**SEPARATION      AGREEMENT**

| 1.     |   | Separation                from Employment and Consulting                Arrangement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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|   |        | (a)    PhotoMedex                and                Clifford have agreed that Clifford will voluntarily resign from the                employ                of PhotoMedex on or before June 30, 2006 (the “Resignation Date”), at a                date mutually acceptable to them, and Clifford and PhotoMedex agree                to                cancel that Employment Agreement dated March 18, 2005, between Clifford                and PhotoMedex (the “Employment Agreement”), to the end that Clifford may                pursue other business interests. Until the Resignation Date, Clifford                will                continue on a full-time basis as Executive Vice President, Dermatology,                devoting the majority of his time out of the office and in the field                so as                to prepare the sales force for the transition occasioned by his departure.                Clifford will continue to report to Jeffrey O’Donnell and have use of his                office. During the period to the Resignation Date, PhotoMedex shall                be                free to seek a person to replace Clifford or to realign Clifford’s duties                to other employees.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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|   |   | (b)    From                the                Resignation Date to the second anniversary thereof, Clifford shall                be                available, at PhotoMedex’s request, to act as a consultant and independent                contractor for PhotoMedex, and as of the second anniversary of the                Resignation Date, the consulting arrangement shall expire automatically.                Clifford shall be available for reasonable telephone consultation                regarding current and future customers of PhotoMedex and on Company                and                competitors’ personnel. Compensation for consultation shall be subsumed                within the severance to be paid to Clifford under Section 2(d) and                within                COBRA premiums described in Section 2(e). If PhotoMedex desires to                engage                Clifford for consultation on business development projects, then                such                consultation shall be on terms to be negotiated by, and mutually                acceptable to, Clifford and PhotoMedex, it being understood that                Clifford                shall be free to decline such consultation for any reason or no reason.                Clifford will not have use of an office at PhotoMedex during that                period.                Clifford, as an independent consultant, shall be responsible for                his own                expenses; PhotoMedex shall reimburse only for those expenses which                it                specifically has approved in advance and in accordance with Company                policy. |

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| 2.     |   | Compensation Arrangements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|   |   | (a)    Until                the                Resignation Date, Clifford shall continue to receive his full base                salary                of $300,000 annual in biweekly installments, according to the Company’s                normal payroll procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|   |   | (b)    Until                the                Resignation Date, Clifford shall continue to enjoy health coverage                from                the Company plan and to participate in the Company 401K plan and                shall                continue to earn vacation days and be paid a car allowance, prorated                to                the date of Resignation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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|   |   | (c)    PhotoMedex                shall make a final payroll and accounting with Clifford in the payroll                period following the Resignation Date, including salary, auto allowance,                vacation pay, and expense reimbursement. This accounting will also                include                three payments of $17,500 each, payable on the first day of each                of the                first, second and third months in the second twelve months of consulting                that Clifford will render to PhotoMedex from the first anniversary                of the                Resignation Date to the second anniversary thereof, as described                in                Section 1(b), where such payments shall be payable for Clifford’s                consulting without income or other tax withholdings over the second                twelve                months. As part of this accounting, Clifford will return to PhotoMedex                any                property which PhotoMedex had provided to Clifford for his use in                pursuance of Company business. |

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|   |        | (d)    From                the Resignation Date until the first anniversary thereof, Clifford                shall                receive, as severance compensation, a fee, payable bi-weekly, equal                to his                gross base salary in effect at the Resignation Date, viz. $300,000,                less                withholding taxes applicable to severance payments. From the Resignation                Date, Clifford will cease to have a car allowance or to earn vacation                days                and will not be able to contribute to the 401K plan and will cease                to                participate in any Company benefit programs, except as set forth                in                subparagraph (e) below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|   |   | (e)    As                of the                Resignation Date, PhotoMedex shall make available to Clifford, in                accordance with COBRA, coverage under the Company’s health plan;                PhotoMedex will pay the premiums for such coverage to the sooner                of the                following dates: the date that Clifford attains age 65 (namely, September                30, 2007) or the date that Clifford secures comparable, full-time                employment from another employer. In either case, after September                30,                2007, Clifford shall be responsible for such premiums equal on a                monthly                basis to the premiums due under the COBRA coverage, for which PhotoMedex                will reimburse him through the second anniversary of the Resignation                Date                in further consideration of Clifford’s continuing service as consultant.                As of the Resignation Date, Clifford will cease to be covered by                PhotoMedex’s workers’ compensation policy or to enjoy Company-paid                disability and life insurance coverage; it shall be at Clifford’s election                whether to convert his group life and group disability coverage into                coverage for himself alone, for the premiums of which he would be                solely                responsible. |
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| 3.     |   | Stock Options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

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|   |   | (a)    Stock                options                granted by PhotoMedex to Clifford shall continue to vest up to the                Resignation Date as an officer and employee, and as of the Resignation                Date. Half of any options remaining unvested as of the Resignation                Date                will become fully vested, and the other half will then be canceled.                After the Resignation Date, Clifford will                continue as                a consultant of the Company until the second anniversary of the                Resignation Date, and during such period and for three months thereafter,                the vested options will continue to be exercisable by Clifford, unless                an                option by its own terms (e.g. 2/18/08) has expired sooner. Set forth                on                Exhibit A is a listing of options granted to Clifford, the expected                status                quo of such options as of a hypothetical Resignation Date of June                30,                2006, after vesting 50% of the then-unvested options, and the expiration                dates of the options. The provisions of this Section 3 shall supersede                the                vesting and exercisability provisions of the option agreements covering                the discrete grants and shall supersede the provisions of the stock                option                plans under which such options were granted. |
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|   |   | (b)    Any                options not exercised or otherwise expired by 90 days past the second                anniversary of the Resignation Date shall be canceled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| 4.     |   | Confidentiality, competition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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|   |   | (a)    Clifford                will not communicate, prior to the date on which the Company may                be                obliged to make public disclosure of Clifford’s intended resignation,                about his resignation to any person, including those in the industry                or                employees of PhotoMedex, other than Messrs. O’Donnell, Stewart, McGrath,                Woodward and Jaffe and Mss. Carmichael, Dailey and Gensel, it being                noted                that PHMD may inform members of the Sales management and its professional                advisors before the public disclosure of Clifford’s intended                resignation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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|   |   | (b)    Until                the Resignation Date, Clifford will remain subject to the provisions                of                Sections 6.1 to 6.4 of the Employment Agreement concerning property                rights                and obligations, it being understood that among the trade secrets                of                PhotoMedex are any matters of confidential information of PhotoMedex                not                in the public domain, confidentiality and will remain subject to                the                non-solicitation obligations described in Sections 6.5.1 and 6.5.2                of the                Employment Agreement. These obligations will continue unchanged through                the second anniversary of the Resignation Date, and during the period                that                Clifford remains subject to such obligations, he will not disparage                PhotoMedex, nor will PhotoMedex disparage                Clifford.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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|   |   | (c)    Until                the                Resignation Date, Clifford will likewise remain subject to the                non-competition obligations described in Section 6.5.3 of the Employment                Agreement. In consideration of the severance payment to be made under                Section 2(d), Clifford shall likewise remain subject, for the twelve                months following the Resignation Date, to such non-competition                obligations, except that the second sentence of Section 6.5.3 of                the                Employment Agreement is amended to read as follows: “Employee, therefore,                agrees that, for a period of two (2) years after the Resignation                Date, he                will not, as an employee, sole proprietor, partner, or joint venturer,                in                the same or similar capacity in which he worked for Employer Group,                compete with Employer Group in the manufacture, marketing or sales                of                excimer laser technology in connection with interventional cardiology,                psoriasis, or any other field in which Employee has actual knowledge                of                Employer’s use of excimer laser technology.” Furthermore, Clifford shall                be permitted, with PhotoMedex’s consent (such consent not to be                unreasonably withheld or delayed), to work as employee or consultant                for                other companies in the skin care market, provided that such companies                do                not market products that are, in PhotoMedex’s sole discretion, competitive                with those of PhotoMedex as of the Resignation Date. Before embarking                on                such work, Clifford shall give PhotoMedex at least 15 days’ prior written                notice, and if PhotoMedex does not consent to such work, it shall                advise                Clifford of its reasons therefor. If PhotoMedex does not reply to                Clifford’s notice within such 15-day period, then PhotoMedex shall be                deemed to have consented. |
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| 5.     |   | Waiver and Release.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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|   |   | (a)    In                exchange for                the promises made to him under this Separation Agreement, Clifford                completely waives, releases and forever discharges PhotoMedex, its                past,                present and future successors                and assigns,                officers, directors, partners,                agents,                associates and                employees, from all claims, damages (including but not limited to                general,                special, punitive, liquidated and compensatory damages) and                causes of action of every kind, nature and character, known or unknown,                in                law or equity, fixed or contingent, which he may now have, or he                ever had                arising from or in any way connected with his employment relationship                or                the termination of his employment with PhotoMedex                or                any other matter occurring at any time in the past up to and including                the                date of this Agreement or involving any continuing effects of any                acts or                practices which may have arisen or occurred prior to the date of                this                Agreement.                This release includes but is not limited to:                any claims of unpaid compensation; all "wrongful discharge" claims;                all                claims relating to any contracts of employment express or implied;                any                covenant of good faith and fair dealing express or implied; any tort                of                any nature; any federal, state, or municipal statute or ordinance;                any                claims for employment discrimination, including sexual harassment,                Pennsylvania Human Relations Act, 43 P.S. Section 951 et seq., Title                VII                of the Civil Rights Act of 1964, as amended, the Age Discrimination                in                Employment Act ("ADEA"), the Older Workers Benefit Protection Act,                42                U.S.C. Section 1981, the Worker Adjustment and Retraining Notification                Act, and any other federal,                state, or municipal laws, ordinances                and regulations relating to employment, and any and all claims for                attorney's fees and costs. Clifford understands that this release                does not                apply to any claims arising under the ADEA after the Effective Date                of                this Agreement. |

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|   |   | (b)    Clifford                acknowledges hereby that he understands that, since he is aged 40                or                older, he has no fewer than 21 days from the date he has received                this                Agreement to consider and sign this Agreement. Clifford also understands                that, as he is aged 40 or older, he has seven days to revoke this                Agreement after he signs it. Clifford understands that any such revocation                must be in writing and must be received by PhotoMedex's Corporate                Counsel                at                147 Keystone Drive, Montgomeryville, PA 18936 no                later than                5                p.m.                on the last day of the applicable revocation period. The Effective                Date of                this Agreement is the day after the seven-day revocation period ends.                Clifford understands that he will not receive the benefits and privileges                of this Agreement sooner than the Effective Date                and then only if                he has not revoked this Agreement pursuant to this Section                5. |
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|   |   | (c)    Except                as to rights provided under this Agreement, Clifford acknowledges                that the                benefits inuring to him under this Separation Agreement are provided                to                him in full and complete satisfaction and discharge of any and all                obligations that PhotoMedex has or may have to him as an employee                and that                he has been paid all the salary, bonuses, benefits and other compensation                that are due to him.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| 6.     |   | Agreement Not to Sue and              Damages.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|   |   | (a)    Clifford                further agrees not to sue PhotoMedex for any claims covered by this                Separation Agreement or the Employment Agreement. If Clifford should                sue                in violation of this Agreement and not be the prevailing party in                the                suit, he agrees to pay all costs and expenses incurred by PhotoMedex                in                defending against a suit or enforcing this Agreement, including court                costs, expenses and reasonable attorneys’ fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

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|   |   | (b)    PhotoMedex                agrees not to sue Clifford for any claims covered by this Agreement                or the                Employment Agreement. If PhotoMedex should sue in violation of this                Agreement and not be the prevailing party in the suit, it agrees                to pay                all costs and expenses incurred by Clifford in defending against                a suit or                enforcing this Agreement, including court costs, expenses and reasonable                attorneys’ fees.                                                                                                                                                                                                                                                                                          |
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|   |   | (c)    Excluded                from the release and the covenant not to sue are any claims which                cannot                be waived by law, including without limitation                an                ADEA claim to the extent such an exception is required by                law, and the filing of a charge with the Equal Employment Opportunity                Commission. But Clifford agrees to waive any right to any monetary                recovery, should any government agency pursue any claims on his behalf.                Clifford also acknowledges that he has not suffered any on-the-job                injury                for which he has not already filed a claim.                                                                                                                                    |
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|   |   | (d)    Clifford                further acknowledges and agrees that in the event he may breach the                provisions of this Agreement, PhotoMedex shall: (i) be entitled to                apply                for and receive an injunction to restrain any violation of this Agreement,                and (ii) Clifford shall be obligated to pay to PhotoMedex its costs                and                expenses in obtaining such injunction and/or enforcing this Agreement                and                defending against such lawsuit (including court costs, expenses and                reasonable legal fees), and the foregoing shall not affect the validity                of                this Agreement and such relief does not constitute in any way a penalty                or                a forfeiture. |
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| 7.     |   | Miscellaneous.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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|   |   | (a)    This                Agreement                is deemed made and entered into in the Commonwealth of Pennsylvania,                and                in all respects shall be interpreted, enforced and governed under                the                internal laws of the Commonwealth of Pennsylvania. Any dispute under                this                Agreement shall be adjudicated by a court of competent jurisdiction                in the                Commonwealth of Pennsylvania.                                                                                                                                                                                                                                                                                                                                       |

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|   |        | (b)    Clifford                represents and warrants that he will not seek, and waives any right                or                claim to, employment now or in the future by                PhotoMedex.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |        | (c)    This                Agreement                resolves all matters between Clifford and PhotoMedex and supersedes                any                other written or oral agreement between Clifford and PhotoMedex.                The                Employment Agreement of March 18, 2005, is canceled as of the Effective                Date of this Agreement, except as specifically set forth                herein.                                                                                                                                                                                                                                                                                                                   |
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|   |   | (d)    Clifford                agrees that he is signing this Agreement knowingly and voluntarily,                that                he has not been coerced or threatened into signing this Agreement                and that                he has not been promised anything not set forth in this Agreement                in                exchange for signing this Agreement. If any part of this Agreement                is                found to be illegal or invalid, the rest of this Agreement will still                be                enforceable.                                                                                                                                                                             |
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|   |   | (e)    This                Agreement                may be executed in two or more counterparts, each of which will be                deemed                an original, but all of which together will constitute one and the                same                instrument. Faxed copies will be effective and binding.                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|   |   | (f)    By                this                Agreement, Clifford understands further that he has been advised                to                consult with an attorney of his own choice at his own expense before                signing below.                He has done so. PhotoMedex agrees to pay Clifford’s attorney fees incurred                in the review and negotiation of this Agreement in an amount not                to exceed                $3,000. Any rule of law or decision that would require interpretation                of                any claimed ambiguities in this Agreement against the party that                drafted                it                has no application and is expressly waived. |
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|   |   | (g)    This                Agreement                has been individually negotiated and is not part of a group exit                incentive                or other termination program.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

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|   |   | (h)    No                modification                of any provision of this Agreement shall be effective unless made                in                writing and signed by both PhotoMedex and Clifford. |
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|                                                    |                                                                     |                                                                     |
|---------------------------------------------------------|--------------------------------------------------------------------------|--------------------------------------------------------------------------|
| JOHN              F.              CLIFFORD              | PHOTOMEDEX,              INC.                                            |
|                                                    |                                                                     |
| Date:               April 30, 2006                 | Date:                                                               |    May                1, 2006              |
| Signature:                /s/John F. Clifford | By:                                                            |    /s/ Jeffrey              F. O’Donnell  |
|    Name:                                 |       Jeffrey F.                O’Donnell |
|   Title:                                 |                     President, CEO                   |

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|         |   | Exercise |        | Grant    |   | Expiry    |   | Vested at                |   | Vested at |   |
|--------------|--------|----------|--------|----------|--------|-----------|--------|--------------------------|--------|----------------|--------|
| Number  |   | Price    |   | Date     |   | Date      |   | 05/31/06            |   | 06/30/06       |   |
|         |   |     |   |     |   |      |   |                     |   |           |   |
| 33,110       |   | $2.17    |   | 02/18/98 |   | 02/18/08* |   | 33,110    |   | 33,110         |   |
|         |   |     |   |     |   |      |   |                     |   |           |   |
| 99,330       |   | $1.16    |   | 08/25/99 |   | 08/25/09  |   | 99,330                   |   | 99,330         |   |
|         |   |     |   |     |   |      |   |                     |   |           |   |
| 66,220       |   | $1.07    |   | 12/13/00 |   | 12/13/10  |   | 66,220                   |   | 66,220         |   |
|         |   |     |   |     |   |      |   |                     |   |           |   |
| 66,220       |   | $1.96    |   | 11/28/01 |   | 11/28/11  |   | 66,220                   |   | 66,220         |   |
|         |   |     |   |     |   |      |   |                     |   |           |   |
| 99,330       |   | $2.76    |   | 05/20/02 |   | 05/20/12  |   | 99,330                   |   | 99,330         |   |
|         |   |     |   |     |   |      |   |                     |        |           |   |
| 33,110       |   | $1.65    |   | 12/15/03 |   | 12/15/13  |   | 22,073                   |        | 27,592**       |   |
|         |   |     |   |     |   |      |   |                     |        |           |   |
| 250,000      |   | $2.78    |   | 04/04/05 |   | 04/04/10  |   | 85,000                   |        | 167,500***     |   |
|         |   |     |   |     |   |      |   |                     |   |           |   |
|         |   |     |   |     |   |      |   |                     |   |           |   |
|         |   |     |   |     |   |      |   |                     |   |           |   |

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