of the representations and warranties made by the Investor and the fulfillment, in all material respects, of those undertakings of the
Investor to be fulfilled prior to the Closing. The Investor’s obligation to purchase the Prior Warrant 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 Investor): (i) receipt by the Investor of a counter-signed copy of this Agreement executed by the Company; (ii) receipt by the Investor of a copy of the Warrant;
(iii) receipt by the Investor of evidence of irrevocable instructions issued by the Company to the Company’s transfer agent instructing the transfer agent to issue to the Investor a stock certificate representing the Investor’s Prior
Warrant Shares (subject to full satisfaction of the conditions to Closing set forth in this Section 2); and (iv) 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. 
 3. Representations,
Warranties and Covenants of the Company. The Company hereby represents and warrants to, and covenants with the 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 Prior Warrant 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 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). Upon their issuance in accordance with the
terms of this Agreement and the Prior Warrant, the Prior Warrant 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. 

  
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 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 Prior Warrant 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 (i) conflict with or constitute a violation of, or default (with or without the giving of notice or the passage of time or both) under, (A) 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, (B) the charter, by-laws or other organizational documents of the Company or any Subsidiary, or (C) 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 (ii) 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 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 Prior Warrant Shares and Warrant pursuant to this Agreement, other than such as have been or will be made or obtained prior to the Closing Date, and except for any
securities filings required to be made under federal or state securities laws. 
 3.4 SEC Filings. Since January 1,
2010, 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 “Exchange Act”) (such reports, including exhibits thereto and documents incorporated by reference therein collectively, the “SEC Documents”). To
the best of the Company’s knowledge, as of their respective filing dates, none of the SEC Documents contained an untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary in order to make
the statements made therein, in the light and circumstances under which they were made, not misleading, except to the extent corrected by subsequently filed SEC Documents. 
 3.5 Absence of Certain Change. Except as disclosed in the SEC Documents, since September 30, 2011, 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. 

  
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 3.6 Capitalization. As of December 21, 2011, the authorized capital stock of the
Company consisted of (i) 207,500,000 shares of Common Stock, of which 135,055,505 shares were issued and outstanding and 50,409,335 shares were 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 were 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”). 

3.7 Registration of the Prior Warrant Shares. 
 (a) The Prior Warrant Shares have been duly registered for resale upon exercise of the Prior Warrant pursuant to registration statements on Form S-3 (the “Prior Registration Statement”)
filed pursuant to the Prior Agreement. 
 (b) The Prior Registration Statement has been declared effective by the Commission,
and no stop order relating thereto has been issued and, to the Company’s knowledge, no such stop order has been threatened or proceeding to issue such a stop order commenced. 

(c) The prospectus contained in the Prior Registration Statement is current and may be used by the Investor for resale of the Prior
Warrant Shares. 
 (d) The Prior Warrant Shares are duly listed for trading on the Nasdaq Global Market (the “Principal
Market”) upon issuance. 
 3.8 Broker. The Company 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 the Investors relating to this Agreement or the transactions contemplated hereby. 
 4. Representations, Warranties and Covenants of Investor. The Investor represents and warrants to, and covenants with, the Company, as follows: 

  
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 4.1 Due Authorization; Organization. Investor has all requisite power, authority and
capacity to execute, deliver and perform its 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). Any individual retirement account (“IRA”) to which the Prior Warrant Shares, the Warrant or Warrant Shares may be issued and delivered on behalf of the Investor, if applicable, is
duly organized and validly existing in good standing under the laws of the jurisdiction of its organization. Such IRA 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 on the financial condition of
Investor or such IRA. 
 4.2 Non-Contravention. The execution and delivery of this Agreement, the purchase of the Prior
Warrant 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 (i) conflict with or constitute a violation of, or default (with or
without the giving of notice or the passage of time or both) under, (A) 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, (B) the charter, by-laws or other organizational documents of Investor, as applicable, or (C) any law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to Investor or its property, or (ii) 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
Prior Warrant 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 Prior Warrant Shares and the Warrant for its own account for investment only and with no present intention of distributing any of the
Prior Warrant Shares, the Warrant or the Warrant Shares in violation of the applicable securities laws, or any arrangement or understanding with any other persons regarding the distribution of the Prior Warrant Shares, Warrant or Warrant Shares.
Investor has been advised and understands that neither 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 Prior Warrant 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 became aware of the transactions contemplated hereby. For the purposes of this Section 4.4, “Short Sales” include, without limitation, all “short
sales” as defined in Rule 200 of Regulation SHO adopted under the Exchange 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. The 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, press release, or other applicable Exchange Act report
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 Prior Warrant 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 Prior Warrant 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 its investment in the Prior Warrant 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 Prior Warrant 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 Prior Warrant 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 and agrees 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, 2011, as reported on the Company’s quarterly report on Form 10-Q, filed
with the Commission on November 9, 2011, and that, except as disclosed in the SEC documents, 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 its purchase of the Prior Warrant Shares, Warrant and, if applicable, Warrant Shares involves a high degree of risk and that Investor may lose its entire investment in the Prior Warrant Shares, Warrant and, if
applicable, 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. 

  
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 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 recommendation or endorsement of the Prior Warrant Shares, Warrant or Warrant Shares or the fairness or suitability of an investment in the Prior Warrant 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 Prior Warrant 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 any
Prior Warrant Shares or Warrant Shares pursuant to the Prior Registration Statement or registration statement contemplated by Section 5 hereof, as applicable, including the prospectuses contained therein, 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 available to Investor. 

4.10 Residence. Investor is a resident or organized under the laws of the jurisdiction set forth under the Investor’s name on
Schedule I hereto. 
 4.11 No Market. Investor understands that the Prior Warrant is 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 Warrant and Warrant Shares must be held indefinitely unless and until the resale of
the Warrant or Warrant Shares is registered under the Securities Act or subject to the terms and conditions of this Agreement and the applicable securities laws, 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 Prior Warrant 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 Prior Warrant Shares, Warrant and Warrant Shares. 

4.14. Investor Undertaking. Investor covenants that it will not sell, transfer, assign, hypothecate or pledge in any way any of
the Prior Warrant Shares or the Warrant Shares unless the resale of the Prior Warrant Shares or Warrant Shares, as applicable, have been registered for resale under the Securities Act and in compliance with applicable prospectus delivery
requirements, if any, or otherwise in compliance with the requirements of an available exemption from registration under the Securities Act and the rules and regulations promulgated thereunder. Investor further agrees to indemnify the Company
against any loss, cost or expenses, including reasonable expenses, incurred as a result of such legend removal on Investor’s behalf. 

  
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 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
the Prior Agreement, have been transferred in compliance with this Agreement and the Prior 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) 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 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 Warrant Shares or other securities shall cease to be Registrable Securities when (D) they have
been sold to the public or (E) 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 Statement (as defined herein) 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:

  
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 (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 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 a Form S-3 promptly after Form S-3 becomes available to the Company) covering resales by the Holders as selling stockholders (not underwriters) of the Warrant Shares issuable upon full exercise of the Warrant (the
“Registration Statement”). The Company shall use its reasonable best efforts to cause such Registration Statement and other filings to be declared effective as soon as possible, and in any event prior to 180 days (or, if the
Commission elects to review the Registration Statement, 200 days) following the Closing. 
 (ii) 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 Statement at the earliest possible date. The Company shall provide the
Holders reasonable opportunity to review the portions of any such Registration Statement or amendment or supplement thereto containing disclosure regarding the Holders prior to filing. 

(iii) Prepare and file with the Commission such amendments and supplements to such Registration Statement and the
prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement and notify the Holders of
the filing and effectiveness of such Registration Statement and any amendments or supplements. 
 (iv) Furnish
or otherwise make available to each Holder copies of a current prospectus included in the Registration Statement conforming with the requirements of the Securities Act, copies of the Registration Statement, 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. 

(v) Register and qualify the securities covered by the Registration Statement 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. 
 (vi) 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 Statement, 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. 

  
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 (vii) 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. 
 (viii) Upon request, permit counsel to the Holders to review the Registration Statement 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 Principal 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 Statement without prior notice
to such counsel, provided, however, that the Company shall not be obligated to comply with this Section 5.2(a)(viii) if compliance would cause the Company to fail to comply with any other provisions hereunder. 

(ix) If required by the Principal Market or the principal securities exchange and/or market on which the Common Stock is
then listed, qualify the Registrable Securities covered by such Registration Statement for listing on the Principal Market or the principal securities exchange and/or market on which the Common Stock is then listed, including the preparation and
filing of any required filings with such principal market or exchange. 
 (b) In the event that the Registration Statement has
been declared effective by the Commission and, afterwards, any Holder’s ability to sell Registrable Securities registered for resale under the Registration Statement 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 the Registration Statement or the fact that an event has occurred as a result of which the prospectus (including any
supplements thereto) included in the Registration Statement 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, then the Company shall take such action as may be necessary to amend or supplement the Registration Statement or the prospectus (including any supplements thereto) included in the Registration Statement,
such that the Registration Statement 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 any Holder intends to distribute the Registrable Securities by means of an underwriting, such Holder 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) Subject to Section 5.2(c) above, 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. 

  
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 (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 the Registration Statement, 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 the Registration Statement, 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 the Registration Statement, 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 the Registration Statement 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 (f)(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 the Registration Statement and the prospectus used in connection with the Registration Statement, which prospectus is to be filed pursuant
to Rule 424 promulgated under the Securities Act, as may be necessary to keep the Registration Statement 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 the Registration Statement. In the case of amendments and supplements to the Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 5.2(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 Exchange Act, the Company shall have incorporated such report by reference into
the Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement the
Registration Statement. 
 (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)(vi) or 5.2(a)(vii), and upon notice of any suspension under Section 5.2(f), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented prospectus and/or amendment to the Registration Statement contemplated by this Section 5.2, or until it is advised
in 

  
 12 

 
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 Registration Statement. 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 the Registration Statement 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 the Registration Statement covering the Registrable Securities has been declared effective by the Commission.

 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 Registration Statement initially became effective until the earlier of (i) the date on which all the Holders have completed the sales or distribution described in the
Registration Statement relating to the Registrable Securities registered for resale thereunder or, (ii) 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 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 

  
 13 

 
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 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). 

  
 14 

 (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 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 Sections 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. 

  
 15 

 
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 Statement covering the Registrable Securities and shall not be changed without written consent of such Holder. Each Holder agrees that, other than ordinary 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 Prior Warrant Shares and the Warrant Shares in the name of each Investor. 

Any certificate representing Prior Warrant Shares shall be stamped or otherwise imprinted with a legend in substantially the following
form: 

  
 16 

 THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, AND AFTER RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR THAT THE PROSPECTUS DELIVERY REQUIREMENTS
HAVE BEEN MET. 
 Any certificate representing the Warrant Shares issued by the Company 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 DECEMBER 22, 2011 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 Prior Warrant Shares or Warrant Shares, issued upon exercise of the Prior Warrant or Warrant, as
applicable, without the legends set forth above at such time as the Holder thereof is (i) permitted to transfer such Prior Warrant Shares or Warrant Shares, as applicable, without restriction pursuant to an available exemption from registration
under the Securities Act, and upon such transfer after delivery to the Company of a customary representation satisfactory to the Company that such exemption has been met, or (ii) at such time the Prior Warrant Shares or Warrant Shares, as
applicable, have been registered for resale under the Securities Act, and upon such resale after delivery to the Company of a customary representation that the Holder has complied with the plan of distribution in the applicable prospectus contained
in the registration statement and that the prospectus delivery requirements have been met, if any. 
 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 Prior Warrant Shares and the Warrant being purchased and the payment therefor. 

8. Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (i) if
within domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile, or (ii) if delivered from outside the United States, by International Federal
Express or facsimile, and shall be deemed given (A) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (B) if delivered by nationally recognized overnight carrier, one business day after
so mailed, (C) if delivered by International Federal Express, two business days after so mailed, and (D) if delivered by facsimile, upon electric confirmation of receipt and shall be delivered as addressed as follows: 

  
 17 

 (a) if to the Company, to: 

Star Scientific, Inc. 
 4470 Cox Road 
 Glen Allen, Virginia 23060 

Telephone: (804) 527-1970 
 Facsimile: (804) 527-1976 
 Attention: Chief Financial
Officer 
 with copies to: 
 Star Scientific, Inc. 
 7475 Wisconsin Ave. 

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 its address set forth under its name on Schedule I 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 by the Company or the Investor except pursuant to an instrument in
writing signed by each of the Company and the Investor. 
 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. 

  
 18 

 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 Prior Warrant Shares, Warrant or Warrant Shares transferred in accordance
with this Agreement, including the legends described herein, to any permitted transferee of such Prior Warrant Shares, Warrant or Warrant Shares, 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. Pronouns. All pronouns or any variation thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person, persons, entity or entities may require. 
 [Signature pages follow.] 

  
 19 

 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. 
  

			
	JMB LLC
		
	By:	 	 /s/ John McKeon

		 	Title: Authorized Signatory

  
 Signature
Page to Securities Purchase and Registration Rights Agreement 

 SCHEDULE I 
 SCHEDULE OF INVESTORS 
  

				September 30,				September 30,				September 30,				September 30,				September 30,	
	 Name and Address
	    	Prior
Warrant
Shares	 	    	Prior
Exercise 
Price	 	    	Aggregate
Exercise 
Price	 	    	New Warrants	 	    	New Exercise
Price	 
	 JMB LLC
	    	 	4,200,000	  	    	$	1.50	  	    	$	6,300,000	  	    	 	4,200,000	  	    	$	2.32	  

  

 Exhibit A 

THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT, AND UPON DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE SECURITIES ACT OR THAT THE PROSPECTUS DELIVERY REQUIREMENTS HAVE BEEN MET. 

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, JMB LLC (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 December 22, 2011 (the “Initial Exercise Date”) and on or
prior to the close of business on December 22, 2016 (the “Termination Date”) but not thereafter (the “Exercise Period”), to subscribe for and purchase from Star Scientific, Inc., a corporation incorporated in
Delaware (the “Company”), up to 4,200,000 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 $2.32, 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 December 22, 2011, 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 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. 

(c) Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable by the
Holder hereof to the extent (but only to the extent) that the Holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the Common Stock. To the extent the above limitation applies, the
determination of whether this Warrant shall be exercisable (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder) and of which such securities shall be exercisable (as among all such securities owned by the
Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability to exercise this Warrant pursuant to this
paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. For the purposes of this paragraph, beneficial ownership and all determinations and calculations
(including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. The
provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum
Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. Upon the written or oral request of the Holder, the Company shall as
soon as practicable confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock. 

“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. 
 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 

  
 2 

 (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 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. 

  
 3 

 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 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 

  
 4 

 (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. 
 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 date the registration statement registering the resale of the Warrant Shares issuable upon exercise of the Warrant is declared effective by
the U.S. Securities and Exchange Commission, 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

  
 5 

 
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) the VWAP of the Common Stock on the Principal Market is equal to or greater than $3.00 (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 (vi) 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 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, 

  
 6 

 
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: 
 JMB LLC 

Telephone: (xxx) xxx-xxxx 

Attention: Mr. John McKeon 
 or to the address of the Holder as shown on the books of the Company; or 
 (ii) If to the Company: 
 Star Scientific, Inc.

 4470 Cox Road 

Glen Allen, Virginia 23060 

Telephone: (804) 527-1970 

Facsimile: (804) 527-1976 

Attention: Chief Financial Officer 

with a copy to: 

Star Scientific, Inc. 

7475 Wisconsin Avenue 

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. 

  
 7 

 (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: December 22, 2011 

 

			
	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:  __________________________________

  
 10First Amendment to Asset and Membership Interest Purchase Agreement

 Exhibit 10.1 
 FIRST AMENDMENT TO ASSET AND MEMBERSHIP INTEREST PURCHASE AGREEMENT 
 THIS FIRST
AMENDMENT TO ASSET AND MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Amendment”) is made this 23rd day of December, 2011 (the “Effective Date”), by and among Forbes Energy Services Ltd., a Texas corporation
(“Parent”), Forbes Energy Services LLC, a Delaware limited liability company (“FES LLC”), Forbes Energy International, LLC, a Delaware limited liability company (“FEI”), C.C. Forbes, LLC, a Delaware
limited liability company (“CCF”), Forbes Energy Services de México, S. de R. L. de C.V., a Mexican limited liability company (“Forbes Mexico,” and together with Parent, FES LLC, FEI and CCF, the
“Sellers”), Dirivera Investments LLC, a Texas limited liability company (the “U.S. Buyer”), and RGV Holding, S.A. de C.V., a Mexican corporation (the “Mexican Buyer,” and together with the U.S.
Buyer, the “Buyers”). 
 RECITALS: 
 The Parties hereby state that: 
 WHEREAS, the Sellers and the Buyers
entered into that certain Asset and Membership Interest Purchase Agreement dated December 8, 2011 (the “Original Agreement”); and 
 WHEREAS, the Sellers and the Buyers desire to amend certain terms and provisions of the Original Agreement. 
 NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this Amendment, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, 
 IT IS AGREED AS FOLLOWS: 
  

	1.	Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings set forth in the Original Agreement.

  

	2.	Amendment to the Original Agreement. Effective the date hereof, the Original Agreement is hereby: 

 

	 	a.	Amended to delete Article 2.1(a) in its entirety and replace it with the following: 

“On the terms and subject to the conditions set forth in this Agreement, at the Closing, Parent and Forbes Mexico shall transfer,
convey, and assign to the Mexican Buyer all of their right, title and interest in and to the following (items (i)-(vii) below, collectively, the “Forbes Mexico Assets”): (i) the well servicing rigs set forth on Schedule 2.1(a)
that are in the process of being permanently imported into Mexico (the “Permanently Imported Rigs”) together with all spare parts and accessories that are attached to or associated exclusively with such Rigs, (ii) any existing
certificates of origin or technical specifications in the possession of the Sellers for such Rigs, (iii) all Tangible Personal Property (including any oilfield services equipment, but excluding the Tangible Personal Property being conveyed
under Article 2.1(b)) and Inventories of Parent and Forbes Mexico located in Mexico, (iv) any manuals, reports, certifications, records (including with respect to use, transportation, tracking,

 
background and maintenance) and other data and documentation exclusively related to the Forbes Mexico Assets set forth in the other subsections of this definition (including existing Customs
Documentation in the possession of the Sellers), (v) any rights under warranties issued with respect to the Forbes Mexico Assets set forth in the other subsections of this definition, including claims under such warranties arising prior to
Closing, (vi) all Governmental Authorizations and all pending applications for or renewals of the Forbes Mexico Assets set forth in the other subsections of this definition, to the extent such Governmental Authorizations are transferrable, and
(vii) all of the intangible rights and property of the Sellers exclusively related to the Forbes Mexico Assets set forth in the other subsections of this definition, to the extent such rights and property are transferrable. The sale and
purchase of the Forbes Mexico Assets shall take place in Poza Rica, Veracruz, Mexico. 
 The Parties agree that the sale and
transfer of the Forbes Mexico Assets shall be done through Mexican invoices pursuant to Mexican Law.” 
  

	 	b.	Amended to delete Article 2.1(c) in its entirety and replace it with the following: 

“To the extent that all the Forbes US Assets have not been permanently imported into Mexico pursuant to Article 2.1(e), before the
Closing, Parent and CCF shall, at their sole expense, cause the Forbes US Assets which are presently located in Mexico to be repositioned to McAllen, Texas (the “McAllen Repositioning”). The sale and purchase of such Forbes US Assets shall
take place in McAllen, Texas.” 
  

	 	c.	Amended to delete Article 2.1(e) in its entirety and replace it with the following: 

“The Sellers shall use commercially reasonable efforts to cause the Forbes US Assets to be permanently imported into Mexico prior to
the Closing Date and, in connection therewith, to cause any Assets owned by CCF to be transferred to the Mexican branch of the Parent. In the event that the Sellers are successful in permanently importing Forbes US Assets prior to the Closing Date,
such assets will automatically be considered Forbes Mexico Assets, to the extent owned by CCF, shall be transferred by CCF to the Mexican branch of the Parent, and will be sold in Poza, Rica Veracruz, Mexico pursuant to Article 2.1(a). In this
circumstance, such assets would no longer be considered Forbes US Assets. Notwithstanding the foregoing, to the extent that the Sellers are not able to successfully complete the permanent importation of any of the Forbes US Assets, such assets will
continue to be considered Forbes US Assets, the Sellers shall not be obligated to cause such assets to be transferred from CCF to the Mexican branch of the Parent and such assets will be sold in McAllen, Texas pursuant to Article 2.1(c). Further, to
the extent that the Sellers are not able to successfully complete the permanent importation of the Permanently Imported Rigs by the Closing Date, such Rigs will automatically be considered Temporarily Imported Rigs and Forbes US Assets and will be
sold in McAllen, Texas pursuant to Article 2.1(c). In this circumstance, such Rigs would no longer be considered Forbes Mexico Assets.” 
  

	 	d.	Amended to delete Article 2.6 in its entirety and replace it with the following: 

 “Closing. The sale of the Forbes Mexico Assets to the Mexican Buyer in Poza
Rica, Veracruz, Mexico and, if applicable, the Forbes US Assets to the US Buyer in McAllen, Texas and the sale of the Membership Interests to the Mexican Buyer provided for in this Agreement (the “Closing”) will occur at 10:00 a.m. U.S.
Central Time on January 5, 2012 after satisfaction or waiver of all the conditions set forth in Article 8 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions) or on such other date as the Parties may agree in writing (the “Closing Date”), provided, however, that such date will be automatically extended for a reasonable amount of time to accommodate the permanent importation
contemplated by Article 2.1(e) or, if applicable, the McAllen Repositioning contemplated by Article 2.1(c) in the event such activities have not been completed by January 5, 2011. Subject to the provisions of Article 9.1, failure to consummate
the sale of the Assets and the Membership Interests by January 5, 2012 will not result in the termination of this Agreement and will not relieve any Party of any obligation under this Agreement.” 

 

	 	e.	Amended to delete Article 3.1 in its entirety and replace it with the following: 

 “Price. The purchase price for the Assets and the Membership Interests (the “Purchase Price”) is Thirty Million US Dollars (US$30,000,000.00), which will be allocated among the
Forbes Mexico Assets and the Membership Interests being purchased by the Mexican Buyer and, if applicable, the Forbes US Assets being purchased by the US Buyer pursuant to Article 2.5. The Purchase Price does not include the Value Added Tax on the
sale of the Forbes Mexico Assets, which shall be paid by the Mexican Buyer to Forbes Mexico and Parent, with respect to the Forbes Mexico Assets owned by Forbes Mexico and Parent. Upon each and every payment made by the Buyers herein to Forbes
Mexico and Parent, the Value Added Tax due and payable as provided by Law, shall also be paid, Forbes Mexico and Parent shall make the corresponding Value Added Tax payment(s) and file the corresponding Tax return(s), as applicable, and shall
provide copies of such to the Buyers. In any event the Value Added Tax paid by the Mexican Buyer to Forbes Mexico or Parent, can be subject to a tax credit according to Mexican Value Added Tax Law and therefore, Forbes Mexico and Parent are entitled
to pay the Taxing Authority the net Value Added Tax after the credit, if any. If (i) the Sellers fail to deliver any Rig(s) in substantially the same operating condition and repair that such Rig(s) was/were in on the Effective Date, subject to
ordinary wear and tear, and (ii) pursuant to Article 8.1(m) the Buyers elect not to consummate this Agreement with respect to such Rig(s), then the Purchase Price will be reduced by an amount (the “Rig Reduction Amount”) equal to
(x) One Million Three Hundred Thousand Dollars (US$1,300,000) per Rig or (y) to the extent that all ancillary equipment associated with such Rig(s) is also no longer in substantially the same operating condition and repair that such
equipment was in on the Effective Date, subject to ordinary wear and tear, One Million Nine Hundred Thousand Dollars (US$1,900,000) per Rig, and the amount to be paid to the Sellers under the Escrow Agreement will be reduced by such Rig Reduction
Amount and the Rig Reduction Amount shall be distributed at Closing to Buyers pursuant to the Escrow Agreement. The Buyers shall pay and deliver the Purchase Price, as adjusted pursuant to the foregoing, to the Sellers as set forth in Article 3.2
below.” 
  

	 	f.	Amended to add the following as Article 3.3: 

 “Buyers’ Importation Costs. The Buyers agree to reimburse the Sellers for fifty percent (50%) of all costs associated with the permanent importation into Mexico of any of the Forbes
US Assets and the transfer of any Assets owned by CCF to the 

 
Mexican branch of the Parent pursuant to Article 2.1(e), including importation taxes and customs broker’s fees incurred on such importation, any fees or penalties associated with the failure
to remove temporarily imported assets prior to the expiration of such temporary importation incurred in connection with attempts to permanently import such assets and the non-recoverable Value Added Tax associated with the transfer of any Assets
owned by CCF to the Mexican branch of Parent that is required to be withheld by the branch in connection therewith (fifty percent of such costs, the “Buyers’ Importation Costs”). No later than December 30, 2011, the Buyers
shall deliver to the Sellers Two Million Seven Hundred Thousand US Dollars (US$2,700,000) (the “Importation Cost Reimbursement Payment”), which amount shall be applied against the Buyers’ Importation Costs. The Sellers shall
provide the Buyers with an accounting of the Buyers’ Importation Costs, which shall be certified as correct to the best of the knowledge of the Parent’s Chief Financial Officer. In the event that the Buyers’ Importation Costs are less
than the Importation Cost Reimbursement Payment, the Sellers shall refund such excess to the Buyers at the Closing or within a reasonable time period if the Closing does not occur on January 5, 2011. In the event that the Buyer’s
Importation Costs exceed the Importation Cost Reimbursement Payment, the Buyers shall pay the Sellers an amount equal to the shortfall at the Closing or within a reasonable time period if the Closing does not occur on January 5, 2011.
Notwithstanding the foregoing, the Buyers’ obligations under this section are not conditioned upon Closing. If the Agreement is terminated by the Sellers pursuant to Article 9.1(c) or 9.1(d)(ii) (but only with respect to 8.2(b), (c),
(d) in the event the Proceeding referenced therein is instituted or threatened by any of the Buyers, an affiliate of the Buyers or with the cooperation of any of the Buyers, (e) and (f)) or terminated by the Buyers pursuant to 9.1(d)(i)
(but only with respect to 8.1(e) in the event the Proceeding referenced therein is instituted or threatened by any of the Buyers, an affiliate of the Buyers or with the cooperation of any of the Buyers) above, then the Sellers shall be entitled to
retain the Importation Cost Reimbursement Payment. If this Agreement is terminated for any other reason, the Sellers shall promptly return the Importation Cost Reimbursement Payment.” 

 

	 	g.	Amended to delete Article 4.1 in its entirety and replace it with the following: 

 “Organization and Powers. Forbes Mexico and Forbes Mexico Personnel (i) are companies duly organized, validly existing and in good standing under the Laws of Mexico and (ii) have all
requisite corporate or other power and authority to own, lease and operate their assets and properties and to carry on their business as now being conducted. Forbes Mexico and Forbes Mexico Personnel are duly qualified to do business in all
jurisdictions in which the character or location of their assets makes such qualification necessary. Parent is a corporation duly organized, validly existing and in good standing under the Laws of Texas. Parent is duly authorized to do business in
Mexico as a Mexican branch office, and is registered under the book 1607 and public instrument 49997 under the fee of Jose Maria Morera Gonzalez holder of the notary public 102 of the Federal District of the Public Registry; with Mexican Tax Payer
Number FES081203127, and Avenida 10 número 607-A, Fraccionamiento las Palmas, Poza Rica de Hidalgo, Veracruz, CP. 93230 tax domicile. FES LLC, FEI and CCF are limited liability companies duly organized, validly existing and in good standing
under the Laws of Delaware. The Sellers have all requisite corporate or limited liability company power and authority to own, lease and operate the Assets and properties and to carry on their respective businesses as now being conducted. The Sellers
are duly qualified to do business in all jurisdictions in which the character or location of the Assets makes such qualification necessary. 

	 	h.	Amended to delete Article 4.11 in its entirety and replace it with the following: 

 “Tangible Property. Parent and Forbes Mexico have good and transferrable title to all of the Forbes Mexico Assets, Parent and CCF have good and transferrable title to all of the Forbes US
Assets and Forbes Mexico Personnel has good and transferrable title to all of its assets, each free and clear of any Lien or other encumbrance, except (i) those set forth on Schedule 4.11, which will be released at or prior to the Closing,
(ii) any others that will be released at or prior to the Closing and (iii) any liens in favor of lessors for leased equipment in Mexico (but not including any liens on the Rigs or any spare parts and accessories that are attached to or
associated with such Rigs) not to exceed $1.5 million incurred on or before the Effective Date. 
  

	 	i.	Amended to delete Article 7.4 in its entirety and replace it with the following: 

 “Reimportation of the Forbes US Assets. If, pursuant to Article 2.1(e), certain of the Forbes US Assets are not permanently imported into Mexico, but rather are sold in McAllen, Texas pursuant
to Article 2.1(c), within thirty (30) days of the Closing Date, the US Buyer shall import or cause to be imported such Forbes US Assets into Mexico through the use of a common carrier. Further, the Buyers covenant that, prior to this
importation, they shall not operate the Forbes US Assets in the United States.” 
  

	 	j.	Amended to delete Article 8.1(b) in its entirety and replace it with the following: 

“The completion of the McAllen Repositioning as described in Article 2.1(b), if, pursuant to Article 2.1(e), all of the Forbes US
Assets have not been permanently imported into Mexico and transferred from CCF to the Mexican branch of the Parent;” 
  

	 	k.	Amended to delete Article 8.1(c) in its entirety and replace it with the following: 

“The representations and warranties of the Sellers in Article 4 of this Agreement or in any Schedule delivered pursuant hereto
(i) that are qualified as to materiality, shall be true and correct when made and as of the Closing Date and (ii) that are not qualified as to materiality, shall be true and correct in all material respects when made and as of the Closing
Date (in both cases, without giving effect to any supplement to any Schedule delivered after the date of this Agreement), except that any representation regarding the ownership of the Forbes Mexico Assets by CCF need not be true and correct as of
the Closing Date to the extent CCF has transferred such assets to the Mexican branch of the Parent, and the Sellers and the Members shall have delivered to Buyers a certificate, dated the Closing Date, to such effect;” 

 

	 	l.	Amended to delete Article 8.1(f) in its entirety and replace it with the following: 

“The Sellers shall have delivered to the Buyers (i) a Mexican invoice pursuant to Mexican Law, (ii) a Bill of Sale,
Assignment and Assumption Agreement signed by Parent and Forbes Mexico for all of the Forbes Mexico Assets that are Tangible Personal Property and Inventories in the form of the attached Exhibit A-1, (iii) if applicable, a U.S. bill of sale
pursuant to U.S. Law signed by Parent and CCF for all of the Forbes US Assets that are Tangible Personal Property and Inventories in the forms of the attached Exhibit A-2; (iv) an assignment of all the Forbes Mexico Assets that

 
are intangible personal property signed by Parent and Forbes Mexico in the form of the attached Exhibit A-3; (v) if applicable, an assignment of all the Forbes US Assets that are intangible
personal property signed by Parent and CCF a in the form of the attached Exhibit A-4 and (vi) such other, bills of sale, assignments, certificates of title, documents and other instruments of transfer and conveyance as may reasonably be
requested by Buyers, each in form and substance satisfactory to Buyer and executed by the applicable Seller (items (i)-(vi) above, collectively, the “Bills of Sale”);” 

 

	 	m.	Amended to delete Article 8.2(e) in its entirety and replace it with the following: 

“All Buyers’ Importation Costs shall have been reimbursed by Buyers and the Escrow Payment shall be released from escrow and
paid to the Sellers; and” 
  

	3.	Assignment. The Parties acknowledge and agree that Mexican Buyer has assigned all of its rights, interests and obligations with respect to purchasing the
Membership Interests under the Original Agreement as amended by this Amendment to RGV Enterprises S.A. de C.V. 

  

	4.	Representations and Warranties of the Buyers and Sellers. The Buyers and Sellers represent and warrant that they are duly authorized and empowered to
execute, deliver and perform this Amendment and all other instruments referred to or mentioned herein to which it is a party, and all action on its part requisite for the due execution, delivery and the performance of this Amendment has been duly
and effectively taken. This Amendment, when executed and delivered, will constitute valid and binding obligations of the Buyers and Sellers enforceable in accordance with its terms. 

 

	5.	Reference to and Effect on the Original Agreement. 

  

	 	a.	On and after the date hereof, each reference in the Original Agreement to “this Agreement,” “hereunder,” “hereof’, “herein” or
words of like import, shall mean and be a reference to the Original Agreement as amended hereby. 

  

	 	b.	Except as specifically amended above, the Original Agreement shall remain in full force and effect and is hereby ratified and confirmed. 

 

	6.	Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement. Signatures by facsimile shall be binding. The exchange of copies of this Agreement and of signature pages by facsimile or electronic mail transmission shall constitute effective
execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by facsimile or electronic mail shall be deemed to be their original signatures for
all purposes. 

  

	7.	 Governing Law. The interpretation and construction of this Amendment, the transactions hereunder and all matters relating hereto, are not
governed by the provisions of the United Nations Convention on Contracts for the International Sale of Goods or the United Nations Convention on the Limitation Period in the International Sale of Goods, as amended; rather, they are governed by the
laws of the State of 

 
Texas. In the event any Party shall seek enforcement of any covenant, warranty or other term or provision of this Amendment or seek to recover Damages for the Breach thereof, the Party which
prevails in such Proceedings shall be entitled to recover reasonable attorneys’ fees and expenses actually incurred by it in connection therewith. The Parties agree that this Amendment is performable in Harris County, Texas and that the sole
and exclusive venue for any Proceeding involving any claim arising under or relating to this Amendment shall be in Harris County, Texas. 
  

	8.	Final Agreement. THIS WRITTEN AMENDMENT OF THE ORIGINAL AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 

 [Signatures on Following Page] 

 IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed
and delivered effective as of the date first above written. 
  

					
		 	THE SELLERS:
		
		 	Forbes Energy Services LTD
			
	 	 	 By:
	 	/s/    John E. Crisp
			
		 	 Its:
	 	President and Chief Executive Officer

  

					
		 	Forbes Energy Services LLC
			
	 	 	 By:
	 	/s/    John E. Crisp
			
		 	 Its:
	 	President and Chief Executive Officer

  

					
		 	Forbes Energy International, LLC
			
	 	 	 By:
	 	/s/    John E. Crisp
			
		 	 Its:
	 	President and Chief Executive Officer

  

					
		 	C.C. Forbes, LLC
			
	 	 	 By:
	 	/s/    John E. Crisp
			
		 	 Its:
	 	Executive Vice President and Chief Operating Officer

  

					
		 	Forbes Energy Services de Mexico, S. de R. L. de C.V.
			
	 	 	 By:
	 	Forbes Energy Services LLC, a Shareholder
			
	 	 	 By:
	 	/s/    John E. Crisp
			
		 	 Its:
	 	President and Chief Executive Officer
			
		 	 By:
	 	Forbes Energy International, LLC, a Shareholder
			
		 	 By:
	 	/s/    John E. Crisp
			
		 	 Its:
	 	President and Chief Executive Officer

 [Signatures Continued on Following Page] 

					
		 	THE BUYERS:
		
		 	Dirivera Investments LLC
			
	 	 	 By:
	 	/s/ Cesár Rivera
			
		 	 Its:
	 	President

  

					
		 	RGV Holding, S.A. de C.V.
			
	 	 	 By:
	 	/s/ Cesár Rivera
			
		 	 Its:
	 	General Manager

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