ACQUISITION AGREEMENT (this "Agreement"), dated as  of  May
23,  1997,  between  NEW IMAGE LABORATORIES, INC.,  a  California
corporation  having  its  principal place  of  business  at  2340
Eastman  Avenue,  Oxnard, California 93031  (the  "Seller"),  THE
STEPHAN CO., a Florida corporation having its principal place  of
business at 1850 West McNab Road, Ft.  Lauderdale, Florida  33309
("Stephan") and STEPHAN DISTRIBUTING, INC., a Florida corporation
and wholly-owned subsidiary of Stephan (the "Buyer").

                      W I T N E S S E T H :

      WHEREAS,  the  Seller's  hair care businesses  include  the
products  known  as  "Image", and "Modern" and  related  products
listed on Schedule 1 hereto (collectively, the "Products");

      WHEREAS,  with  respect  to the Products,  the  Seller  has
      registered "Image" and "Modern" related trademarks  (i)  in
      the  United  States  with  the  United  States  Patent  and
      Trademark  Office (all of such registered marks are  listed
      on  Schedule l(a) and are collectively referred to  as  the
      "Domestic Trademarks") and (ii) in the countries listed  on
      Schedule  l(b) (all of such registered marks, collectively,
      the  "Foreign  Trademarks"; the  Domestic  Trademarks,  the
      Foreign   Trademarks  and  all  other   pending   trademark
      applications,    unregistered    trademarks    and    other
      intellectual  property related to the  Products  listed  on
      Schedule l(c) are sometimes referred to herein collectively
      as the "Trademarks"); and

      WHEREAS, the Seller desires to sell, and the Buyer  desires
to  acquire, all of the Seller's right, title and interest in and
to certain of the Seller's assets, as more specifically described
herein,  all  for the purchase price and on the terms  set  forth
below.

      NOW,  THEREFORE, in consideration of the premises  and  the
mutual  covenants  and agreements set forth  below,  the  parties
agree as follows:

      I.  TRANSFER OF ASSETS

      1.1 Transfer   of   Assets.   Upon  satisfaction   of   the
          conditions  set  forth in Sections 3.1 and  3.2  hereof
          (the  "Closing"), the Seller hereby sells, assigns  and
          delivers  to  the Buyer, and the Buyer hereby  acquires
          from  the Seller, all of the Seller's right, title  and
          interest in and to the following assets free and  clear
          of all liens and encumbrances:

           (a)  the Domestic Trademarks listed on Schedule  l(a),
together with the goodwill associated therewith;

         (b)    the  Foreign Trademarks listed on Schedule  l(b),
together with the goodwill associated therewith;

         (c)    all  other  Trademarks listed on  Schedule  l(c),
together with the goodwill associated therewith;

          (d) all trade dress relating to the Products;
          
          (e) the formulae, trade secrets, processes
and know-how   relating to the Products (collectively, the
"Specifications");

         (f)  the  customer and supplier lists  relating  to  the
Products;

         (g)    the 10 oz.  Bottle Contract, dated June 18, 1996,
between  the  Seller  and  Simi  Corp.  (the  "Bottle  Agreement"
including  all  rights thereunder with respect to the  mold,  all
artwork  and screens related to the Products to the extent  owned
by  the  Seller and all trade show, training and sales conference
room equipment listed on Schedule 1.1(g);

         (h)    the  contracts  listed on  Schedule  1.1(h)  (the
"Contracts");

         (i)    all inventory relating to the Products, including
all  finished  goods,  work in progress, promotional  items,  raw
materials relating to the Products and packaging relating to  the
Products, wherever located (the "Inventory");

         (j)    all  accounts receivable of the Seller listed  on
Schedule  4.1(p),  including any interest, claims  and  penalties
thereon existing on the Closing (the "Accounts Receivable");

         (k)    the  equipment described on Schedule 1.1(k)  (the
"Equipment") to the extent such Equipment is owned by the Seller,
and  to  the  extent any Equipment is leased  by  the  Seller  an
assignment of such leased Equipment, which upon the receipt of  a
consent to such assignment, shall be deemed to be leased  by  the
Buyer as of the Closing; and

         (1)    all  other  intangible or  intellectual  property
related to the Products.

      As used herein, the term "Acquired Assets" shall mean those
assets identified in Section 1.1(a) through 1.1(1) above.

      II. PURCHASE PRICE AND PAYMENT

      2.1  Purchase  Price.   The purchase price  (the  "Purchase
Price") for the Acquired Assets shall be 250,000 unregistered and
restricted shares (the "Shares") of common stock, par value  $.Ol
per share, of Stephan ("Stephan Common Stock").

      2.2 Allocation  of  Purchase Price and Additional  Payment.
          The   parties  agree  that  the  Purchase  Price,   the
          Contingent Shares (as hereafter defined), if  any,  and
          any  other  consideration paid for the Acquired  Assets
          shall  be  allocated among the Acquired Assets pursuant
          to  a  schedule to be prepared by the Buyer  with  such
          changes,  if any as agreed by the Buyer and the  Seller
          no  later than 45 days after Closing. The Buyer and the
          Seller agree to prepare and file all tax returns  in  a
          manner consistent with the allocations provided herein.
          The  Buyer  and  the Seller shall each provide  to  the
          other  for review a copy of their reports with  respect
          to  this  transaction pursuant to Section 1060  of  the
          Internal Revenue Code of 1986, as amended, at least ten
          (10)  business  days  prior to its  submission  to  the
          Internal  Revenue  Service.   In  the  event  that  the
          Internal Revenue Service shall require a change in such
          allocations, neither party shall be liable for the  tax
          consequences to the other party of such change.

      2.3  Payment of the Purchase Price.  The Purchase Price  is
being  paid  concurrent with the execution and delivery  of  this
Agreement  at  the  Closing, against  delivery  of  the  Acquired
Assets, as follows: certificates representing 125,000 Shares  are
being   delivered   by  the  Buyer  directly   to   the   Seller.
Certificates  representing  the  remaining  125,000  Shares  (the
"Escrowed  Stock")  are being delivered to  Hertzog,  Calamari  &
Gleason,  as  escrow agent (the "Escrow Agent"), to be  held  and
disbursed  in accordance with the terms of this Agreement  and  a
separate escrow agreement, in the form of Exhibit A.

      2.4 Contingent Payment.  In addition to the Purchase Price,
the   Seller   shall  be  entitled  to  receive  up  to   100,000
unregistered and restricted shares (the "Contingent  Shares")  of
Stephan  Common Stock, in accordance with the terms set forth  in
this  Section 2.4. With respect to the period commencing  on  the
Closing  and  ending  on  the one year anniversary  date  of  the
Closing (the "Initial Period") , the Seller shall be entitled  to
receive  up  to 50,000 Contingent Shares payable as follows:  (i)
10,000  Contingent Shares shall be payable to the Seller if,  and
only  if,  the  Buyer's  profit after  taxes,  as  determined  in
accordance   with   generally  accepted   accounting   principles
("GAAP"),  resulting from the operation of the business  relating
to  the  Acquired Assets ("Profit") for the Initial Period  shall
equal  at  least  13%,  (ii) 20,000 Contingent  Shares  shall  be
payable to the Seller if, and only if, the Buyer's Profit for the
Initial  Period shall equal at least 14%, (iii) 30,000 Contingent
Shares  shall  be  payable to the Seller if,  and  only  if,  the
Buyer's  Profit for the Initial Period shall equal at least  15%,
(iv) 40,000 Contingent Shares shall be payable to the Seller  if,
and  only  if,  the Buyer's Profit for the Initial  Period  shall
equal at least 16%, (v) 50,000 Contingent Shares shall be payable
to the Seller if, and only if, the Buyer's Profit for the initial
Period  shall  equal at least 17%.  With respect to the  12-month
period  ending on the two year anniversary date of  the  Closing,
50,000  Contingent Shares shall be payable to the Seller if,  and
only if, the Profit for such 12-month period shall equal 17%.

      2.5.      Delivery of Contingent Shares; Books and Records.
Certificates representing Contingent Shares shall be delivered to
the  Seller,  if  earned by the Seller pursuant  to  Section  2.4
hereof,  within 10 days of final determination of Profit for  the
relevant  period and, subject to Section 2.6  hereof,  not  later
than  60  days after the end of such period.  Subject to  Section
2.6  hereof, the Buyer's determination of Profit shall  be  final
and  binding  upon  the parties.  The Buyer  agrees  to  maintain
complete,  true  and  correct books  of  account  concerning  the
business relating to the Acquired Assets in sufficient detail  to
enable the Profit to be readily computed and verified.  The Buyer
further   agrees  to  permit  the  Seller,  its   agents   and/or
independent public accountants, to have full access to such books
of  account  (including the right to make copies thereof)  during
normal  business hours and upon reasonable notice to  the  Buyer.
The  Buyer  further  agrees to deliver to  the  Seller  a  report
detailing the Buyer's calculation of the Profit as well as a copy
of  the Buyer's consolidated audited financial statements for any
relevant  period and shall further make reasonably  available  to
the  Seller  its  work  papers utilized in  connection  with  its
calculation  of  the Profit.  The Seller hereby  agrees  to  keep
confidential  all  such  information  and  to  use  it  only   in
accordance  with  and  for the purposes  of  determining  whether
Contingent Shares are payable to the Seller.

      2.6 Arbitration.  If the Seller concludes, after review  of
the  Buyer's books of account, that, notwithstanding the  Buyer's
determination to the contrary, Contingent Shares are owing to the
Seller  with respect to the period(s) reviewed, then  the  Seller
shall  notify  the  Buyer in writing of its determination,  which
notice (the "Notice") shall set forth in detail the basis for the
Seller's  determination of Profit and that Contingent Shares  are
due and owing.  If the Seller and the Buyer are unable to resolve
the  disputed  items  within 10 business  days  after  the  Buyer
receives  the  Notice, the parties shall refer the dispute  to  a
firm  of certified public accountants mutually agreeable  to  the
parties  (the "Arbiter"), as an arbitrator to finally  determine,
as  soon  as  practicable, and in any event within 90 days  after
such  referral, the Profit for the period(s) under consideration;
provided that if the parties are unable to mutually agree upon an
Arbiter,  the  Arbiter shall be designated  by  mutual  agreement
between  the  parties' respective certified  public  accountants.
The  Arbiter shall otherwise conduct the arbitration  under  such
procedures  as the parties may agree or, failing such  agreement,
under the applicable commercial Arbitration Rules of the American
Arbitration Association. The fees and expenses of the arbitration
and the Arbiter incurred in connection with the arbitration shall
be paid by the non-prevailing party.

      2.7 Assumption of Liabilities.  As additional consideration
for  the  Acquired Assets, the Buyer hereby assumes  the  Assumed
Liabilities  (as  defined below).  All other liabilities  of  any
nature  whatsoever of the Seller shall remain  and  be  the  sole
obligation  of the Seller including, without limitation,  product
liability,  product  warranties, all  other  pending  litigation,
liabilities  related to   outstanding debentures  of  the  Seller
(the "Debentures") and liabilities for any unpaid legal fees  and
disbursements  payable to Richards, Watson &  Gershon  (the  "RWG
Liabilities")  not  included  in the  Assumed  Liabilities.   For
purposes of this Agreement, the term "Assumed Liabilities"  shall
be  defined  as  and shall be expressly limited to the  following
listed liabilities:


           (i)    unsecured   liabilities   (other    than    the
Reorganization Liabilities, as defined below) of the Seller as of
the Closing, as reflected on the books and records of the Seller,
up  to  a maximum aggregate amount not to exceed $3,600,000  (the
"Trade Liabilities") . The Trade Liabilities shall consist solely
of  the  amounts  set forth next to the names of  the  respective
suppliers  and other creditors of the Seller to whom  such  Trade
Liabilities are due, as listed on Schedule 2.7(i); and

           (ii)      unsecured liabilities (other than the  Trade
Liabilities)  owed to holders of allowed claims pursuant  to  the
plan  of  reorganization of Image Laboratories,  Inc.,  up  to  a
maximum  amount  not  to exceed $3,065,000  (the  "Reorganization
Liabilities").   The  Reorganization  Liabilities  shall  consist
solely  of  the  amounts  set forth next  to  the  names  of  the
respective  holders  of such claims to whom  such  Reorganization
Liabilities are due, as listed on Schedule 2.7(ii).

      2.8  Bulk Sales Law Compliance.  The Seller agrees  to  pay
and discharge all claims of creditors, other than claims relating
to  the  Assumed Liabilities, which may be asserted  against  the
Buyer by reason of the Seller's noncompliance with the provisions
of  the bulk sales law of any State which may require bulk  sales
law  compliance  on  account  of the provisions  herein  and  the
transactions  contemplated hereby and to indemnify and  hold  the
Buyer  harmless from and against claims suffered or  incurred  by
the  Buyer  by  reason of or arising out of the  failure  of  the
Seller  to  pay  or discharge such claims, or such  noncompliance
with any applicable bulk sales law.

      2.9.       Purchase   Price  Adjustments.   The   following
adjustments shall be made to the Purchase Price:

         (a)      Excess   Liabilities.    Notwithstanding    the
assumption by the Buyer of the Trade Liabilities up to $3,600,000
and the Reorganization Liabilities up to $3,065,000, in the event
that  the  Buyer  is required to pay in the aggregate  more  than
$5,332,000  in  order  to satisfy the Trade Liabilities  and  the
Reorganization   Liabilities,  including,   without   limitation,
incidental costs incurred by Buyer or Stephan in satisfying  such
Trade   Liabilities  and  Reorganization  Liabilities  (such   as
litigation costs), as certified in a certificate delivered to the
Seller  by  the  Chief  Financial  Officer  of  the  Buyer  which
certificate  shall  contain  an  itemized  list  of   the   Trade
Liabilities  and  the  Reorganization Liabilities,  the  original
amount  owed to each such creditor, the dates of payment to  each
creditor  and the final payment and determination of  such  Trade
Liabilities  and Reorganization Liabilities, the  Purchase  Price
shall  be  reduced by the amount of such excess on a  dollar-for-
dollar  basis; provided, however, that if any of the  holders  of
any Trade or Reorganization Liabilities shall agree to accept any
portion  of the payments over a period of time in excess  of  one
year ("Installment Payments"), the amount of such excess shall be
calculated by reducing the amount of any Installment Payments  to
their  present value, as of the Closing, using a discount  factor
equal to 8% per annum.

         (b)   Minimum Accounts Receivable.  Not earlier than 180
days  after  Closing, the Chief Financial Officer  of  the  Buyer
shall  certify in a certificate delivered to the Seller the total
amount  of Accounts Receivable collected as of the date  of  such
certificate and, in reasonable detail, a listing of the  Accounts
Receivable which remain uncollected.

If  total  collected Accounts Receivable as of the date  of  such
certificate  shall  be less than $1,835,000, the  Purchase  Price
shall  be further reduced by the amount of such deficiency  on  a
dollar-for-dollar basis.  Payments received from or  credited  to
any customer shall be applied first to the invoice identified  by
such  customer,  or if not identified, then in  payment  of  such
customer's oldest account receivable, unless such customer  shall
specifically allege that such receivable is in dispute, in  which
event  the  payment shall be applied in payment of the undisputed
portion  of such receivable and then in payment of the customer's
next   oldest   undisputed   account   receivable.    The   Buyer
specifically agrees not to influence in any way a customer to pay
an  invoice other than in the order which they have been sent  to
such customer and not to settle, compromise or reduce the amount,
or  delay the payment, of any invoice existing as of the  Closing
except in the ordinary course of business and consistent with the
Seller's  prior  practice.  The Buyer agrees  to  use  collection
procedures for the collection of the Accounts Receivable that are
substantially the same as used by the Seller prior to Closing.

         (c)    Minimum Inventory.  Not later than 30 days  after
Closing,  the Chief Financial officer of the Buyer shall  certify
in  writing  to  the Seller the net book value of  the  Inventory
based  upon a physical inventory to be conducted   after  Closing
by  the  Buyer and utilizing the same inventory valuation methods
as  used by the Seller prior to Closing. If the net book value of
the  Inventory, as so determined, shall be less than  $2,302,000,
the Purchase Price shall be further reduced by the amount of such
deficiency  on a dollar-for-dollar basis; provided, however  that
(i)  the  Buyer shall be deemed to have received $37,250 of  such
Inventory in lieu of payment for certain equipment set  forth  on
Schedule  1.1(k), (ii) the Buyer shall be deemed to have received
an  amount  of  Inventory equal to that  amount  of  the  expense
reimbursement not paid to Seller pursuant to Section  7.3  hereof
and  (iii)  any  Accounts Receivable collected by  the  Buyer  in
excess   of   $1,835,000  shall  be  credited  as  Inventory   in
determining any Inventory deficiency; provided, further, however,
that any returns from customers of Inventory shall not be counted
in  determining  the value of Inventory and any and  all  credits
required  to  be  given  to any customers or  vendors,  including
without  limitation,  any  advertising  credit,  consistent  with
Seller's prior practice shall, to the extent such credit  is  not
also deducted from the Accounts Receivable, be deducted from  the
value of the Inventory.

         (d)    Notwithstanding any payments which may be due  to
the  Buyer  by  the  Seller pursuant to  this  Section  2.9,  the
indemnification  provisions provided in Section  6  hereof  shall
remain  in  full  force and effect, without any  modification  or
diminution thereof; provided, however, that the Buyer  shall  not
be entitled to any indemnification payment pursuant to Section  6
hereof,  if, and only to the extent that, the condition or  event
giving  rise to such indemnification payment is reflected in  the
calculation  of  a  Purchase Price Adjustment  pursuant  to  this
Section 2.9.

      2.10.    Disbursements from Escrow.  Stephan, the Buyer and
the  Seller  agree  to  provide in writing to  the  Escrow  Agent
instructions as to the amount and method of disbursing the shares
of  Escrowed Stock.  Such instructions to the Escrow  Agent,  and
the  amount  of  Escrowed Stock to be distributed by  the  Escrow
Agent,  shall  be  in  accordance with the  following  terms  and
conditions:


           (i)  all amounts in escrow shall be disbursed  to  the
Seller  on  the  one year anniversary date of  the  Closing  (the
"Disbursement  Date");  provided,  however,  if  prior   to   the
Disbursement  Date  the Buyer makes a claim against  the  amounts
remaining  in escrow pursuant to subsection (ii) of this  Section
2.10,  or  if  prior to the Disbursement Date the Buyer  makes  a
claim  against the amounts in escrow pursuant to subsection (iii)
of this Section 2.10, then Escrowed Stock having a value equal to
the amount of each such claim shall be held in escrow (beyond the
Disbursement Date, if necessary) until joint written instructions
from  Stephan, the Buyer and the Seller or an order of any  court
of  law  having jurisdiction over such claim or the order  of  an
arbitrator  selected  by Stephan, the Buyer  and  the  Seller  to
arbitrate  the  dispute shall be received  by  the  Escrow  Agent
regarding the resolution of such claims and amounts;

           (ii)  If,  prior to the Disbursement Date,  the  Buyer
makes  a  claim against the Seller pursuant to Section 6  hereof,
then the Buyer shall notify the Escrow Agent in writing prior  to
the  Disbursement Date of the amount of such claim and the Escrow
Agent  will reserve in escrow (beyond the Disbursement  Date,  if
necessary) Escrowed Stock having a value equal to the  amount  of
such  claim  until  such time as the Escrow Agent  shall  receive
joint written instructions from the Buyer, Stephan and the Seller
or  an  order of any court of law having jurisdiction  over  such
claim  or  the order of an arbitrator selected by Stephan,  Buyer
and  the Seller to arbitrate the dispute regarding the resolution
of such claim and such amounts;

           (iii)  If, prior to the Disbursement Date, the  Escrow
Agent  receives written notice from the Buyer, a  copy  of  which
notice  shall be sent simultaneously by the Buyer to the  Seller,
as  to a Purchase Price adjustment determined in accordance  with
Section 2.9 hereof, then, Escrowed Stock having a value equal  to
such  Purchase Price adjustment shall be distributed to the Buyer
within  10 business days of such written notice unless a  written
notice  is received by the Escrow Agent from the Seller disputing
such  Purchase  Price adjustment in which case the  Escrow  Agent
will  reserve  in  escrow  (beyond  the  Disbursement  Date,   if
necessary) Escrowed Stock having a value equal to the  amount  of
such  disputed Purchase Price adjustment until such time  as  the
Escrow  Agent shall receive joint written instructions  from  the
Buyer,  Stephan and the Seller or an order of any  court  of  law
having  jurisdiction over such claim regarding the resolution  of
such claim and such amounts;

           (iv)      Any  time a claim is made under  subsections
(ii) or (iii) of this Section 2.10, the Escrow Agent will reserve
Escrowed Stock having a value equal to the dollar amount of  such
claim.  The value of Escrowed Stock required to be reserved shall
be  determined by reference to the average closing trading  price
of  Stephan  Common Stock as reported in The Wall Street  Journal
(or  other  recognized  daily financial  newspaper)  for  the  20
trading  days prior to the one year anniversary of  the  date  of
Closing.

      2.11     Registration Rights.  If, following the receipt by
the  Seller of (i) the Shares delivered to the Seller at Closing,
(ii)  any  Escrowed Stock which has been disbursed to the  Seller
pursuant  to  Section  2.10  of  this  Agreement  or  (iii)   any
Contingent  Shares received by the Seller, Stephan shall  propose
to  file  a  registration statement under the Securities  Act  of
1933,  as  amended (the "Securities Act") in connection with  the
proposed  offer  and sale of any of its equity securities  (other
than  a  registration statement on Form S-4 and  Form  S-8  or  a
successor  form  to  such Forms), Stephan  will  give  notice  in
writing  to such effect to the Seller at least 30 days  prior  to
such  filing,  and,  at the written request of  the  Seller  made
within  10  days after the receipt of such notice,  will  include
therein  at Stephan's cost and expense (except for the  fees  and
expenses  of  counsel  to the Seller and underwriting  discounts,
commissions   and  filing  fees  attributable  to  the   Seller's
securities included in such registration statement, all of  which
expenses shall be borne by the Seller), such number of shares  of
Stephan  Common Stock included in clauses (i), (ii) or  (iii)  of
this  Section 2.11 (the "Registrable Securities") as  the  Seller
shall  request unless at the time of such request the Registrable
Securities  shall  be  able  to be  sold  pursuant  to  Rule  144
promulgated under the Securities Act, in which case Stephan shall
not  be  required  to  register any such Registrable  Securities.
Notwithstanding  the foregoing, if the offering being  registered
by  Stephan is underwritten, and if in the good faith judgment of
the  representative  of the underwriters of  such  offering,  the
inclusion  therein  of all or any of such Registrable  Securities
would  reduce the number of shares to be offered by Stephan,  the
number of Registrable Securities otherwise to be included in  the
underwritten public offering may be reduced accordingly.  Nothing
contained herein shall prohibit Stephan from withdrawing any such
registration statement at any time in its sole discretion.

                          III.  CLOSING

      3.1  Deliveries at the Closing by the Seller.  At  Closing,
the  Seller  hereby transfers to the Buyer, or is causing  to  be
transferred to the Buyer, all of its (or its affiliates')  right,
title and interest in and to the Acquired Assets by delivering to
the,  Buyer  possession of the Acquired Assets and the  following
instruments,  which  shall  be in form and  substance  reasonably
satisfactory to the Buyer and its counsel:

          (a) a Bill of Sale and Assignment;

          (b) Trademark Assignments in the form of Exhibit B  for
              recording the assignment of the Domestic Trademarks
              listed on Schedule 1(a) in the United States Patent
              and  Trademark  Office, and  an  Omnibus  Trademark
              Assignment  relating  to  the  assignment  of   the
              Foreign Trademarks;

          (c) the Escrow Agreement;

          (d) any  written Specifications, including all formulae
              for each of the Products;

           (e)  such other instruments of conveyance and transfer
as  may  be appropriate to vest all of the Seller's right,  title
and  interest  in  and  to the Acquired Assets  (other  than  the
Inventory) in the Buyer;

         (f) the customer and supplier lists;

         (g) any  Consents (as defined in Section 4.1(d)  hereof)
             including,  without limitation,  Consents  of  third
             parties  to  the transfer of computer  hardware  and
             software  comprising part of the Equipment  and  UCC
             termination  statements and such other documents  as
             requested  by  the Buyer evidencing release  of  all
             liens on the Acquired Assets;

         (h)    the  General Release of Stephan,  the  Buyer  and
their respective affiliates, in the form of Exhibit 3.lA.

         (i)   a unanimous written consent of the stockholders of
the  Seller  consenting to the transactions  set  forth  in  this
Agreement  or in the absence of a unanimous written  consent  the
consent of a majority of all outstanding classes of Stock of  the
Seller  and an opinion from Richards, Watson & Gershon,  or  such
other  counsel to Seller reasonably satisfactory to  Stephan  and
Buyer,  that the requisite consent under California law has  been
obtained to consummate the transactions contemplated hereby;

         (j)    a  consent  and  release from  the  four  largest
holders of the Seller's Debentures constituting at least $900,000
of  the outstanding principal amount of the Debentures, and  from
Richards, Watson & Gershon with respect to the RWG Liabilities in
the forms attached hereto as Exhibit 3.lC; and

         (k)   a letter from Robert Bass as the representative of
the  Reorganization  Liabilities that he has recommended  to  the
holders of the Reorganization Liabilities to reduce their  claims
to  an  amount  equal to 80% of such Liabilities  (the  "Adjusted
Claim") in return for the Buyer paying 55% of the Adjusted  Claim
within 30 days of the Closing, 22.5% of the Adjusted Claim within
four months of the Closing and 22.5% of the Adjusted Claim within
eight months of the Closing.

      3.2  Deliveries  at  the Closing  by  the  Buyer.   At  the
Closing, the Buyer hereby delivers to the Seller:

         (a)    125,000 Shares with the remaining 125,000  Shares
to be delivered to the Escrow Agent;

          (b) the Escrow Agreement;

          (c) Notice of Voluntary Dismissal with Prejudice of the
              litigation (Case No. 97-6331-CIV-Ferguson)  pending
              in   the  U.S.  District  Court  for  the  Southern
              District of Florida; and

         (d)   the   General  Release  of  the  Seller  and   its
affiliates, in the form of Exhibit 3.lB.

      3.3  Place  of  Delivery.   Any physical  assets,  such  as
Inventory or Equipment, delivered to the Buyer hereunder shall be
delivered at the Seller's place of business.  Any costs  involved
in  shipping  such physical assets to a location  chosen  by  the
Buyer  shall  be  borne by the Buyer; provided, that  the  Seller
shall  allow the Buyer to store such physical assets at the  site
such assets are located on the Closing date for 90 days following
the Closing at no additional cost to the Buyer.

      3.4   Conditions   to  Closing.  The  parties'   respective
obligations  to  close  hereunder shall be conditioned  upon  the
receipt  by  each party of all items required to be delivered  by
the other party as set forth above in Sections 3.1 and 3.2, which
receipt may be waived in writing by either party.

      3.5  No  Shop.   Upon  execution of  this  Agreement  until
Closing  or termination of this Agreement by mutual agreement  of
the  parties,  the  Seller  agrees that  it  will  not  initiate,
entertain, discuss, solicit or accept any offer for the  sale  of
any capital stock and/or the assets of the Seller (except for the
sale  of  the  Seller's real property and any other assets  other
than   the   Acquired  Assets)  and  the  Seller  shall  promptly
communicate to Buyer the terms of any such offer it receives  and
the  identity of the person making any such offer and  shall  not
continue  to  discuss or negotiate any such  offers  it  received
prior to the date hereof.

      IV. REPRESENTATIONS AND WARRANTIES

      4.1 Representations and Warranties of the Seller.
The Seller represents and warrants to the Buyer and to Stephan as
follows:

         (a)    Organization.  The Seller is a  corporation  duly
organized, validly existing and in good standing under  the  laws
of  the State of California and has all requisite power to  enter
into this Agreement and perform its obligations hereunder.

         (b)    Authorization  of Agreement;  Investment  Intent.
The  Seller  has taken all necessary corporate action  (including
obtaining   any  necessary  approval  of  its  stockholders)   to
authorize  the  execution,  delivery  and  performance  of   this
Agreement  and the consummation of the transactions  contemplated
hereby.   This  Agreement has been duly and  validly  authorized,
executed  and delivered by the Seller and constitutes the  legal,
valid  and  binding  obligation of  the  Seller,  enforceable  in
accordance  with  its  terms except as such  enforcement  may  be
limited  by  bankruptcy, insolvency, moratorium or other  similar
laws  presently or hereafter in effect affecting the  enforcement
of  creditors'  rights  generally.  The  Seller  understands  and
agrees  that (i) an investment in Stephan involves certain risks,
the  Seller  has  taken full cognizance of and  understands  such
risks,  the  Seller has been furnished with copies  of  Stephan's
most  recent  annual  report  and all  subsequent  quarterly  and
current  reports  required to be filed under  applicable  federal
securities  laws  and  the Seller is an accredited  investor  (as
defined  in  the  Securities  Act),  (ii)  the  Shares  and   the
Contingent  Shares,  if any, have not been registered  under  the
Securities  Act, and agrees that none of such securities  may  be
sold,  offered  for sale, transferred, pledged,  hypothecated  or
otherwise  disposed of except in compliance with  the  Securities
Act,  (iii)  no federal of state agency has made any  finding  or
determination  as  to  the fairness for  investment  in,  or  any
recommendation or endorsement of, such securities, and  (iv)  the
Shares   and  the  Contingent  Shares,  if  any,  being  acquired
hereunder  are being acquired by the Seller solely  for  its  own
account,  for  investment  purposes  and  not  with  a  view   to
subdivision, distribution or resale.

         (c)    Effect of Agreement.  The execution, delivery and
performance  of this Agreement by the Seller and consummation  of
the  transactions contemplated hereby will not, with  or  without
the  giving of notice, or the lapse of time, or both (i)  violate
or   conflict  with  any  provision  of  law,  statute,  rule  or
regulation  to  which  the Seller is subject  including,  without
limitation,  any  Federal  or  state bankruptcy,  reorganization,
insolvency,  receivership,  liquidation,  fraudulent  conveyance,
bulk  sales,  corporate  or  other  similar  law  protecting   or
benefiting  the stockholders or creditors of a corporation,  (ii)
violate  any  judgment,  order,  writ  or  decree  of  any  court
applicable  to the Seller, or (iii) result in the  breach  of  or
conflict  with  any term, covenant, condition  or  provision  of,
result  in  the  modification  or termination  of,  constitute  a
default  under,  or result in the creation or imposition  of  any
lien,  security interest, charge or encumbrance upon any  of  the
Acquired  Assets  pursuant  to  any  corporate  charter,  by-law,
commitment,  contract or other agreement or instrument  to  which
the  Seller is a party or by which any of the Acquired Assets  is
or may be bound or affected.

         (d)    Consents.   Except for consents of third  parties
which  have  been obtained and are being delivered to  the  Buyer
with this Agreement, no consent, authorization or approval of, or
exemption by, any governmental or public body or authority or any
other  entity  or  person  is required  in  connection  with  the
execution,  delivery  and  performance  by  the  Seller  of  this
Agreement or any of the instruments or agreements herein referred
to or the taking of any action herein contemplated ("Consents").
         
         (e)    No Liens or Encumbrances.  The Seller has and  is
delivering to the Buyer good and marketable title to the Acquired
Assets,  free and clear of all mortgages, claims, liens,  charges
and  encumbrances.   The  Seller does  not  know  of  any  liens,
encumbrances  or imperfections of title relating to the  Acquired
Assets.

          (f)    Intellectual  Property.   There  are  no   other
 trademarks or trade names, trade name rights or service marks or
 other  intellectual  property used by the Seller  in  connection
 with  the Products that are not included in the Acquired Assets.
 The  validity of such items and the title thereto of the  Seller
 have  not  been  questioned  in any litigation  or  governmental
 inquiry or proceeding to which the Seller or any predecessor, is
 or  was  a party, and, to the knowledge of the Seller,  no  such
 litigation,  governmental inquiry or proceeding  is  threatened.
 To  the knowledge of the Seller, the conduct of the business  of
 the  Seller with respect to the Products as presently  conducted
 does  not  conflict  with  any licenses,  trademarks,  trademark
 rights, trade names, trade name rights, service marks or patents
 of any other person in any respect.

          (g)  Trademarks.  Schedules l(a), l(b) and l(c) contain
 a true and complete list of all of the Trademarks, including for
 each  registered  trademark,  the  application  or  registration
 number,  filing or registration and expiration date,  mark,  and
 class.   To the knowledge of the Seller, the Trademarks  do  not
 infringe the trademarks of any person and the Seller (i) has not
 granted  rights  to  any  other  person  with  respect  to   the
 Trademarks,  (ii) has no knowledge of any claim of  use  by  any
 other  person of the Trademarks, (iii) has no knowledge  of  any
 rights  of any person which would adversely affect the right  of
 the  Buyer to use the Trademarks, (iv) does not use any variants
 of  the Trademarks that are confusingly similar to or likely  to
 cause  confusion  with  the Trademarks, (v)  does  not  use  the
 Trademarks by consent or agreement with any person and (vi) does
 not  know  of any claims or demands which have been asserted  by
 any  person  pertaining to the Trademarks and  to  the  Seller's
 knowledge, the Trademarks are not being infringed by any person.

          (h)   Permits, Licenses,-etc. (i) No permits, licenses,
 orders   or  approvals  of  Federal,  state,  local  or  foreign
 governmental  or  regulatory bodies are  required  in  order  to
 permit  the  manufacture  or distribution  of  the  Products  as
 currently  manufactured and distributed by the Seller  and  (ii)
 the  manufacture and distribution of the Products  as  currently
 manufactured and distributed by the Seller does not  violate  or
 infringe  any  Federal, state, local or foreign laws,  statutes,
 ordinances or regulations.

         (i)   Litigation.   Except  as  set  forth  on  schedule
4.1(i), there is no claim, action, suit, proceeding, arbitration,
or  to  the  knowledge of the Seller, investigation  or  inquiry,
pending  before any Federal, state, municipal, foreign  or  other
court  or governmental or administrative body or agency,  or  any
private  arbitration  tribunal or,  to  the  Seller's  knowledge,
threatened, against, relating to or affecting the Products or the
transactions  contemplated by this Agreement.   During  the  past
three  (3) years, there have been no recalls with respect to  the
Products  as  a  result of safety concerns or noncompliance  with
applicable  law  or otherwise.  Except as set forth  on  Schedule
4.1(i),  there  is not currently pending any unresolved  customer
dispute  which,  if adversely determined, could have  a  material
adverse  effect  on  future sales of any of  the  Products.   The
Seller  is  not  aware of any problem or potential  problem  with
respect  to any Product whether relating to its safety, efficacy,
shelf  life  or  otherwise.   The Seller  has  not  provided  any
warranty  of any kind with respect to any Product to  any  party,
other than warranties implied by law.

         (j)    Trade Secrets; Confidential Information.  To  the
best knowledge of the Seller, the Products do not make use of any
trade secrets or confidential information of any third person.

         (k)    Bulk  Sale.  The transfer of the Acquired  Assets
will not constitute a "bulk sale", as such term is defined in the
Uniform Commercial Code of the State of California.

         (1)   Financial Statements.. Attached as Schedule 4.1(1)
are sales reports (as defined in Schedule 4.1(1)) for each of the
Products  for  the  years  ended  December  31,  1995  and  1996.
Schedule  4.1(1) was accurately prepared in all material respects
in  accordance with GAAP from the books and records of the Seller
in  accordance  with  the internal accounting  practices  of  the
Seller.

         (m)   Sales Data.  The Seller has delivered to the Buyer
the sales data with respect to the Products for the period ending
March  31,  1997.   All  of such sales  data  was,  as  of  their
respective  dates,  true  and correct in all  material  respects.
Additionally, except as set forth on Schedule 4.1(m), the  Seller
is not aware, with respect to any of the Products that any of the
top  twenty U.S. customers and the top fifteen foreign  customers
with  respect  to  the Products intends not to continue  carrying
such Product or materially decrease its orders therefore

         (n)    Contracts and Commitments.  The Bottle  Agreement
and   the  Contracts  constitute  all  contracts  or  commitments
(whether   written   or   oral)   with   distributors,   brokers,
manufacturer's representatives, sales representatives,  customers
and other persons, firms, corporations and other entities engaged
in  the sale, distribution, supply or manufacture of the Products
except for contracts and commitments which are terminable  on  30
days'  (or less) prior written notice without further obligation.
No  Contract  to which the Seller is a party or to  which  it  is
subject or by which it is bound requires the consent of any other
person  by reason of the execution and delivery of this Agreement
and  the  consummation  of the transactions contemplated  hereby.
Other than purchase and sale orders, each of the Contracts  is  a
valid  and  subsisting Contract of all of the parties thereto  in
full  force  and  effect without modification.   The  Seller  has
performed all obligations required to be performed by it  and  is
not  in  default  under any Contract and no  event  has  occurred
thereunder which, with or without the lapse of time or the giving
of  notice, or both, would constitute a default by it thereunder.
To  the  knowledge of the Seller, no other party  is  in  default
under any such Contract, instrument or other document.  Except as
set forth in Schedule 4.1(n), no amounts are due and owing by the
Seller  under  such  Contracts.  Other  than  purchase  and  sale
orders,  no  Contract has been orally modified or  amended.   All
purchase  orders and sale orders have been made in  the  ordinary
course  of  the Seller's business consistent with past practices.
None of the stockholders, officers or directors of the Seller  or
any affiliate or associate thereof is a party to or subject to or
bound by any Contract.

         (o)    Inventory.  Except as disclosed in  Schedule  4.1
(o),  the  Inventory has been valued on the books and records  of
the  Seller in accordance with the Seller's standard  cost.   The
Inventory  consists (i) of finished product which  will  be  non-
obsolete, comply with any warranty customarily given to customers
with respect to such Inventory and be good and salable and of the
same type and product dress as then being generally marketed  and
distributed and (ii) of generally acceptable quality of  work-in-
process,  raw  and packaging material which will be  non-obsolete
and capable generally of being processed at ordinary costs and by
ordinary  procedures into finished goods that  will  be  in  good
merchantable condition.

         (p)     Accounts   Receivable.   All  of  the   Accounts
Receivable   represent   accounts  and   notes   receivable   for
merchandise  actually  delivered or  services  actually  provided
relating  to  the Products, are actual and bona fide  receivables
and  have  arisen  in the ordinary course of business,  represent
obligations  for the total dollar amounts thereof  shown  on  the
books  of  the Seller and have been billed consistent  with  past
practice.  All such Accounts Receivable are fully collectible  in
the  normal and ordinary course of business, except to the extent
of a reserve in an amount not in excess of a reserve for doubtful
accounts consistent with past practices of the Seller.  There are
no  recoupments,  set-offs or counterclaims in  respect  of  such
receivables  except for third party adjustments  consistent  with
past practice which occur in the ordinary course of business  and
which  are  not, in the aggregate, material in amount.   Schedule
4.1(p)  sets  forth  (i) the total amount of Accounts  Receivable
outstanding  as of May 14, 1997, by account debtor and  (ii)  the
agings of such receivables based on the following schedule:  0-30
days, 31-60 days, 61-90 days, and over 90 days, from the due date
thereof.

         (q)   No Misrepresentations.  Neither this Agreement nor
any  agreement  entered into in connection with the  transactions
contemplated  by  this  Agreement  nor  any  document   delivered
hereunder  or  thereunder  contains any  untrue  statement  of  a
material fact or omits to state a material fact necessary to make
the  statements  contained herein or therein,  in  light  of  the
circumstances under which they were made, not misleading.

         (r)   No Brokers or Finders. Except for any fees due and
payable  to  Houlihan,  Smith & Company, Inc.  which  the  Seller
hereby acknowledges and agrees is the sole responsibility of  the
Seller, no agent, broker, person or firm acting on behalf of  the
Seller  is  or  shall  be  entitled to  a  brokerage  commission,
finder's fee, or other like payment in connection with any of the
transactions contemplated hereby.

      4.2 Representations and Warranties of the Buyer.  The Buyer
represents and warrants to the Seller as follows:

         (a)    Organization.   The Buyer is a  corporation  duly
organized, validly existing and in good standing under  the  laws
of the State of Florida and has all requisite power to enter into
this Agreement and perform its obligations hereunder.

         (b)    Authorization of Agreement.  The Buyer has  taken
all  necessary  corporate  action  to  authorize  the  execution,
delivery  and  performance of this Agreement and the consummation
of the transactions contemplated hereby.  This Agreement has been
duly  and validly authorized, executed and delivered by the Buyer
and  constitutes the legal, valid and binding obligation  of  the
Buyer,  enforceable in accordance with its terms except  as  such
enforcement may be limited by bankruptcy, insolvency,  moratorium
or  other similar laws presently or hereafter in effect affecting
the enforcement of creditors' rights generally.

         (c)   Effect of Agreement,.  The execution, delivery and
performance  of  this Agreement by the Buyer and consummation  of
the  transactions contemplated hereby will not, with  or  without
the  giving of notice, or the lapse of time, or both (i)  violate
any  provision of law, statute, rule or regulation to  which  the
Buyer  is  subject,  (ii) violate any judgment,  order,  writ  or
decree  of any court applicable to the Buyer, or (iii) result  in
the  breach of or conflict with any term, covenant, condition  or
provision  of,  result  in the modification  or  termination  of,
constitute  a  default  under,  or  result  in  the  creation  or
imposition  of any lien, security interest, charge or encumbrance
upon  any  of  the  Buyer's property pursuant  to  any  corporate
charter,  by-law,  commitment, contract  or  other  agreement  or
instrument to which the Buyer is a party or by which any  of  its
property is or may be bound or affected.

         (d)    Consents.  No consent, authorization or  approval
of, or exemption by, any governmental or public body or authority
or  any other entity or person is required in connection with the
execution,  delivery  and  performance  by  the  Buyer  of   this
Agreement or any of the instruments or agreements herein referred
to or the taking of any action herein contemplated.

         (e)   No Misrepresentations.  Neither this Agreement nor
any   other  agreement  entered  into  in  connection  with   the
transactions  contemplated  by this Agreement  nor  any  document
delivered  hereunder or thereunder contains any untrue  statement
of a material fact or omits to state a material fact necessary to
make the statements contained herein or therein, in light of  the
circumstances under which they were made, not misleading.

      V. ADDITIONAL COVENANTS OF THE PARTIES

      5.1  Further Documents.  The Seller shall execute,  deliver
and  acknowledge  all such further documents and  instruments  of
transfer and conveyance in such jurisdictions, and do and perform
all  such  acts  and  other things as the  Buyer  may  reasonably
request, to vest in the Buyer title to the Acquired Assets.  Upon
the  request of the Buyer, the Seller agrees promptly to  prepare
at  its  expense all country assignment documents and  powers  of
attorney  for  delivery to Buyer for recordation of  the  various
Foreign   Trademarks.   The  Buyer  will  record  the   trademark
assignment  documents in the United States Patent  and  Trademark
Office  and,  if  and when it so determines, in  all  such  other
applicable foreign government offices.  The Seller and the  Buyer
shall  each  bear 50% of all of the fees and expenses related  to
such  recordation of assignments in the United States Patent  and
Trademark Office and all of the fees and expenses related to such
recordation  of  assignments  in such  other  applicable  foreign
government offices.

      5.2 Manufacture and Supply Agreement.  The parties agree to
negotiate  in  good  faith,  at  the  request  of  the  Buyer,  a
Manufacture and Supply Agreement pursuant to which Seller  shall,
for a mutually agreed upon period of time, if the Seller is able,
manufacture Products for the Buyer.

      5.3 Exploitation of Other Territories; Non-Compete.  The
      Seller agrees that it will not (i) register any marks which
      are identical or substantially similar to the Trademarks in
      any foreign countries or (ii) market any professional hair
      care products substantially similar to the Products in
      connection with the exploitation or marketing of hair care
      products by or on behalf of the Seller or any of its
      affiliates.

      5.4  Sales Taxes.  The Seller and the Buyer shall each bear
50%  of  all sales, transfer, use and other similar taxes payable
in connection with the sale of the Acquired Assets.

      5.5  Distributors and Manufacturers.  The Seller  will  use
its  best  efforts  to  assist the Buyer in arranging  for  those
distributors currently selling one or more Products on behalf  of
the  Seller  and for those manufacturers currently  manufacturing
one  or more Products, to continue to do so after the Closing for
the benefit of the Buyer.  In that regard, to the extent any such
arrangement might otherwise cause a conflict for such distributor
or manufacturer with an existing agreement, policy or practice of
the Seller, the Seller shall waive same.

      5.6  Customers.  The customer list referred to  in  Section
1.1(f) shall contain those parties having purchased Products from
the  Seller  during the twelve (12) months prior to the  Closing,
regardless  of quantity or frequency, and shall be true,  correct
and complete in all material respects.

      5.7 Cooperation.  The Seller will cooperate with the Buyer,
and  the  Seller will use its best efforts to have the  officers,
directors  and other employees of the Seller cooperate  with  the
Buyer,  at  the  Buyer's request and expense, on  and  after  the
Closing,  in endeavoring to effect the collection of the Accounts
Receivable included in the Acquired Assets and the settlement, to
the  satisfaction  of the Buyer, of the Assumed Liabilities,  and
shall  furnish  information, evidence,  testimony,  records,  tax
returns  and  other  assistance in connection with  any  actions,
proceedings, arrangements or disputes involving the Seller and/or
the Buyer and based upon contracts, arrangements, commitments  or
acts  of the Seller which were in effect or occurred on or  prior
to the Closing.

      5.8  Authorization; Mail.  The Seller agrees that the Buyer
shall have the right and authority to collect for the account  of
the Buyer all Accounts Receivable and other items which shall  be
transferred to the Buyer as provided herein, and to endorse  with
the name of the Seller any checks received on account of any such
receivables  or  other items.  The Seller  agrees  that  it  will
promptly  transfer  and deliver to the Buyer any  cash  or  other
property  that  the  Seller may receive in respect  of  any  such
receivables  or other items.  The Seller authorizes and  empowers
the  Buyer  from  and  after the date hereof (i)  notify  account
debtors of the change in ownership (ii) to receive and open  mail
addressed  to  the  Seller and (iii) to deal  with  the  contents
thereof in any manner the Buyer sees fit, provided such mail  and
the  contents thereof relate to the Acquired Assets or  otherwise
to  the business of the Seller, as conducted by the Buyer  or  to
any of the Assumed Liabilities.  The Seller agrees to deliver  to
the  Buyer  promptly  upon  receipt any  mail,  checks  or  other
documents  received  by it pertaining to the Acquired  Assets  or
otherwise  to  the  business of the Seller, as conducted  by  the
Buyer,  or  any of the Assumed Liabilities.  The Buyer agrees  to
deliver to the Seller any mail which it receives to which  it  is
not  entitled  by  reason of this Agreement or otherwise  and  to
which the Seller is entitled.

      5.9  Transfer  of  Securities.  The  Seller  covenants  and
agrees  that  the Shares and the Contingent Shares, if  any,  may
only  be  transferred  in  compliance  with  this  Agreement  and
applicable Federal and state securities laws and upon receipt  of
an  opinion  of  counsel,  which opinion  and  counsel  shall  be
reasonably   acceptable  to  Stephan,  that  an  exemption   from
registration  of such Shares under the Securities Act  and  under
any  applicable state securities laws is available.   All  Shares
and  Contingent Shares, if any, received by the Seller  hereunder
shall bear the legend set forth below:

       "The  securities represented by this certificate (i)  have
       not  been registered under the Securities Act of  1933  or
       under any state securities or "blue sky" laws, and may not
       be  offered  or sold except pursuant to (x)  an  effective
       registration  statement under such Act and such  laws,  or
       (y)  an opinion of counsel reasonably satisfactory to  the
       issuer, that an exemption from registration under such Act
       and  such  laws is available and (ii) are subject  to  the
       terms  and  conditions set forth in a certain  Acquisition
       Agreement  between  New  Image  Laboratories,  Inc.,   The
       Stephan Company and Stephan Distributing, Inc."

      5.10  Sales.   The Seller hereby agrees that any  sales  of
Products made by the Seller after the execution of this Agreement
but  prior to Closing shall be deemed, for all purposes, to  have
been made by the Buyer.

      VI. INDEMNIFICATION

      6.1 Indemnification.   Each  party  agrees  to   indemnify,
          defend   and   hold  harmless  the  other  party,   its
          affiliates  and  their respective officers,  directors,
          employees  and  agents from and  against,  or  pay  and
          reimburse,   any  and  all  loss,  liability,   damage,
          deficiency,  costs  and  expenses  (including,  without
          limitation,   interest,   penalties   and    reasonable
          attorneys' fees and disbursements incurred in enforcing
          its  rights  hereunder) (collectively, "Loss")  arising
          out of or otherwise in respect of any inaccuracy in  or
          any breach of any representation, warranty, covenant or
          agreement  (including the Buyer's agreement  to  assume
          the  Assumed Liabilities and the Seller's agreement  to
          be responsible for all other liabilities) of such party
          contained  in this Agreement, whether in respect  of  a
          third  party  action or otherwise.   Additionally,  the
          Seller agrees to indemnify, defend and hold Stephan and
          the Buyer, their respective affiliates and their
          respective  officers, directors, employees and  agents,
          harmless  from  and against, or pay and reimburse,  any
          and  all  Loss arising in connection with the ownership
          or  use  of  the  Acquired Assets  (including,  without
          limitation, any Loss attributable to product  liability
          or  warranty claims), or resulting from or arising  out
          of  any liability or obligation of the Seller or any of
          its  affiliates,  prior to the  date  of  the  Closing,
          whether   in  respect  of  a  third-party   action   or
          otherwise, and each of Stephan and the Buyer agrees  to
          indemnify,  defend and hold the Seller, its  affiliates
          and their respective officers, directors, employees and
          agents,   harmless  from  and  against,  or   pay   and
          reimburse, any and all Loss arising in connection  with
          the ownership or use of the Acquired Assets (including,
          without  limitation, any Loss attributable  to  product
          liability  or  warranty claims), or resulting  from  or
          arising  out  of  any liability or  obligation  of  the
          Buyer, on or after the date of the Closing, whether  in
          respect of a third-party action or otherwise.  Promptly
          after receipt by a party of notice of any claim or  the
          commencement  of any action or proceeding,  such  party
          will,  if  a claim with respect thereto is to  be  made
          against   the   other   party  obligated   to   provide
          indemnification (the "Indemnifying Party") pursuant  to
          this  Article  VI, give the Indemnifying Party  written
          notice of such claim or the commencement of such action
          or  proceeding.  The Indemnifying Party shall have  the
          right,  at its option, to compromise or defend, at  its
          own  expense  and by its own counsel, any  such  matter
          involving  the asserted liability.  If the Indemnifying
          Party shall undertake to compromise or defend any  such
          asserted liability, it shall promptly notify the  other
          party  in  writing  of  its  intention  to  do  so  and
          unconditionally   acknowledge  in   such   notice   its
          obligation to fully indemnify such party, and the party
          seeking indemnification shall cooperate fully with  the
          Indemnifying  Party  and  its  counsel  in  the  prompt
          compromise  of, or defense against, any  such  asserted
          liability.   In any event, the party being  indemnified
          shall  have the right at its own expense to participate
          in  the  defense  of such asserted liability.   If  the
          Indemnifying  Party does not promptly  acknowledge  its
          obligation to indemnify and assume the defense  of  any
          such  asserted  liability, the other party  may  defend
          against  such asserted liability in such manner  as  it
          may  deem  appropriate, including, but not limited  to,
          settling such claim, after giving written notice of the
          same  to the Indemnifying Party, on such terms  as  the
          other  party may deem appropriate, and the Indemnifying
          Party  shall  have the right, at its  own  expense,  to
          participate in the defense of such asserted  liability.
          If the Indemnifying party thereafter seeks to question
         the  manner  in  which  the other  party  defended  such
          asserted liability or the amount or nature of any  such
          settlement,  the  Indemnifying  Party  shall  have  the
          burden to prove that the conduct of the other party  in
          the   defense   and/or  settlement  of  such   asserted
          liability  constituted  gross  negligence  or   willful
          misconduct.

      6.2 Recovery.  While the Escrowed Stock is still in escrow,
the  Buyer  shall first satisfy any amounts owed  to  it  by  the
Seller pursuant to Section 2.9 and Section 6.1 hereof out of such
Escrowed  Stock according to the procedures set forth in  Section
2.10  hereof.  If there is no Escrowed Stock remaining, the Buyer
may  set-off, appropriate and apply any amounts owed to it by the
Seller pursuant to Sections 2.9 and 6.1 out of Contingent Shares,
if any.  The Buyer hereby agrees to promptly notify Seller of any
such  set-off  and  the  grounds  therefor.   The  value  of  the
Contingent Shares set off pursuant to this Section 6.2  shall  be
determined by reference to the average closing trading  price  of
Stephan  Common Stock as reported in the Wall Street Journal  (or
other  recognized daily financial newspaper) for the  20  trading
days  prior  to  the date such Contingent Shares,  if  any,  were
earned  by  the  Seller.   Buyer shall not  be  entitled  to  any
indemnification payment pursuant to Section 6.1, if, and only  to
the  extent  that, the conditions or event giving  rise  to  such
indemnification  payment  is  reflected  in  a   Purchase   Price
adjustment pursuant to Section 2.9.

      6.3  Maximum  Recovery.  Notwithstanding  anything  to  the
contrary set forth in this Agreement, the Buyer acknowledges  and
agrees  that  the  sole remedy available to  it  to  recover  any
amounts  owed  to it pursuant to Section 2.9 and Section  6.1  of
this  Agreement  shall  be  out of the  Escrowed  Stock  and  the
Contingent Shares.

      VII.     MISCELLANEOUS

7.1   Further  Assurances.  The parties shall do and  perform  or
cause  to be done and performed all such further acts and  things
and   shall  execute  and  deliver  all  such  other  agreements,
certificates,  instruments  and  documents  as  any   party   may
reasonably  request  in  order  to  carry  out  the  intent   and
accomplish the purposes of this Agreement and the Consummation of
the   transactions   contemplated   hereby   including,   without
limitation,   prosecuting  all  pending  trademark  applications,
subject  to  the  Buyer's obligation to bear 50%  of  such  costs
pursuant to Section 5.1 hereof.

      7.2  Finders Fees.  Each party (a) represents and  warrants
that  it  has not taken and will not take any action which  would
cause the other party to have any obligation or liability to  any
person for finders' fees, brokerage fees, agents, commissions  or
like  payments in connection with the execution and  delivery  of
this   Agreement   or  the  consummation  of   the   transactions
contemplated  hereby, and (b) agrees to indemnify  and  hold  the
other  party  harmless for any loss, liability, cost or  expense,
including, without limitation, legal expenses arising out of  the
breach   or  inaccuracy  of  the  foregoing  representation   and
warranty.

      7.3  Expenses.  Each party shall pay the fees and  expenses
of  its respective counsel, accountants and agents and all  other
expenses  incurred  by such party incident  to  the  negotiation,
preparation,   execution,  delivery  and  performance   of   this
Agreement; provided, however, that the Buyer shall pay the Seller
$40,000  in cash not later than 45 days after Closing  to  defray
the  Seller's  expenses;  Provided,  that  if  a  deficiency   of
Inventory  exists  on  such date Buyer  shall  deduct  from  such
$40,000 an amount equal to such deficiency and the remainder,  if
any, shall be paid to the Seller.  The parties agree that the non-
prevailing  party shall bear all costs and expenses  incurred  in
connection with any dispute regarding this Agreement between  the
parties.

      7.4   Survival  of  Representations  and  Warranties.   The
representations  and  warranties  contained  herein  or  in   any
instrument  or  document delivered or to  be  delivered  pursuant
hereto  shall survive until two years from the Closing; provided,
however,  that the representation and warranty of the Seller  set
forth  in  Section 4.1(e) relating to title shall  survive  until
three  years  from  the Closing and; provided, further,  however,
that   nothing  contained  in  this  Agreement  shall  limit   or
constitute  a  waiver by Stephen or the Buyer  of  any  of  their
rights or remedies based on fraud.

      7.5 Notices.  All notices and other communications required
or  permitted to be given under this Agreement ("Communications")
shall  be in writing and shall be deemed to have been duly  given
if  delivered  personally with receipt acknowledged  or  sent  by
registered  or  certified mail, return receipt requested,  or  by
overnight courier for next day delivery, to the parties and  such
parties' counsel at their respective addresses set forth below or
to  such  other  or  additional address  as  either  party  shall
hereafter specify by Communication to the other, or by telecopier
to  the parties at their respective telecopier numbers set  forth
below  or  to  such other or additional numbers as  either  party
shall hereafter specify by Communication to the other party:

                      If to the Seller to:

                       New Image Laboratories
                       2340 Eastman Avenue
                       Oxnard, California 93031
                       Telecopier No.: (805) 988-4542
                       Attn:  Wally Jones, President

          with a copy to:

                   Richards, Watson & Gershon
                    333 South Hope Street, 38th Floor
                    Los Angeles, California 90071-1469
                    Telecopier No.: (213) 626-0078
                    Attn: Timothy L. Neufeld, Esq.

          If to the Buyer to:

                    The Stephan Co.
                    1850 West McNab Road
                    Ft. Lauderdale, Florida 33309
                    Telecopier No.:(954) 971-9903
                    Attn: Mr. Frank F. Ferola
                          President


                         with a copy to:
                                
                         Hertzog, Calamari and Gleason
                         100 Park Avenue
                         New York, New York 10016
                         Telecopier No.: (212) 213-1199
                         Attn: Stephen A. Ollendorff, Esq.
                               Richard S. Frazer, Esq.

      Notice  of change of address or telecopier number shall  be
deemed  given  when actually received or upon refusal  to  accept
delivery  thereof; all other communications shall  be  deemed  to
have  been  given  and  received on the  earliest  of:  (a)  when
actually received or upon refusal to accept delivery thereof, (b)
on  the date when delivered personally or sent by telecopier, (c)
one  (1)  business  day  after sending  by  recognized  overnight
courier,  or  (d)  four  (4)  business  days  after  mailing,  as
aforesaid.

      7.6  Assignment.   Neither the Seller nor the  Buyer  shall
have  the  right,  on  or prior to the Closing,  to  assign  this
Agreement  nor  any of their respective rights hereunder  without
the prior written consent of the other.

      7.7  Binding Effect; Benefits.  This Agreement shall  inure
to the benefit of and shall be binding upon the parties and their
respective  successors and permitted assigns.   Nothing  in  this
Agreement,  expressed or implied, is intended  to  or  shall  (a)
confer  on any person other than the parties, or their respective
successors   or   permitted  assigns,   any   rights,   remedies,
obligations or liabilities under or by reason of this  Agreement,
or (b) constitute the parties partners or participants in a joint
venture.

      7.8  Amendments  and Waivers.  This Agreement  may  not  be
modified or amended except by an instrument in writing signed  by
the  party  against whom enforcement of any such modification  or
amendment  is  sought.  Either party may,  by  an  instrument  in
writing,  waive compliance by any other party with  any  term  or
provision of this Agreement on the part of such other party to be
performed or complied with.  The waiver by a party of a breach of
any term or provision of this Agreement shall not be construed as
a waiver of any subsequent breach.

      7.9  Governing Law.  This Agreement shall be construed  and
governed  in  accordance with the laws of the State  of  Florida,
without giving effect to the choice of law principles thereof.

      7.10      Consent to Jurisdiction. (a) With respect to  any
action  commenced  by the Seller against the Buyer  hereunder  or
under  any  other document delivered pursuant to this  Agreement,
the  Buyer  (i) consents and submits to the jurisdiction  of  the
Courts  of the State of California or of the Courts of the United
States of America for the Central District of California for  all
purposes  of  this Agreement, including, without limitation,  any
action or proceeding instituted for the enforcement of any right,
remedy,  obligation and liability arising under or by  reason  of
this Agreement and (ii) consents and submits to the venue of such
action  or proceeding in the City and County of Ventura (or  such
judicial  district  of  a  Court of the United  States  as  shall
include the same).

      (b)  With  respect to any action commenced by the Buyer  or
Stephan  against the Seller hereunder or under any other document
delivered pursuant to this Agreement, the Seller (i) consents and
submits to the jurisdiction of the Courts of the State of Florida
or of the Courts of the United States of America for the Southern
District   of  Florida  for  all  purposes  of  this   Agreement,
including,   without   limitation,  any  action   or   proceeding
instituted  for the enforcement of any right, remedy,  obligation
and  liability  arising under or by reason of this Agreement  and
(ii)  consents  and  submits  to the  venue  of  such  action  or
proceeding  in  the City and County of Broward (or such  judicial
district  of  a Court of the United States as shall  include  the
same).

      7.11      Severability.   Any term  or  provision  of  this
Agreement  which is invalid or unenforceable in any  jurisdiction
shall,  as to such jurisdiction, be ineffective to the extent  of
such invalidity or unenforceability without rendering invalid  or
unenforceable  the  remaining  terms  and  provisions   of   this
Agreement or affecting the validity or enforceability of  any  of
the   terms  or  provisions  of  this  Agreement  in  any   other
jurisdiction.

      7.12      Counterparts.  This Agreement may be executed  in
any  number  of counterparts, each of which shall  be  deemed  an
original, but all of which together shall constitute one and  the
same instrument.

      7.13      Entire Agreement.  This Agreement (together  with
the   other   agreements,  instruments  and  documents  delivered
pursuant  hereto)  constitutes the  entire  agreement  among  the
parties  hereto  with respect to the subject matter  hereof,  and
supersedes  all  prior  agreements and understandings,  oral  and
written,  among  the parties hereto with respect to  the  subject
matter hereof including without limitation that certain Letter of
Intent,  dated  February  14, 1997, and that  certain  Letter  of
Intent dated April 7, 1997, each between Stephan and the Seller.

      7.14  Confidentiality.  The Seller shall not discuss  with,
or  disclose  to, any other person or entity the  terms  of  this
Agreement  without the prior written consent of the Buyer  unless
required  to  by  a  court order issued by a court  of  competent
jurisdiction,  provided  that Stephan  and  the  Buyer  shall  be
provided notice and an opportunity to contest such order.

      7.15     (a) Termination.  This Agreement may be terminated
at any time prior to the Closing by any of the following:

                    (i)    By  mutual  written agreement  of  the
Seller, the Buyer and Stephan;

                   (ii)  By either the Seller or the Buyer if the
Closing has not occurred by May 31, 1997, upon written notice  by
such terminating party, provided that at the time such notice  is
given  a  material  breach of this Agreement by such  terminating
party shall not be the principal reason for the Closing's failure
to occur;

                    (iii) By the Buyer, by written notice to  the
Seller, if there has been a material violation or breach  of  any
of  the  Seller's  covenants  or agreements  made  herein  or  in
connection herewith or if any representation or warranty  of  the
Seller  made  herein  or  in connection  herewith  proves  to  be
materially inaccurate or misleading; or

                    (iv)  By the Seller, by written notice to the
Buyer, if there has been a material violation or breach of any of
the  Buyer's or Stephan's covenants or agreements made herein  or
in  connection herewith or if the representation or  warranty  of
the Buyer or Stephan made herein or in connection herewith proves
to be materially inaccurate or misleading.

          (b)   Effect  of  Termination.  If  this  Agreement  is
terminated  pursuant to Paragraph (a) above then  this  Agreement
shall  herewith  become void and there shall be no  liability  or
obligation on the part of any party hereto; provided, that if the
Buyer  terminates this Agreement pursuant to paragraph (a)  (iii)
above  or  if  the Seller terminates this Agreement  pursuant  to
paragraph (a) (iv) above, the non-terminating party shall  remain
liable for any breach of this Agreement.

      7.16       Seller's  Acknowledgment.   The  Seller   hereby
acknowledges  that  as  of May 14, 1997 there  is  a  preliminary
deficiency in Accounts Receivable and Inventory at least equal to
$335,000  and $372,000, respectively.  The Seller and  the  Buyer
hereby  further  acknowledge that nothing in the  prior  sentence
shall  be  construed as an admission by either of them  that  the
above  deficiencies  are  the actual deficiencies  and  that  the
deficiencies  may not be lesser or greater.  The Seller,  Stephan
and the Buyer specifically agree that if the deficiency uncovered
by  the  Buyer or Stephan following the Closing pursuant  to  the
procedures set forth in Section 2.9(b) and (c), respectively,  is
greater  or  lesser than the deficiency set forth  in  the  first
sentence  of  this Section 7.16, that such amount  shall  be  the
correct  adjustment to the Purchase Price as set forth in Section
2.9.  Nothing in this Section 7.16 shall be deemed to be a waiver
of  any  rights of Stephan, the Seller, or the Buyer pursuant  to
this Agreement.
                                

      IN  WITNESS WHEREOF, the Seller, Stephan and the Buyer have
caused  this Agreement to be signed in their respective names  by
one  of their officers thereunto duly authorized, as of the  date
first above written.


                   NEW IMAGE LABORATORIES, INC.



                   By: Wally B. Jones
                       Name:  Wallace B. Jones
                       Title: CEO & President

                   THE STEPHAN CO.



                   By: Frank F. Ferola
                       Name:  Frank F. Ferola
                       Title: President


                   STEPHAN DISTRIBUTING, INC.


                  By:  Frank F. Ferola
                       Name:  Frank F. Ferola
                       Title: President








                   BILL OF SALE AND ASSIGNMENT


      BILL  OF  SALE, dated as of June 26, 1997, from  NEW  IMAGE
LABORATORIES,  INC., a California corporation (the "Seller"),  to
STEPHAN DISTRIBUTING, INC., a Florida corporation (the "Buyer").

      WHEREAS,  the  Buyer and the Seller have  entered  into  an
agreement   dated  as  of  the  date  hereof  (the   "Acquisition
Agreement") providing for the sale and transfer to the  Buyer  of
certain  of the properties, assets and rights of the Seller,  all
as more fully described in the Acquisition Agreement.

      NOW, THEREFORE, in consideration of One ($1.00) Dollar  and
other  good and valuable consideration paid by the Buyer  to  the
Seller,  the receipt of which is hereby acknowledged, the  Seller
hereby  sells,  transfers  and  conveys  to  the  Buyer  and  its
successors  and  assigns, all of the Seller's  right,  title  and
interest  in and to the properties, assets, contracts and  rights
described  in  Section  1.1  of the  Acquisition  Agreement  (the
"Acquired Assets").

      TO  HAVE AND TO HOLD the properties, assets, contracts  and
rights  hereby assigned, transferred and conveyed unto the  Buyer
and its successors and assigns, forever.

      The Seller, from time to time, if so required by the Buyer,
will  execute and deliver such further instruments of conveyance,
transfer, assignment and confirmation and take such other actions
as  the Buyer may reasonably request in order to more effectively
grant,  bargain,  sell, convey, assign, transfer,  set  over  and
deliver all of the Seller's right, title and interest in  and  to
the Acquired Assets.

      The  Seller does hereby authorize and empower the Buyer  to
collect and receive all of the Seller's right, title and interest
in  the Acquired Assets, to sue for and take any other action the
Buyer  may  deem  appropriate in law or in  equity  in  order  to
enforce this Bill of Sale and to enjoy all of the Seller's right,
title and interest in and to the Acquired Assets.

      This  Bill of Sale is being delivered subject to  and  with
the   benefit   of  the  respective  representations  warranties,
covenants,  terms,  conditions  and  other  provisions   of   the
Acquisition Agreement.

      This  Bill  of Sale shall be governed by and construed  and
enforced  in accordance with the laws of the State of  California
without  regard  to conflicts of law rules.  This  Bill  of  Sale
shall  be binding upon the Seller and its successors and  assigns
and  shall  inure to the benefit of the Buyer and its  successors
and assigns.

      IN WITNESS WHEREOF, the Seller has executed this Bill of
Sale as of the day and year set forth above.


                   NEW IMAGE LABORATORIES, INC.



                   By: Wally B. Jones
                   Name: Wallace B. Jones
                   Title: CEO & President





















                                               UNITED STATES
                      TRADEMARK ASSIGNMENT

         THIS  ASSIGNMENT is made on the 26th day of June,  1997,
between  New  Image  Laboratories, Inc., a corporation  organized
under  the  laws of the State of California, with  its  principal
place  of  business  at 2340 Eastman Avenue,  Oxnard,  California
93031 (the "Assignor"), and Stephan Distributing, Inc., a Florida
corporation  organized under the laws of the  State  of  Florida,
with its principal place of business at 1850 West McNab Road, Ft.
Lauderdale, Florida 33309 (the "Assignee").

         WHEREAS,  the Assignor is the proprietor in  the  United
States  of the common law trademarks, trademark applications  and
registrations  listed  in  the  Schedule  attached  hereto   (the
"Trademarks"); and

         WHEREAS, pursuant to an Acquisition Agreement dated  May
23,   1997,   between   Assignor   and   Assignee   ("Acquisition
Agreement"), the Assignor wishes to sell and the Assignee  wishes
to  acquire all of the Assignor's rights in and to the Trademarks
and the goodwill associated therewith.

         NOW, THEREFORE, in consideration of the mutual covenants
and promises contained in the Acquisition Agreement, the Assignor
hereby  unconditionally assigns, transfers  and  conveys  to  the
Assignee  all its rights, title and interests to the  Trademarks,
together   with  the  goodwill  associated  therewith   and   all
applications and registrations and any renewals thereof listed in
the  Schedule and any common law rights thereto and  any  related
rights  based  on  use  including  the  right  to  sue  for  past
infringement.
                                        

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

                              ASSIGNOR:

                               NEW IMAGE LABORATORIES, INC.

                              BY: Wallace B. Jones
                                    Name: Wallace B. Jones
                                  Title:  CEO & President

                                 ASSIGNEE:

                                 STEPHAN DISTRIBUTING, INC.


                                 By:______________________
                               Name:
                               Title:
                                                                     
                                                                     
                                                                     
                                                                     
                                                                     
                                                                     
                                                                     
                                                              FOREIGN
                      TRADEMARK ASSIGNMENT

         THIS  ASSIGNMENT is made on the 26th day of June,  1997,
between  New  Image  Laboratories, Inc., a corporation  organized
under  the  laws of the State of California, with  its  principal
place  of  business  at 2340 Eastman Avenue,  Oxnard,  California
93031 (the "Assignor"), and Stephan Distributing, Inc., a Florida
corporation  organized under the laws of the  State  of  Florida,
with its principal place of business at 1850 West McNab Road, Ft.
Lauderdale, Florida 33309 (the "Assignee").

         WHEREAS, the Assignor is the proprietor in the countries
listed  on  the  Schedule  attached  hereto  of  the  common  law
trademarks,  trademark applications and registrations  listed  in
the Schedule (the "Trademarks"); and

         WHEREAS, pursuant to an Acquisition Agreement dated  May
23,   1997,   between   Assignor   and   Assignee   ("Acquisition
Agreement"), the Assignor wishes to sell and the Assignee  wishes
to  acquire all of the Assignor's rights in and to the Trademarks
and the goodwill associated therewith.

         NOW, THEREFORE, in consideration of the mutual covenants
and promises contained in the Acquisition Agreement, the Assignor
hereby  unconditionally assigns, transfers  and  conveys  to  the
Assignee  all its rights, title and interests to the  Trademarks,
together   with  the  goodwill  associated  therewith   and   all
applications and registrations and any renewals thereof listed in
the  Schedule and any common law rights thereto in the  countries
listed  on  the  Schedule and any related  rights  based  on  use
including the right to sue for past infringement.

         IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
                            ASSIGNOR:

                            NEW IMAGE LABORATORIES, INC.


                               By: Wallace B. Jones
                               Name:  Wallace B. Jones
                               Title: CEO & President
                            ASSIGNEE:

                            STEPHAN DISTRIBUTING, INC.



                                By: ________________
                                Name:
                                Title:











                   LIQUIDATING TRUST AGREEMENT


   This  Liquidating Trust Agreement (the "Agreement") is entered
into  by  and  among New Image Laboratories, Inc.,  a  California
corporation ("New Image"), The Stephan Co., a Florida corporation
("Stephan"),  Stephan Distributing, Inc., a  Florida  corporation
("SDI"),  and  Robert L. Berger & Associates, Inc., a  California
corporation,  as  liquidating trustee (the "Trustee"),  with  the
approval of the Continuing Creditors' Committee (the "Committee")
established under the "Third Amended Joint Plan of Reorganization
under   Chapter   II   of  the  Bankruptcy  Code"   (the   "Image
Reorganization Plan") confirmed in the chapter II bankruptcy case
(the "Chapter 11 Case") of Image Laboratories, Inc., a California
corporation ("Image"), with reference to the following facts  and
recitations:

    A. New  Image is a manufacturer and distributor of hair  care
       products  which include, among others, the  product  lines
       known as "Image" and "Modern" (the "Product Lines").

    B. SDI  has agreed to purchase from New Image, and New  Image
       has  agreed to sell to SDI, the Product Lines and  certain
       assets  related  to the Product Lines (the "Acquisition"),
       on  the  terms and conditions set forth in the Acquisition
       Agreement  (the "Acquisition Agreement") among New  Image,
       Stephan,  and SDI which has been entered into concurrently
       with the execution of this Agreement.

   C.      Pursuant to the Image Reorganization Plan and  certain
agreements  executed  by New Image in connection  therewith,  New
Image previously assumed the obligation to pay "General Unsecured
Claims" of Image, as defined in the Image Reorganization Plan, as
duly  allowed in the Chapter II Case, on the terms and conditions
and to the extent set forth in the Image Reorganization Plan (the
"Old Bankruptcy Debt").  The Committee was established under  the
Image Reorganization Plan for the purpose of, among other things,
pursuing  the best interests of the holders of the Old Bankruptcy
Debt.

   D.     The unpaid principal balance of the Old Bankruptcy Debt
is  approximately  $3,065,000.00.  There  are  approximately  378
holders of Old Bankruptcy Debt.  Attached hereto as Exhibit A and
incorporated herein by this reference is a list of holders of the
Old   Bankruptcy  Debt  and  the  corresponding  amount  of   Old
Bankruptcy Debt owed to each such holder.

   E.      In  addition to the Old Bankruptcy Debt, New Image  is
indebted  to  trade creditors and other unsecured creditors  (the
"New  Trade  Debt")  in  the  approximate  principal  amount   of
$3,600,000.00. There are approximately 340 holders of  New  Trade
Debt.   Attached hereto as Exhibit B and incorporated  herein  by
this reference is a list of holders of the New Trade Debt and the
corresponding amount of New Trade Debt owed to each  such  holder
as reflected in the books and records of New Image.

   F.      In  conjunction  with  and  in  consideration  of  the
Acquisition, Stephan and SDI have agreed with New Image  and  the
Committee,  after negotiations, to provide for the Old Bankruptcy
Debt  and  the  New Trade Debt in the manner set  forth  in  this
Agreement.

   G.      The Trustee has agreed to accept the trust established
by  this Agreement and to administer the trust in accordance with
the express instructions set forth in this Agreement.

  NOW,  THEREFORE, IT IS HEREBY AGREED BY AND AMONG  THE  PARTIES
  HERETO, AS FOLLOWS:

     1.  Concurrently with and as a condition to the consummation
  of  the  Acquisition in the manner set forth in the Acquisition
  Agreement  and  the transfer of the ownership  of  the  Product
  Lines and related assets comprising the Acquisition to SDI (the
  "Closing"),  Stephan and SDI shall deposit the  following  with
  the Trustee:

        a.      an  irrevocable standby letter of credit  in  the
    amount  of  $2,932,600.00, duly issued by  NationsBank,  N.A.
    (South) in favor of the Trustee as beneficiary, and otherwise
    in  the  form  attached hereto as Exhibit C (the  "Letter  of
    Credit"); and

        b.      the duly executed joint and several unconditional
    promissory  note of Stephan and SDI payable to the  order  of
    the  Trustee,  in  the  principal  amount  of  $2,399,400.00,
    payable  without  interest  in  two  equal  installments   of
    $1,199,700.00   each  on  the  120th  day  and   240th   day,
    respectively,  after the Closing Date, and otherwise  in  the
    form attached hereto as Exhibit D (the "Note").

    2.     The Trustee shall hold the Letter of Credit, the Note,
 and  all  payments received by the Trustee under this  Agreement
 (except the Trustee's compensation and reimbursement of expenses
 pursuant  to  Paragraph 13 below), including without  limitation
 all payments on account of the Letter of Credit and all payments
 on  account  of  the  Note, in trust on the  express  terms  and
 conditions  set  forth in this Agreement.  All disbursements  of
 funds  by  the Trustee shall be in accordance with  the  express
 instructions contained in this Agreement.  All undisbursed funds
 shall  be  held by the Trustee in a segregated, interest-bearing
 trust   account  (the  "Holding  Account")  at  Union  Bank   of
 California.  All disbursements by the Trustee shall be by checks
 drawn   upon   a   segregated,  trust  checking   account   (the
 "Disbursement  Account") at Union Bank of  California.   Stephan
 shall be entitled to all interest earned on the trust funds  and
 shall furnish the Trustee its taxpayer identification number for
 the  reporting  of all such interest. New Image  shall  have  no
 interest  whatsoever in any assets of the trust or any  proceeds
 thereof

           3  .  On  the  Closing Date or as soon as  practicable
         thereafter, New Image shall cause to be mailed  to  each
         holder  of Old Bankruptcy Debt, as fisted on Exhibit  A,
         and  to  each  holder of New Trade Debt,  as  listed  on
         Exhibit D, copies of the following:

       a.  the  "Consent and Release" in the form attached hereto
   as Exhibit E (the "Consent and Release");

       b.  the  letter  from the Committee in the  form  attached
   hereto as Exhibit F (the "Committee Letter"); and

         C. the letter from New Image in the form attached hereto
            as Exhibit H.

          4.   On the Closing Date, the Committee shall cause to
         be deposited with the Trustee a duly executed Consent
         and Release from each member of the Committee in respect
         of both the Old Bankruptcy Debt and the New Trade Debt,
         if any, held by such member.  On the Closing Date, the
         Committee shall deliver to New Image the Committee
         Letter duly executed on behalf of the Committee.  On and
         after the Closing Date, the Committee shall use
         reasonable efforts to urge each holder of Old Bankruptcy
         Debt and each holder of new Trade Debt to execute and
         deposit with the Trustee a Consent and Release.


    5.     On and after the Closing Date, the Trustee shall  make
 disbursements from the funds held in trust under this  Agreement
 to  each  holder  of Old Bankruptcy Debt who duly  executes  and
 deposits  with  the Trustee a Consent and Release  and  to  each
 holder of new Trade Debt who duly executes and deposits with the
 Trustee   a   Consent  and  Release  (collectively,  "Consenting
 Creditors"),  at  the times and in the amounts  and  manner  set
 forth  in  this  Agreement.  Each Consent and Release  shall  be
 accompanied by invoices, purchase orders, delivery receipts, and
 similar  documentation evidencing the validity of the  claim  of
 the Consenting Creditor.  Each Consenting Creditor shall send  a
 copy   of   its   Consent  and  Release  and  all   accompanying
 documentation directly to Stephan, concurrently with  depositing
 the  original  thereof with the Trustee.  In the  event  Stephan
 shall  notify the Trustee in writing that a Consenting  Creditor
 failed  to  send  a  copy of its Consent  and  Release  and  all
 accompanying  documentation to Stephan, the Trustee  shall  mail
 such copy to Stephan before making any further disbursements  to
 such  Consenting  Creditor.  Each Consenting Creditor  shall  be
 entitled  to disbursements under this Agreement aggregating  80%
 of the "Allowed Amount" (as defined in Paragraph 7 below) of the
 claim  of  such  Consenting Creditor,  in  full  settlement  and
 satisfaction of such claim.  No disbursements shall be  made  to
 any creditor or purported creditor (a "Non-consenting Creditor")
 who does not duly execute and deposit with the Trustee a Consent
 and  Release,  and  no Non-Consenting creditor  shall  have  any
 interest  whatsoever in any of the assets of the  trust  or  any
 proceeds thereof

   6.      For  each duly executed Consent and Release  deposited
with  the  Trustee,  the Trustee shall prepare  an  initial  cash
disbursement ("Initial Disbursement") in an amount equal  to  44%
of  the  lesser  of (i) the amount indicated on the  Consent  and
Release as "Amount of Claim" (the "Claimed Amount"), and (E)  the
amount listed (the "Listed Amount") for the holder of such  claim
on Exhibit A (in the case of Old Bankruptcy Debt) or on Exhibit B
(in  the case of new Trade Debt).  The Trustee shall process  the
Initial  Disbursement for each Consenting  Creditor  as  soon  as
practicable  after the date of deposit with the Trustee  of  such
Consenting Creditor's duly executed Consent and Release.  On  the
seventh  day  following  the Closing,  and  at  weekly  intervals
thereafter  as necessary, the Trustee shall provide  Stephan,  by
confirmed  telecopy  in  accordance with Paragraph  18  below,  a
schedule,  by  creditor, of the amounts  necessary  to  fund  the
Initial Disbursements then payable, and Stephan shall provide the
funds necessary to make such Initial Disbursements by effecting a
wire  transfer to the Holding Account no later than  the  seventh
day  following  its receipt of each such schedule.   The  Trustee
shall  make  each Initial Disbursement promptly upon confirmation
of  receipt of each corresponding wire transfer from Stephan.  In
the  event  that Stephan shall fail timely to effect  a  required
wire  transfer, the Trustee shall be entitled to  draw  upon  the
Letter  of  Credit,  in  the manner specified  therein,  for  the
required funds which Stephan shall have failed to transfer to the
Trustee.

   7.      Within sixty days after receipt by Stephan of the copy
of  each  Consent  and  Release  and  accompanying  documentation
required  to  be sent to Stephan Pursuant to Paragraph  5  above,
Stephan  shall notify the Trustee whether or not Stephan  intends
to  dispute  the  Claimed Amount therein.  If  Stephan  does  not
notify the Trustee that Stephan disputes the Claimed Amount, then
the  Claimed  Amount  shall  be deemed  the  Allowed  Amount  for
purposes of this Agreement.  If Stephan notifies the Trustee that
Stephan  disputes the Claimed Amount (a "Disputed  Claim"),  then
Stephan  shall  send  to the Trustee and to  the  holder  of  the
Disputed Claim a written objection to the Claimed Amount, stating
in  reasonable  detail the grounds for its objection,  and  shall
send  to  the  holder  of  the  Disputed  Claim  a  copy  of  the
"Description of Dispute Resolution Procedure" attached hereto  as
Exhibit  I.  Resolution of the Disputed Claim  shall  proceed  in
accordance  with the Description of Dispute Resolution Procedure.
If  at  any  time a consensual resolution of the amount  of  such
Disputed  Claim  is  reached, as evidenced  by  a  joint  written
instruction  to  the  Trustee executed  by  the  holder  of  such
Disputed  Claim and by Stephan, the agreed-upon amount  shall  be
deemed   the  Allowed  Amount,  and  such  claim  shall   receive
disbursements on account of the Allowed Amount in accordance with
this  Agreement.   If no consensual resolution of  such  Disputed
Claim is reached, then the Allowed Amount shall be determined  by
binding arbitration in accordance with the Description of dispute
Resolution Procedures, and such claim shall receive disbursements
on  account  of  the  Allowed  Amount  in  accordance  with  this
Agreement.

    8.     The Trustee shall make the following disbursements  to
 each  holder  of a claim for which the Allowed Amount  has  been
 determined as set forth in Paragraph 7 above:

        a. If  the  Allowed Amount of such claim is greater  than
           the  Listed  Amount, then the Trustee shall supplement
           the  Initial Disbursement by processing an  additional
           disbursement  ("Supplemental   Disbursement")  in   an
           amount  equal  to the difference between  44%  of  the
           Allowed   Amount  of  such   claim  and  the   Initial
           Disbursement  previously  made  by  the  Trustee  with
           respect to such claim.  The Trustee shall process each
           Supplemental Disbursement as soon as practicable after
           the determination of such Allowed Amount.  The Trustee
           shall  provide  Stephan,  by  confirmed  telecopy   in
           accordance with Paragraph 18 below, a schedule of  the
           amounts    necessary   to   fund   the    Supplemental
           Disbursements then payable, and Stephan shall  provide
           the   funds   necessary  to  make  such   Supplemental
           Disbursements  by  effecting a wire  transfer  to  the
           Holding Account no later than the second business  day
           following  its  receipt of each  such  schedule.   The
           Trustee  shall  make  each  Supplemental  Disbursement
           promptly   upon  confirmation  of  receipt   of   each
           corresponding  wire  transfer from  Stephan.   In  the
           event  Stephan shall fail timely to effect a  required
           wire  transfer, the Trustee shall be entitled to  draw
           upon the Letter of Credit for the required funds which
           Stephan shall have failed to transfer to the Trustee.

                  b.      If  the Listed Amount of such Claim  is
           greater  than  the  Allowed Amount, then  the  Trustee
           shall     recover  44%  of the excess  of  the  Listed
           Amount  over  the  Allowed Amount  by  deducting  such
           excess  from the next disbursements due to the  holder
           of such claim under Sub-paragraphs 8c and 8d below.

       C. The Trustee shall disburse 18% of the Allowed Amount of
   such  claim in cash from the first installment payment on  the
   Note,  on  the later of the date of receipt by the Trustee  of
   payment of such first installment or the date of determination
   of  such  Allowed Amount, or as soon as reasonably practicable
   thereafter; and

         d.  The Trustee shall disburse 18% of the Allowed Amount
         of  such  claim  in  cash  from the  second  installment
         payment on the Note, on the later of the date of receipt
         by  the  Trustee of payment of   such second installment
         or  the date of determination of such Allowed Amount, or
         as soon as reasonably practicable thereafter.

    9. For  purposes  of all disbursements under this  Agreement,
       the  Allowed  Amount  shall  exclude  any  interest,  late
       charges,  penalties, attorneys' fees or costs,  collection
       costs, or any other amounts related to any failure by  New
       Image  to  make timely payment.  Execution of the  Consent
       and  Release shall be deemed a waiver and release  of  all
       such excluded amounts.

   10.     Stephan  and SDI shall have no obligation  under  this
Agreement to deposit with the Trustee any funds other than (i) up
to   $2,932,600.00   to  fund  the  Initial   Disbursements   and
Supplemental  Disbursements, (ii) the amounts payable  under  the
Note,  and  (iii)  one-third  of the Trustee's  compensation  and
reimbursement of out-of-pocket expenses as provided in  Paragraph
13  below. At Stephan's written request, the amount of the Letter
of  Credit  may be reduced, from time to time, to  a  new  amount
equal  to $2,932,600.00 less the aggregate amount of all  Initial
Disbursements and all Supplemental Disbursements as of  the  date
of  such reduction as reflected in the biweekly reports issued by
the Trustee pursuant to Paragraph 12 below.  In the event Stephan
requests  such a reduction, the Trustee shall provide  reasonable
cooperation in facilitating such reduction, provided that Stephan
shall pay all fees of the issuer of the Letter of Credit and  all
expenses incurred by the Trustee in effecting such reduction.  In
the  event the aggregate of the Allowed Amounts of the claims  of
the  holders of New Trade Debt, as finally determined  after  the
implementation  of  the  Dispute  Resolution  Procedure  for  any
Disputed Claims, exceeds $3,600,000.00, then New Image shall  pay
to  the  Trustee, in cash, 80% of such excess amount as and  when
required by the Trustee to make the disbursements required  under
this Agreement, and the Trustee shall utilize such funds from New
Image to augment the funds available for making disbursements  as
required under this Agreement.

    11.    On  the  first  anniversary of the Closing  Date,  the
 Trustee  shall  refund to Stephan all surplus funds  and  earned
 interest  held  in  the trust, if any.  Any funds  reserved  for
 unresolved  Disputed  Claims shall not be deemed  surplus  funds
 available  for refund.  To the extent additional funds  held  in
 the  trust may become surplus funds, or additional interest  may
 be  earned, after the first anniversary of the Closing Date, the
 Trustee  shall  refund  any such funds  to  Stephan  at  monthly
 intervals  thereafter.  In the event there remain any unresolved
 Disputed  Claims  as of the expiration date  of  the  Letter  of
 Credit,  Stephan shall cause the Letter of Credit to be extended
 in  a  reduced  amount equal to at least 44%  of  the  aggregate
 Claimed  Amounts  of the outstanding unresolved Disputed  Claims
 less   the   aggregate  amounts  of  any  Initial  Distributions
 previously  paid  on  account  of  such  Disputed  Claims   (the
 "Required Extension Amount").  If the Trustee shall not  receive
 written  confirmation of such extension by  the  issuer  of  the
 Letter  of  Credit by the fifteenth day prior to the  expiration
 date of the Letter of Credit, then the Trustee shall be entitled
 to  draw  on  the  Letter of Credit in an amount  equal  to  the
 Required Extension Amount.

    12.    The  Trustee shall provide bi-weekly  reports  of  its
 receipts  and  disbursements  to New  Image,  Stephan,  and  the
 Committee,  so  long as any assets remain  in  the  trust.   The
 Trustee  shall  provide  a  final report  of  its  receipts  and
 disbursements  and  of  the disposition of  all  claims  at  the
 conclusion of its administration of the trust.

    13.    The  Trustee  shall receive a fee  in  the  amount  of
 $22,500.00  as  full  compensation for its  services  and  shall
 additionally be reimbursed for its reasonable and necessary out-
 of-pocket  expenses (including premiums for any  fidelity  bond,
 postage,  overnight delivery charges, messenger service charges,
 printing,  photocopying, long distance telephone, telecopy,  and
 similar  expenses).   Unless  otherwise  agreed  by  Stephan  in
 writing,  the Trustee shall cause a fidelity bond in the  amount
 of  $3,000,000.00 to be issued and remain in effect so  long  as
 any  funds remain in the trust.  The Trustee has determined that
 the  premium for such bond for the initial one-year period  will
 be  $3,475.00.  The  compensation and reimbursement  under  this
 Paragraph 13 shall be paid one-third by New Image, one-third  by
 Stephan, and one-third by the Consenting Creditors (by deduction
 from  the  earliest  disbursements  otherwise  payable  to  such
 Consenting  Creditors  on  a pro-rata  basis).   New  Image  and
 Stephan  shall  each deposit $9,000.00 with the Trustee  on  the
 Closing  Date  on account of their respective obligations  under
 this  Paragraph  13.  The Trustee shall not have  or  incur  any
 liability to any person or entity for any act taken or  omission
 made in good faith in connection with the administration of  the
 trust  under  this Agreement, absent negligence  or  intentional
 misconduct.  In the event the Trustee is required to take  legal
 action  to  collect on the Letter of Credit or on  the  Note  or
 otherwise  to  enforce  this  Agreement,  the  Trustee  will  be
 entitled   to   retain   special  counsel  (including,   without
 limitation, counsel for the Committee) as a reimbursable expense
 of the trust.

    14.    New Image shall cooperate with, and provide reasonable
 assistance  to, the Trustee in its administration of  the  trust
 under this Agreement.  Without limiting the foregoing, New Image
 shall  make  available  to  the  Trustee  its  accounts  payable
 records,  including computerized records, relating  to  the  New
 Trade  Debt,  and the services of at least one accounts  payable
 clerk familiar with such records.


    15.    The  parties hereto shall execute such other documents
 and  take  such other actions as may be reasonably necessary  to
 effectuate  the  intent of this Agreement.   No  party  to  this
 Agreement shall take any action which would interfere  with  the
 performance  of  this  Agreement by any  party  or  which  would
 adversely affect any of the rights provided for herein.

    16.    In  the event that any party hereto should  bring  any
 action, suit, litigation, or other proceedings against any other
 party  hereto  contesting the validity  of  this  Agreement,  or
 attempting to rescind, negate, modify, or reform this  Agreement
 or any of the terms or provisions hereof, or to remedy, prevent,
 or  obtain relief from a breach of this Agreement by such  other
 party  or parties, or arising out of a breach of this Agreement,
 then  the  prevailing party shall recover all  of  such  party's
 reasonable attorneys' fees and costs incurred in each and  every
 such  action,  suit, litigation, or other proceeding,  including
 any  and all appeals or petitions therefrom.  Each party  agrees
 to  bear  its  own attorneys' fees and costs and other  expenses
 incurred in entering into this Agreement.

    17.    The Trustee may be removed at the request of any party
 to  this  Agreement  if the Trustee fails  to  comply  with  any
 material  provision  of this Agreement or becomes  incapable  of
 acting.  The Trustee may resign by written notification to  each
 other  party to this Agreement.  Any successor trustee shall  be
 selected  by  mutual agreement of each party to  this  Agreement
 other  than the Trustee.  Any removal of or resignation  by  the
 Trustee  shall  become  effective only upon  the  acceptance  of
 appointment of a successor trustee.  This Agreement shall  inure
 to the benefit of, and shall be binding upon, the successors and
 assigns of each of the parties hereto.

    18.    All  notices  and  other  communications  required  or
 permitted  to be given under this Agreement shall be in  writing
 and  shall  be  deemed  to  have been duly  given  if  delivered
 personally  or  sent  by  registered or certified  mail,  return
 receipt  requested,  or  by  overnight  courier  for  next   day
 delivery, to the parties at their respective addresses set forth
 below  or to such other or additional addresses as either  party
 shall  hereafter  specify  in  a written  notice  to  the  other
 parties,  or  by  confirmed telecopy to  the  parties  at  their
 respective  telecopier numbers set forth below or to such  other
 or  additional numbers as any party shall hereafter  specify  by
 written notice to the other parties:


           New Image: New Image Laboratories, Inc.
                     Attn.:Wallace B. Jones, President
                     2340 Eastman Avenue
                     Oxnard, CA 93031
                     Telecopier # 805-988-4542
                               and
                   Richards, Watson & Gershon
                   Attn.: Timothy L. Neufeld
                   333 South Hope Street, 38th Floor
                   Los Angeles, CA 90071-1469
                   Telecopler # 213-626-0078

          Stephan and SDI: The Stephan Co.
                           Attn.: Frank Ferola, Sr., President
                           1850 McNab Road
                           Ft. Lauderdale, FL 33309
                           Telecopier # 954-971-9903
                               and
                           Carlson & Bales
                           Attn.: Curtis Carlson
                           200 South Biscayne Boulevard
                           Miami, FL 33131
                           Telecopier # 305-372-8265

          The Committee:   Greenberg & Bass
                           Attn.: Robert D. Bass
                           16000 Ventura Boulevard, Suite 1000
                           Encino, CA 91436-2730
                           Telecopier # 818-986-6534

          The Trustee:   Robert L. Berger & Associates, Inc.
                         Attn.: Robert L. Berger, President
                         17525 Ventura Boulevard, Suite 200
                         Encino, CA 91316-3843
                         Telecopier # 818-783-2737

All notices shall be deemed given and received on the earliest of
(i)  the  date when actually, received or upon refusal to  accept
delivery, (ii) the date when sent by confirmed telecopier,  (iii)
the  date  one business day after sending by reputable  overnight
courier, or (iv) the date three business days after mailing.

   19.     This Agreement shall be construed in accordance  with,
and be governed by, the internal laws of the State of California.
In  the event that any provision of this Agreement should be held
to  be  void, voidable, or unenforceable, the remaining  portions
hereof shall remain in full force and effect.

   20.    This Agreement may not be modified or amended except by
an  instrument  in  writing  signed by  the  party  against  whom
enforcement  of  any  such modification or amendment  is  sought.
This  Agreement  may be executed and delivered  in  two  or  more
counterparts,  each  of  which, when so executed  and  delivered,
shall  be  an  original,  but  such counterparts  together  shall
Constitute but one and the same instrument.



DATED: May 23, 1997              NEW IMAGE LABORATORIES, INC.,
                                 a California corporation
                       
                                 By Wallace B. Jones
                                    Wallace B. Jones, President
                                

DATED: May 23, 1997              THE STEPHAN CO.,
                                 a Florida corporation

                                 By: Frank Ferola
                                     Frank Ferola, Sr., President


DATED: May 23, 1997              STEPHAN DISTRIBUTING, INC.
                                 a Florida corporation

                                 By:  Frank Ferola
                                      Frank Ferola, Sr.,
President
                                
DATED: May   , 1997          ROBERT L. BERGER & ASSOCIATES, INC.
                             a California corporation, as trustee

                             By_________________________
                               Robert L. Berger, President

DATED: May  , 1997           CONTINUING CREDITORS' COMMITTEE

                             By__________________________
                               Robert D. Bass

                              Greenberg & Bass R.L.L.P,
                              Attorneys for the Committee