THIS HAS NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS NOTE MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 



		
	Original Issue Date: August 29, 2006	$1.5 million 











SENIOR SECURED
PROMISSORY NOTE 



DUE August 28, 2007 



        FOR
VALUE RECEIVED, Auriga Laboratories, Inc., a Delaware corporation (the
“Company”) promises to pay to Levall Finance Corp. LLC or its registered assigns
(the “Holder”), the principal sum of $1.5 million on or before August 28, 2007
as set forth below (the “Maturity Date”), and to pay interest to the Holder on
the aggregate then outstanding principal amount of this Note in accordance with the
provisions hereof. This Note is subject to the following additional provisions: 



Section 1.    Definitions.      For
the purposes hereof, the following terms shall have the following meanings: 



        “Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal
holiday in the United States or a day on which banking institutions in the State of
Georgia are authorized or required by law or other government action to close. 



        “Common
Stock” means the common stock, $0.001 par value, of the Company and stock of any
other class into which such shares may hereafter have been reclassified or changed. 



        “Event
of Default” shall have the meaning set forth in Section 4. 



        “Interest
Payment Date” shall have the meaning set forth in Section 2(a). 


















        “Levall
Sales” means the total gross receipts actually received by the Company from sales of
the Levall product during the period in question, less the following amounts: (i) royalty
and/or license fees payable to third parties for the right to sell the product; (ii)
amounts reimbursed by customers, such as for insurance, shipping and similar charges;
(iii) promotional amounts, such as credits, cash discounts, freight discounts, rebates or
promotional allowances; (iv) taxes on sale, such as sales, use, excise and other taxes;
and (v) amounts for returns, such as credits, refunds and price allowances. 



        “Maturity
Date” shall have the meaning set forth in Section 3 of this Note. 



        “Original
Issue Date” shall mean the date of the first issuance of this Note regardless of the
number of transfers of this Note and regardless of the number of instruments which may be
issued to evidence this Note. 



        “Person”
means a corporation, an association, a partnership, organization, a business, an
individual, a government or political subdivision thereof or a governmental agency. 



        “Trading
Day” means a day on which the Common Stock is traded on a Trading Market. 



        “Trading Market”
means the following markets or exchanges on which the Common Stock is listed or quoted for
trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange,
the New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board. 



Section 2.    Interest. 



         (a)    
          Payment of Interest. The Company shall pay interest to the Holder on the
          aggregate then outstanding principal amount of this Note at the annual rate of
          5.13%, payable on the Maturity Date (except that, if any such date is not a
          Business Day, then such payment shall be due on the next succeeding Business
          Day) (each such date, an “Interest Payment Date”). 



         (b)    
          Interest Calculations. Interest shall be calculated on the basis of a
          360-day year and shall accrue daily commencing on the Original Issue Date until
          payment in full of the principal sum, together with all accrued and unpaid
          interest has been made. Interest shall be compounded quarterly. 














Section 3.    Maturity. Upon the
earlier of (i) the closing of a Qualified Financing (as defined below), or (ii) August 28,
2007 (the “Maturity Date”), the entire outstanding principal balance of, and all
accrued and unpaid interest on, this Note shall mature and be due and payable to the
Holder by the Company. In addition, the Company agrees that any such Qualifying Financing
(as defined below) shall include as a closing condition to such Qualifying Financing the
satisfaction and payment of the entire outstanding principal balance of, and all accrued
and unpaid interest on, this Note on or before the closing of any such Qualified
Financing. A “Qualified Financing” shall mean an equity or debt financing in
which the Company sells equity or debt securities and obtains net proceeds in an amount
not less than one million five hundred thousand dollars ($1,500,000.00). 



Section 4.    Events of Default. 



         (a)    
          “Event of Default”, wherever used herein, means any one of the
          following events (whatever the reason and whether it shall be voluntary or
          involuntary or effected by operation of law or pursuant to any judgment, decree
          or order of any court, or any order, rule or regulation of any administrative or
          governmental body): 



             (i)    
          any default in the payment of (A) the principal of amount of this Note, or
          (B) interest on this Note, as and when the same shall become due and
          payable (whether on the Maturity Date or by acceleration or otherwise) which
          default, solely in the case of an interest payment, is not cured, within 5
          Trading Days; 



             (ii)    
          the Company shall fail to observe or perform any other covenant or agreement
          contained in this Note which failure is not cured, if possible to cure, within 5
          Trading Days after notice of such default sent by the Holder; 



             (iii)    
          any representation or warranty made herein shall be untrue or incorrect in any
          material respect as of the date when made or deemed made; 



             (iv)    
          (i) the Company shall commence, or there shall be commenced against the
          Company, a case under any applicable bankruptcy or insolvency laws as now or
          hereafter in effect or any successor thereto, or the Company commences any other
          proceeding under any reorganization, arrangement, adjustment of debt, relief of
          debtors, dissolution, insolvency or liquidation or similar law of any
          jurisdiction whether now or hereafter in effect relating to the Company or
          (ii) there is commenced against the Company any such bankruptcy, insolvency
          or other proceeding which remains undismissed for a period of 60 days; or
          (iii) the Company is adjudicated by a court of competent jurisdiction
          insolvent or bankrupt; or any order of relief or other order approving any such
          case or proceeding is entered; or (iv) the Company suffers any appointment
          of any custodian or the like for it or any substantial part of its property
          which continues undischarged or unstayed for a period of 60 days; or
          (v) the Company makes a general assignment for the benefit of creditors; or
          (vi) the Company shall fail to pay, or shall state that it is unable to
          pay, or shall be unable to pay, its debts generally as they become due; or
          (vii) the Company shall call a meeting of its creditors with a view to
          arranging a composition, adjustment or restructuring of its debts; or
          (viii) the Company shall by any act or failure to act expressly indicate
          its consent to, approval of or acquiescence in any of the foregoing; or
          (ix) any corporate or other action is taken by the Company for the purpose
          of effecting any of the foregoing; or 














             (v)    
          the Company shall default in any of its obligations under any mortgage, credit
          agreement or other facility, indenture agreement, factoring agreement or other
          instrument under which there may be issued, or by which there may be secured or
          evidenced any indebtedness for borrowed money or money due under any long term
          leasing or factoring arrangement of the Company in an amount exceeding $100,000,
          whether such indebtedness now exists or shall hereafter be created and such
          default shall result in such indebtedness becoming or being declared due and
          payable prior to the date on which it would otherwise become due and payable. 



         (b)    
          Remedies Upon Event of Default. If any Event of Default occurs, the full
          principal amount of this Note, together with interest and other amounts owing in
          respect hereof, to the date of acceleration shall become, at the Holder’s
          election, immediately due and payable in full. The Holder need not provide and
          the Company hereby waives any presentment, demand, protest or other notice of
          any kind, and the Holder may immediately and without expiration of any grace
          period enforce any and all of its rights and remedies hereunder and all other
          remedies available to it under applicable law. Such declaration may be rescinded
          and annulled by the Holder at any time prior to payment hereunder and the Holder
          shall have all rights as a Note holder until such time, if any, as the full
          payment under this Section shall have been received by it. No such rescission or
          annulment shall affect any subsequent Event of Default or impair any right
          consequent thereon. 



Section 5.    Royalty Payment.
The Company shall, on or prior to the 45th day following the end of each
calendar quarter, commencing with the quarter ending December 31, 2006, make a payment to
the Holder in an amount equal to 6% (the “Royalty Rate”) of the Levall Sales for
the preceding quarter (provided that the payment with respect to the quarter ended
December 31, 2006 shall also take into account Levall Sales made from the Original Issue
Date through September 30, 2006). Once per annum, the Holder shall have the right, at its
sole expense, to inspect the books and records of the Company to verify the amount of
Levall Sales, provided however that such inspection shall be limited to a review of the
books and records that directly relate to the Levall Sales). 



Section 6.    Miscellaneous. 



             (a)    
          Notices. Any and all notices or other communications or deliveries to be
          provided by the Holder hereunder by facsimile, sent by a nationally recognized
          overnight courier service, addressed to the Company, at 5555 Triangle Parkway,
          Suite 300, Norcross, Georgia 30092, facsimile number, 678-282-1697, Attn: CEO,
          or such other address or facsimile number as the Company may specify for such
          purposes by notice to the Holder delivered in accordance with this Section. Any
          and all notices or other communications or deliveries to be provided by the
          Company hereunder shall be in writing and delivered personally, by facsimile,
          sent by a nationally recognized overnight courier service addressed to the
          Holder at the facsimile telephone number or address of such Holder appearing on
          the books of the Company, or if no such facsimile telephone number or address
          appears, at the principal place of business of the Holder. Any notice or other
          communication or deliveries hereunder shall be deemed given and effective on the
          earliest of (i) the date of transmission, if such notice or communication
          is delivered via facsimile at the facsimile telephone number specified in this
          Section prior to 5:30 p.m. (New York City time), (ii) the date after the
          date of transmission, if such notice or communication is delivered via facsimile
          at the facsimile telephone number specified in this Section later than 5:30 p.m.
          (New York City time) on any date and earlier than 11:59 p.m. (New York City
          time) on such date, (iii) the second Business Day following the date of
          mailing, if sent by nationally recognized overnight courier service, or
          (iv) upon actual receipt by the party to whom such notice is required to be
          given. 














         (b)    
          Absolute Obligation. Except as expressly provided herein, no provision of
          this Note shall alter or impair the obligation of the Company, which is absolute
          and unconditional, to pay the principal of, and interest on, this Note at the
          time, place, and rate, and in the coin or currency, herein prescribed. This Note
          is a direct debt obligation of the Company. 



         (c)    
          Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or
          destroyed, the Company shall execute and deliver, in exchange and substitution
          for and upon cancellation of a mutilated Note, or in lieu of or in substitution
          for a lost, stolen or destroyed Note, a new Note for the principal amount of
          this Note so mutilated, lost, stolen or destroyed but only upon receipt of
          evidence of such loss, theft or destruction of such Note, and of the ownership
          hereof, and indemnity, if requested, all reasonably satisfactory to the Company. 



         (d)    
          Security Interest. This Note is a direct debt obligation of the Company
          and is secured by a first priority perfected security interest in all of the
          assets of the Company for the benefit of the Holder. 



         (e)    
          Governing Law. All questions concerning the construction, validity,
          enforcement and interpretation of this Note shall be governed by and construed
          and enforced in accordance with the internal laws of the State of Delaware,
          without regard to the principles of conflicts of law thereof. 



         (f)    
          Waiver. Any waiver by the Company or the Holder of a breach of any
          provision of this Note shall not operate as or be construed to be a waiver of
          any other breach of such provision or of any breach of any other provision of
          this Note. The failure of the Company or the Holder to insist upon strict
          adherence to any term of this Note on one or more occasions shall not be
          considered a waiver or deprive that party of the right thereafter to insist upon
          strict adherence to that term or any other term of this Note. Any waiver must be
          in writing. 



         (g)    
          Severability. If any provision of this Note is invalid, illegal or
          unenforceable, the balance of this Note shall remain in effect, and if any
          provision is inapplicable to any Person or circumstance, it shall nevertheless
          remain applicable to all other Persons and circumstances. If it shall be found
          that any interest or other amount deemed interest due hereunder violates
          applicable laws governing usury, the applicable rate of interest due hereunder
          shall automatically be lowered to equal the maximum permitted rate of interest.
          The Company covenants (to the extent that it may lawfully do so) that it shall
          not at any time insist upon, plead, or in any manner whatsoever claim or take
          the benefit or advantage of, any stay, extension or usury law or other law which
          would prohibit or forgive the Company from paying all or any portion of the
          principal of or interest on this Note as contemplated herein, wherever enacted,
          now or at any time hereafter in force, or which may affect the covenants or the
          performance of this Note, and the Company (to the extent it may lawfully do so)
          hereby expressly waives all benefits or advantage of any such law, and covenants
          that it will not, by resort to any such law, hinder, delay or impede the
          execution of any power herein granted to the Holder. 














         (h)    
          Next Business Day. Whenever any payment or other obligation hereunder
          shall be due on a day other than a Business Day, such payment shall be made on
          the next succeeding Business Day. 



         (i)    
          Headings. The headings contained herein are for convenience only, do not
          constitute a part of this Note and shall not be deemed to limit or affect any of
          the provisions hereof. 



         (j)    
          Seniority. This Note is senior in right of payment to any and all other
          indebtedness of the Company. 








* * * * * * * * * * * * * * * * * * * *  























        IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized
officer as of the date first above indicated. 



		
		AURIGA LABORATORIES, INC.
		

By: /s/ Philip S. Pesin
		       Name: Philip S. Pesin
		       Title: Chairman & CEO








AGREED AND ACKNOWLEDGED 



LEVALL FINANCE CORP. LLC  



By: Sorrento Financial
Partners, LLC, its manager 



By: /s/ Philip S. Pesin

       Name: Philip S. Pesin
Managing
Member