Document:

AURIGA LABORATORIES,
INC.  
2007 Stock Option Plan  
NOTICE OF STOCK OPTION GRANT  

Trevor Pokorney 

        You
have been granted an option to purchase Common Stock (“Common Stock”) of
Auriga Laboratories, Inc. (the “Company”) as follows: 

	Board Approval Date:	2/1/2007
	
Date of Grant:	2/1/2007
	
Vesting Commencement Date:	3/1/2007
	
Exercise Price Per Share:	0.72
	
Total Number of Shares Granted:	200,000
	
Type of Option:	NON-STATUTORY STOCK OPTION
	
Term/Expiration Date:	2/1/2017
	
Vesting Schedule:	The shares subject to the Option shall vest as follows: Fifty Percent
		(50%) of the shares shall vest on the Vesting Commencement Date;
		thereafter, so long as you continue to serve on the Board of Directors
		of the Company, 1/24th of the total number of shares subject to the
		Option shall vest on the one month anniversary of the Vesting
		Commencement Date, and an additional 1/24th shall vest each month
		thereafter.
	
Termination Period:	This Option may be exercised for three months after termination of
		employment or consulting relationship except as set out in Sections 6
		and 7 of the Stock Option Agreement (but in no event later than the
		Expiration Date).

        By
your signature and the signature of the Company’s representative below, you and the
Company agree that this option is granted under and governed by the terms and conditions
of the 2007 STOCK OPTION PLAN and the Stock Option Agreement, both of which are attached
and made a part of this document. 

	GRANTEE	AURIGA LABORATORIES, INC.
	
/s/ Trevor Pokorney	By:  /s/ Philip S. Pesin
	Signature
	 	Name:  Philip S. Pesin
	Trevor Pokorney
	Print Name	Title:  Chief Executive Officer

AURIGA LABORATORIES,
INC. 
2007 STOCK OPTION PLAN 
STOCK OPTION AGREEMENT  

        1.    Grant
of Option. Auriga Laboratories, Inc., a Delaware           corporation
(the “Company”), hereby grants to GRANTEE           (“Optionee”)
an option (the “Option”) to           purchase a total number of shares
of Common Stock (the           “Shares”) set forth in the Notice of
Stock Option Grant, at the           exercise price per share set forth in the Notice of
Stock Option Grant (the           “Exercise Price”) subject to the
terms, definitions and           provisions of the Auriga Laboratories, Inc. 2007 Stock
Option Plan (the           “Plan”) adopted by the Company, which is
incorporated herein by           reference. Unless otherwise defined herein, the terms
defined in the Plan shall           have the same defined meanings in this Option.  

        If
designated an Incentive Stock Option, this Option is intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Code. 

        2.    Exercise
of Option. This Option shall be exercisable during           its Term in
accordance with the Vesting Schedule set out in the Notice of Stock           Option
Grant and with the provisions of Sections 7 and 8 of the Plan as follows:  

            (a)    Right
to Exercise.  

                (i)              This
Option may be exercised in whole or in part at any time after the Date of
          Grant, as to Shares which have not yet vested under the vesting schedule
          indicated on the Notice of Stock Option Grant; provided, however, that Optionee
          shall execute as a condition to such exercise of this Option, the Early
Exercise           Notice and Restricted Stock Purchase Agreement attached hereto as Exhibit
          A (the “Early Exercise Agreement”). If Optionee chooses to
          exercise this Option solely as to Shares which have vested under the vesting
          schedule indicated on the Notice of Stock Option Grant, Optionee shall complete
          and execute the form of Exercise Notice and Restricted Stock Purchase Agreement
          attached hereto as Exhibit B (the “Exercise Agreement”).
          Notwithstanding the foregoing, the Company may in its discretion prescribe or
          accept a different form of notice of exercise and/or stock purchase agreement
if           such forms are otherwise consistent with this Agreement, the Plan and
          then-applicable law.  

                (ii)              This
Option may not be exercised for a fraction of a share.  

                    (iii)              In
the event of Optionee’s death, disability or other termination of
          employment or consulting relationship, the exercisability of the Option is
          governed by Sections 5, 6 and 7 below, subject to the limitation contained in
          Section 2(a)(iv) below.  

                (iv)              In
no event may this Option be exercised after the Expiration Date of this           Option
as set forth in the Notice of Stock Option Grant.  

            (b)    Method
of Exercise. This Option shall be exercisable by           execution and
delivery of the Early Exercise Agreement or the Exercise           Agreement, whichever
is applicable, or of any other written notice approved for           such purpose by the
Company which shall state the election to exercise the           Option, the number of
Shares in respect of which the Option is being exercised,           and such other
representations and agreements as to the holder’s investment           intent with
respect to such shares of Common Stock as may be required by the           Company
pursuant to the provisions of the Plan. Such written notice shall be           signed by
Optionee and shall be delivered in person or by certified mail to the           Secretary
of the Company. Subject to Section 2(c) below, the written notice           shall be
accompanied by payment of the Exercise Price. This Option shall be           deemed to be
exercised upon receipt by the Company of such written notice           accompanied by the
Exercise Price.  

        No
Shares will be issued pursuant to the exercise of an Option unless such issuance and such
exercise shall comply with all relevant provisions of applicable law, including the
requirements of any stock exchange upon which the Shares may then be listed. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred to Optionee
on the date on which the Option is exercised with respect to such Shares. 

            (c)    Net
Issue Exercise.  

                (i)                 In
lieu of exercising this Option in the manner provided above in           Section 2(b),
the Optionee may elect to receive shares equal to the value           of this Option (or
the portion thereof being canceled) by surrender of this           Option at the
principal office of the Company together with the Early Exercise           Agreement or
Exercise Agreement, as the case may be, duly executed by such           Optionee, in
which event the Company shall issue to holder a number of shares of           Common
Stock computed using the following formula:  

	X	=	Y (A - B)	
			A	

	Where	X	=	The number of shares of Common Stock to be issued to the Optionee.
		Y	=	The number of shares of Common Stock purchasable under this Option (at the date of such
				calculation).
		A	=	The Fair Market Value of one share of Common Stock (at the date of such calculation).
		B	=	The Purchase Price (as adjusted to the date of such calculation).

        3.    Method
of Payment. Payment of the Exercise Price shall be           by cash,
check, or any other form approved by the Company), or any other method
          permitted under the Plan; provided however that the Administrator may refuse to
          allow Optionee to tender a particular form of payment (other than cash or
check)           if, in the Administrator’s sole discretion, acceptance of such form
of           consideration would not be in the best interests of the Company at such
time.  

        4.    Restrictions
on Exercise. This Option may not be exercised           until such time as
the Plan has been approved by the shareholders of the           Company, or if the
issuance of such Shares upon such exercise or the method of           payment of
consideration for such shares would constitute a violation of any           applicable
federal or state securities or other law or regulation, including any           rule
under Part 207 of Title 12 of the Code of Federal Regulations as           promulgated by
the Federal Reserve Board. As a condition to the exercise of this           Option, the
Company may require Optionee to make any representation and warranty           to the
Company as may be required by any applicable law or regulation.  

2 

        5.    Termination
of Relationship. In the event of termination of           Optionee’s
Continuous Status as an Employee or Consultant, Optionee may, to           the extent
otherwise so entitled at the date of such termination (the “Termination Date”),
exercise this Option during the           Termination Period set forth in the Notice of
Stock Option Grant. To the extent           that Optionee was not entitled to exercise
this Option at such Termination Date,           or if Optionee does not exercise this
Option within the Termination Period, the           Option shall terminate.  

        6.    Disability
of Optionee.  

            (a)              Notwithstanding
the provisions of Section 5 above, in the event of termination           of Optionee’s
Continuous Status as an Employee or Consultant as a result of           his or her total
and permanent disability (as defined in Section 22(e)(3) of the           Code), Optionee
may, but only within twelve months from the Termination Date           (but in no event
later than the Expiration Date set forth in the Notice of Stock           Option Grant
and in Section 9 below), exercise this Option to the extent he or           she was
entitled to exercise it at such Termination Date. To the extent that           Optionee
was not entitled to exercise the Option on the Termination Date, or if           Optionee
does not exercise such Option to the extent so entitled within the time
          specified in this Section 6(a), the Option shall terminate.  

            (b)              Notwithstanding
the provisions of Section 5 above, in the event of termination           of Optionee’s
consulting relationship or Continuous Status as an Employee           as a result of a
disability not constituting a total and permanent disability           (as set forth in
Section 22(e)(3) of the Code), Optionee may, but only within           six months from
the Termination Date (but in no event later than the Expiration           Date set forth
in the Notice of Stock Option Grant and in Section 9 below),           exercise the
Option to the extent Optionee was entitled to exercise it as of           such
Termination Date; provided, however, that if this is an Incentive Stock           Option
and Optionee fails to exercise this Incentive Stock Option within three           months
from the Termination Date, this Option will cease to qualify as an           Incentive
Stock Option (as defined in Section 422 of the Code) and Optionee will           be
treated for federal income tax purposes as having received ordinary income at
          the time of such exercise in an amount generally measured by the difference
          between the Exercise Price for the Shares and the Fair Market Value of the
          Shares on the date of exercise. To the extent that Optionee was not entitled to
          exercise the Option at the Termination Date, or if Optionee does not exercise
          such Option to the extent so entitled within the time specified in this Section
          6(b), the Option shall terminate.  

        7.    Death
of Optionee. In the event of the death of Optionee           (a) during
the Term of this Option and while an Employee or Consultant of the           Company and
having been in Continuous Status as an Employee or Consultant since           the date of
grant of the Option, or (b) within 30 days after Optionee’s           Termination
Date, the Option may be exercised at any time within six months           following the
date of death (but in no event later than the Expiration Date set           forth in the
Notice of Stock Option Grant and in Section 9 below), by           Optionee’s estate
or by a person who acquired the right to exercise the           Option by bequest or
inheritance, but only to the extent of the right to           exercise that had accrued
at the Termination Date.  

3 

        8.    Non-Transferability
of Option. This Option may not be           transferred in any manner
otherwise than by will or by the laws of descent or           distribution and may be
exercised during the lifetime of Optionee only by him or           her. The terms of this
Option shall be binding upon the executors,           administrators, heirs, successors
and assigns of Optionee.  

        9.    Term
of Option. This Option may be exercised only within           the Term set
forth in the Notice of Stock Option Grant, subject to the           limitations set forth
in Section 6 of the Plan.  

        10.    Tax
Consequences. Set forth below is a brief summary as of           the date
of this Option of certain of the federal and state tax consequences of           exercise
of this Option and disposition of the Shares under the laws in effect           as of the
Date of Grant. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX           LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX           ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.  

            (a)    Exercise
of Incentive Stock Option. If this Option           qualifies as an
Incentive Stock Option, there will be no regular federal or           state income tax
liability upon the exercise of the Option, although the excess,           if any, of the
Fair Market Value of the Shares on the date of exercise over the           Exercise Price
will be treated as an adjustment to the alternative minimum tax           for federal tax
purposes and may subject Optionee to the alternative minimum tax           in the year of
exercise.  

            (b)    Exercise
of Nonstatutory Stock Option. If this Option does           not qualify as
an Incentive Stock Option, there may be a regular federal income           tax liability
and a state income tax liability upon the exercise of the Option.           Optionee will
be treated as having received compensation income (taxable at           ordinary income
tax rates) equal to the excess, if any, of the fair market value           of the Shares
on the date of exercise over the Exercise Price. If Optionee is a           current or
former employee, the Company may be required to withhold from           Optionee’s
compensation or collect from Optionee and pay to the applicable           taxing
authorities an amount equal to a percentage of this compensation income           at the
time of exercise.  

            (c)    Disposition
of Shares. In the case of a Nonstatutory Stock           Option, if Shares
are held for more than one year, any gain realized on           disposition of the Shares
will be treated as long-term capital gain for federal           and state income tax
purposes. In the case of an Incentive Stock Option, if           Shares transferred
pursuant to the Option are held for more than one year after           exercise and are
disposed of at least two years after the Date of Grant, any           gain realized on
disposition of the Shares will also be treated as long-term           capital gain for
federal and state income tax purposes. In either case, the           long-term capital
gain will be taxed for federal income tax and alternative           minimum tax purposes
at a maximum rate of 20% if the Shares are held more than           one year after
exercise. If Shares purchased under an Incentive Stock Option are           disposed of
within one year after exercise or within two years after the Date of           Grant, any
gain realized on such disposition will be treated as compensation           income
(taxable at ordinary income rates) to the extent of the difference           between the
Exercise Price and the lesser of (i) the Fair Market Value of the           Shares on the
date of exercise, or (ii) the sale price of the Shares.  

            (d)    Notice
of Disqualifying Disposition of Incentive Stock Option           Shares.
If the Option granted to Optionee herein is an Incentive           Stock Option, and if
Optionee sells or otherwise disposes of any of the Shares           acquired pursuant to
the Incentive Stock Option on or before the later of (i)           the date two years
after the Date of Grant, or (ii) the date one year after the           date of exercise,
Optionee shall immediately notify the Company in writing of           such disposition.
Optionee acknowledges and agrees that he or she may be subject           to income tax
withholding by the Company on the compensation income recognized           by Optionee
from the early disposition by payment in cash or out of the current           earnings
paid to Optionee.  

4 

        11.    Withholding
Tax Obligations.  

            (a)    General
Withholding Obligations. As a condition to the           exercise of
Option granted hereunder, Optionee shall make such arrangements as           the
Administrator may require for the satisfaction of any federal, state, local           or
foreign withholding tax obligations that may arise in connection with the
          exercise, receipt or vesting of the Option. The Company shall not be required
to           issue any Shares under the Plan until such obligations are satisfied.
Optionee           understands that, upon exercising a Nonstatutory Stock Option, he or
she will           recognize income for tax purposes in an amount equal to the excess of
the then           Fair Market Value of the Shares over the Exercise Price. If Optionee
is an           employee, the Company will be required to withhold from Optionee’s
          compensation, or collect from Optionee and pay to the applicable taxing
          authorities an amount equal to a percentage of this compensation income.
          Additionally, Optionee may at some point be required to satisfy tax withholding
          obligations with respect to the disqualifying disposition of an Incentive Stock
          Option. Optionee shall satisfy his or her tax withholding obligation arising
          upon the exercise of this Option by one or some combination of the following
          methods: (i) by cash or check payment, (ii) out of Optionee’s current
          compensation, (iii) if permitted by the Administrator, in its discretion, by
          surrendering to the Company Shares which (A) in the case of Shares previously
          acquired from the Company, have been owned by Optionee for more than six months
          on the date of surrender, and (B) have a Fair Market Value determined as of the
          applicable Tax Date (as defined in Section 11(c) below) on the date of
surrender           equal to the amount required to be withheld, or (iv) by electing to
have the           Company withhold from the Shares to be issued upon exercise of the
Option, or           the Shares to be issued in connection with the Stock Purchase Right,
if any,           that number of Shares having a Fair Market Value determined as of the
applicable           Tax Date equal to the amount required to be withheld.  

            (b)    Stock
Withholding to Satisfy Withholding Tax Obligations.           In the event
the Administrator allows Optionee to satisfy his or her tax           withholding
obligations as provided in Section 11(a)(iii) or (iv) above, such           satisfaction
must comply with the requirements of this Section (11)(b) and all           applicable
laws. All elections by Optionee to have Shares withheld to satisfy           tax
withholding obligations shall be made in writing in a form acceptable to the
          Administrator and shall be subject to the following restrictions:  

                (i)              the
election must be made on or prior to the applicable Tax Date (as defined in
          Section 11(c) below);  

                (ii)              once
made, the election shall be irrevocable as to the particular Shares of the
          Option as to which the election is made; and  

5 

                (iii)              all
elections shall be subject to the consent or disapproval of the           Administrator.  

        In
the event the election to have Shares withheld is made by Optionee and the Tax Date is
deferred under Section 83 of the Code because no election is filed under Section 83(b) of
the Code, Optionee shall receive the full number of Shares with respect to which the
Option is exercised but Optionee shall be unconditionally obligated to tender back to the
Company the proper number of Shares on the Tax Date. 

            (c)    Definitions.
For purposes of this Section 11, the Fair           Market Value of the Shares to be
withheld shall be determined on the date that           the amount of tax to be withheld
is to be determined under the Applicable Laws           (the “Tax Date”).  

        12.    Market
Standoff Agreement. In connection with the initial           public
offering of the Company’s securities and upon request of the Company           or
the underwriters managing such underwritten offering of the Company’s
          securities, Optionee agrees not to sell, make any short sale of, loan, grant
any           option for the purchase of, or otherwise dispose of any securities of the
          Company (other than those included in the registration) without the prior
          written consent of the Company or such underwriters, as the case may be, for
          such period of time (not to exceed 180 days) from the effective date of such
          registration as may be requested by the Company or such managing underwriters
          and to execute an agreement reflecting the foregoing as may be requested by the
          underwriters at the time of the Company’s initial public offering.  

[Signature Page Follows] 

6 

        This
Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one document. 

		AURIGA LABORATORIES, INC.
	

 	By:  /s/ Philip S. Pesin
	
 	Name:  Philip S. Pesin
		Title:  Chief Executive Officer

        OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION HEREOF IS EARNED
ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY’S
STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE
ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR
SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO
TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE. 

        Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is familiar with
the terms and provisions thereof, and hereby accepts this Option subject to all of the
terms and provisions thereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to executing this
Option and fully understands all provisions of the Option. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option. 

	Dated:  2/8/2007	/s/ Trevor Pokorney
		Signature

7 

EXHIBIT A 

AURIGA LABORATORIES,
INC.  

2007 Stock Option Plan

EARLY EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT  

        This
Agreement (“Agreement”) is made as of __________________________, by and
between Auriga Laboratories, Inc., a Delaware corporation (the
“Company”), and __________________________________
(“Purchaser”). To the extent any capitalized terms used in this Agreement are
not defined, they shall have the meaning ascribed to them in the 2007 Stock Option Plan. 

        1.    Exercise
of Option. Subject to the terms and conditions           hereof, Purchaser
hereby elects to exercise his or her option to purchase           _________________
shares of the Common Stock (the “Shares”) of           the Company under
and pursuant to the Company’s 2007 Stock Option Plan (the           “Plan”)
and the Stock Option Agreement dated _________________           (the “Option
Agreement”). Of these Shares, Purchaser has           elected to purchase
_________________ of those Shares which have become vested           as of the date
hereof under the Vesting Schedule set forth in the Notice of           Stock Option Grant
(the “Vested Shares”) and ____________           Shares which have not
yet vested under such Vesting Schedule (the           “Unvested Shares”).
The purchase price for the Shares shall be           $____________ per Share for a total
purchase price of $_______________, which           amount shall be paid for by a check
in the amount of $____________. The term           “Shares” refers to
the purchased Shares and all securities           received in replacement of the Shares
or as stock dividends or splits, all           securities received in replacement of the
Shares in a recapitalization, merger,           reorganization, exchange or the like, and
all new, substituted or additional           securities or other properties to which
Purchaser is entitled by reason of           Purchaser’s ownership of the Shares.  

        2.    Time
and Place of Exercise. The purchase and sale of the           Shares under
this Agreement shall occur at the principal office of the Company
          simultaneously with the execution and delivery of this Agreement in accordance
          with the provisions of Section 2(b) of the Option Agreement. On such date, the
          Company will deliver to Purchaser a certificate representing the Shares to be
          purchased by Purchaser (which shall be issued in Purchaser’s name) against
          payment of the purchase price therefor by Purchaser by (a) check made payable
to           the Company, (b) cancellation of indebtedness of the Company to Purchaser,
(c)           delivery of shares of the Common Stock of the Company in accordance with
Section           3 of the Option Agreement, or (d) a combination of the foregoing.  

        3.    Limitations
on Transfer. In addition to any other           limitation on transfer
created by applicable securities laws, Purchaser shall           not assign, encumber or
dispose of any interest in the Shares while the Shares           are subject to the
Company’s Repurchase Option (as defined below). After           any Shares have been
released from such Repurchase Option, Purchaser shall not           assign, encumber or
dispose of any interest in such Shares except in compliance           with the provisions
below and applicable securities laws.  

            (a)    Repurchase
Option.  

A-1 

                (i)              In
the event of the voluntary or involuntary termination of Purchaser’s
          employment or consulting relationship with the Company for any reason
(including           death or disability), with or without cause, the Company shall upon
the date of           such termination (the “Termination Date”) have an
irrevocable,           exclusive option (the “Repurchase Option”) for a
period of 90           days from such date to repurchase all or any portion of the Shares
held by           Purchaser as of the Termination Date which have not yet been released
from the           Company’s Repurchase Option at the original purchase price per
Share           specified in Section 1 (adjusted for any stock splits, stock dividends
and the           like).  

                (ii)              Unless
the Company notifies Purchaser within 90 days from the date of           termination of
Purchaser’s employment or consulting relationship that it           does not intend
to exercise its Repurchase Option with respect to some or all of           the Shares,
the Repurchase Option shall be deemed automatically exercised by the           Company as
of the 90th day following such termination, provided that the Company           may
notify Purchaser that it is exercising its Repurchase Option as of a date           prior
to such 90th day. Unless Purchaser is otherwise notified by the Company
          pursuant to the preceding sentence that the Company does not intend to exercise
          its Repurchase Option as to some or all of the Shares to which it applies at
the           time of termination, execution of this Agreement by Purchaser constitutes
          written notice to Purchaser of the Company’s intention to exercise its
          Repurchase Option with respect to all Shares to which such Repurchase Option
          applies. The Company, at its choice, may satisfy its payment obligation to
          Purchaser with respect to exercise of the Repurchase Option by either (A)
          delivering a check to Purchaser in the amount of the purchase price for the
          Shares being repurchased, or (B) in the event Purchaser is indebted to the
          Company, canceling an amount of such indebtedness equal to the purchase price
          for the Shares being repurchased, or (C) by a combination of (A) and (B) so
that           the combined payment and cancellation of indebtedness equals such purchase
          price. In the event of any deemed automatic exercise of the Repurchase Option
          pursuant to this Section 3(a)(ii) in which Purchaser is indebted to the
Company,           such indebtedness equal to the purchase price of the Shares being
repurchased           shall be deemed automatically canceled as of the 90th day following
termination           of Purchaser’s employment or consulting relationship unless
the Company           otherwise satisfies its payment obligations. As a result of any
repurchase of           Shares pursuant to this Section 3(a), the Company shall become
the legal and           beneficial owner of the Shares being repurchased and shall have
all rights and           interest therein or related thereto, and the Company shall have
the right to           transfer to its own name the number of Shares being repurchased by
the Company,           without further action by Purchaser.  

                (iii)              One
hundred percent (100%) of the Shares shall initially be subject to the
          Repurchase Option. The Unvested Shares shall be released from the Repurchase
          Option in accordance with the Vesting Schedule set forth in the Notice of Stock
          Option Grant until all Shares are released from the Repurchase Option.
          Fractional shares shall be rounded to the nearest whole share.  

            (b)    Right
of First Refusal. Before any Shares held by Purchaser           or any
transferee of Purchaser (either being sometimes referred to herein as the           “Holder”)
may be sold or otherwise transferred (including           transfer by gift or operation
of law), the Company or its assignee(s) shall have           a right of first refusal to
purchase the Shares on the terms and conditions set           forth in this Section 3(b)
(the “Right of First Refusal”).  

A-2 

                (i)    Notice
of Proposed Transfer. The Holder of the Shares shall           deliver to
the Company a written notice (the “Notice”) stating:           (i) the
Holder’s bona fide intention to sell or otherwise transfer such           Shares;
(ii) the name of each proposed purchaser or other transferee           (“Proposed
Transferee”); (iii) the number of Shares to be           transferred to each
Proposed Transferee; and (iv) the terms and conditions of           each proposed sale or
transfer. The Holder shall offer the Shares at the same           price (the “Offered
Price”) and upon the same terms (or terms           as similar as reasonably
possible) to the Company or its assignee(s).  

                (ii)    Exercise
of Right of First Refusal. At any time within 30           days after
receipt of the Notice, the Company and/or its assignee(s) may, by           giving
written notice to the Holder, elect to purchase all, but not less than           all, of
the Shares proposed to be transferred to any one or more of the Proposed
          Transferees, at the purchase price determined in accordance with subsection
          (iii) below.  

                (iii)    Purchase
Price. The purchase price (“Purchase           Price”)
for the Shares purchased by the Company or its assignee(s)           under this Section
3(b) shall be the Offered Price. If the Offered Price           includes consideration
other than cash, the cash equivalent value of the           non-cash consideration shall
be determined by the Board of Directors of the           Company in good faith.  

                (iv)    Payment.
Payment of the Purchase Price shall be made, at           the option of the Company or
its assignee(s), in cash (by check), by           cancellation of all or a portion of any
outstanding indebtedness of the Holder           to the Company (or, in the case of
repurchase by an assignee, to the assignee),           by net exercise pursuant to
Section 2(c) of the Option Agreement, or by any           combination thereof within 30
days after receipt of the Notice or in the manner           and at the times set forth in
the Notice.  

                (v)    Holder’s
Right to Transfer. If all of the Shares           proposed in the Notice
to be transferred to a given Proposed Transferee are not           purchased by the
Company and/or its assignee(s) as provided in this Section           3(b), then the
Holder may sell or otherwise transfer such Shares to that           Proposed Transferee
at the Offered Price or at a higher price, provided that           such sale or other
transfer is consummated within 60 days after the date of the           Notice and
provided further that any such sale or other transfer is effected in           accordance
with any applicable securities laws and the Proposed Transferee           agrees in
writing that the provisions of this Section 3 shall continue to apply           to the
Shares in the hands of such Proposed Transferee. If the Shares described           in the
Notice are not transferred to the Proposed Transferee within such period,           or if
the Holder proposes to change the price or other terms to make them more
          favorable to the Proposed Transferee, a new Notice shall be given to the
          Company, and the Company and/or its assignees shall again be offered the Right
          of First Refusal before any Shares held by the Holder may be sold or otherwise
          transferred.  

                (vi)    Exception
for Certain Family Transfers. Anything to the           contrary contained
in this Section 3(b) notwithstanding, the transfer of any or           all of the Shares
during Purchaser’s lifetime or on Purchaser’s death           by will or
intestacy to Purchaser’s Immediate Family (as defined below) or           a trust
for the benefit of Purchaser’s Immediate Family shall be exempt           from the
provisions of this Section 3(b). “Immediate Family” as           used
herein shall mean spouse, lineal descendant or antecedent, father, mother,
          brother or sister. In such case, the transferee or other recipient shall
receive           and hold the Shares so transferred subject to the provisions of this
Section,           and there shall be no further transfer of such Shares except in
accordance with           the terms of this Section 3.  

A-3 

            (c)    Involuntary
Transfer.  

                (i)    Company’s
Right to Purchase upon Involuntary Transfer.           In the event, at
any time after the date of this Agreement, of any transfer by           operation of law
or other involuntary transfer (including divorce or death, but           excluding, in
the event of death, a transfer to Immediate Family as set forth in           Section
3(b)(vi) above) of all or a portion of the Shares by the record holder           thereof,
the Company shall have the right to purchase all of the Shares           transferred at
the greater of the purchase price paid by Purchaser pursuant to           this Agreement
or the Fair Market Value of the Shares on the date of transfer.           Upon such a
transfer, the person acquiring the Shares shall promptly notify the           Secretary
of the Company of such transfer. The right to purchase such Shares           shall be
provided to the Company for a period of 30 days following receipt by           the
Company of written notice by the person acquiring the Shares.  

                (ii)    Price
for Involuntary Transfer. With respect to any stock           to be
transferred pursuant to Section 3(c)(i), the price per Share shall be a           price
set by the Board of Directors of the Company that will reflect the current
          value of the stock in terms of present earnings and future prospects of the
          Company. The Company shall notify Purchaser or his or her executor of the price
          so determined within 30 days after receipt by it of written notice of the
          transfer or proposed transfer of Shares. However, if the Purchaser does not
          agree with the valuation as determined by the Board of Directors of the
Company,           the Purchaser shall be entitled to have the valuation determined by an
          independent appraiser to be mutually agreed upon by the Company and the
          Purchaser and whose fees shall be borne equally by the Company and the
          Purchaser.  

            (d)    Assignment.
The right of the Company to purchase any part           of the Shares may be assigned in
whole or in part to any shareholder or           shareholders of the Company or other
persons or organizations.  

            (e)    Restrictions
Binding on Transferees. All transferees of           Shares or any
interest therein will receive and hold such Shares or interest           subject to the
provisions of this Agreement, including, insofar as applicable,           the Repurchase
Option. In the event of any purchase by the Company hereunder           where the Shares
or interest are held by a transferee, the transferee shall be           obligated, if
requested by the Company, to transfer the Shares or interest to           the Purchaser
for consideration equal to the amount to be paid by the Company           hereunder. In
the event the Repurchase Option is deemed exercised by the Company           pursuant to
Section 3(a)(ii) hereof, the Company may deem any transferee to have
          transferred the Shares or interest to Purchaser prior to their purchase by the
          Company, and payment of the purchase price by the Company to such transferee
          shall be deemed to satisfy Purchaser’s obligation to pay such transferee
          for such Shares or interest, and also to satisfy the Company’s obligation
          to pay Purchaser for such Shares or interest. Any sale or transfer of the
Shares           shall be void unless the provisions of this Agreement are satisfied.  

A-4 

            (f)    Termination
of Rights. The Right of First Refusal and the           Company’s
right to repurchase the Shares in the event of an involuntary           transfer pursuant
to Section 3(c) above shall terminate upon the listing of           Common Stock of the
Company on a national exchange.  

            (g)    Market
Standoff Agreement. In connection with the initial           public
offering of the Company’s securities and upon request of the Company           or
the underwriters managing such underwritten offering of the Company’s
          securities, Purchaser agrees not to sell, make any short sale of, loan, grant
          any option for the purchase of, or otherwise dispose of any securities of the
          Company (other than those included in the registration) without the prior
          written consent of the Company or such underwriters, as the case may be, for
          such period of time (not to exceed 180 days) from the effective date of such
          registration as may be requested by the Company or such managing underwriters
          and to execute an agreement reflecting the foregoing as may be requested by the
          underwriters at the time of the Company’s initial public offering.  

        4.    Escrow
of Unvested Shares. For purposes of facilitating the           enforcement
of the provisions of Section 3 above, Purchaser agrees, immediately           upon
receipt of the certificate(s) for the Shares subject to the Repurchase           Option,
to deliver such certificate(s), together with an Assignment Separate           from
Certificate in the form attached to this Agreement as Attachment A          executed
by Purchaser and by Purchaser’s spouse (if required for transfer),           in
blank, to the Secretary of the Company, or the Secretary’s designee, to
          hold such certificate(s) and Assignment Separate from Certificate in escrow and
          to take all such actions and to effectuate all such transfers and/or releases
as           are in accordance with the terms of this Agreement. Purchaser hereby
          acknowledges that the Secretary of the Company, or the Secretary’s
          designee, is so appointed as the escrow holder with the foregoing authorities
as           a material inducement to make this Agreement and that said appointment is
          coupled with an interest and is accordingly irrevocable. Purchaser agrees that
          said escrow holder shall not be liable to any party hereof (or to any other
          party). The escrow holder may rely upon any letter, notice or other document
          executed by any signature purported to be genuine and may resign at any time.
          Purchaser agrees that if the Secretary of the Company, or the Secretary’s
          designee, resigns as escrow holder for any or no reason, the Board of Directors
          of the Company shall have the power to appoint a successor to serve as escrow
          holder pursuant to the terms of this Agreement.  

        5.    Investment
and Taxation Representations. In connection with           the purchase of
the Shares, Purchaser represents to the Company the following:  

            (a)              Purchaser
is aware of the Company’s business affairs and financial           condition and has
acquired sufficient information about the Company to reach an           informed and
knowledgeable decision to acquire the Shares. Purchaser is           purchasing the
Shares for investment for his or her own account only and not           with a view to,
or for resale in connection with, any “distribution”          thereof within
the meaning of the Securities Act. Purchaser does not have any           present
intention to transfer the Shares to any other person or entity.  

            (b)              Purchaser
understands that the Shares have not been registered under the           Securities Act
by reason of a specific exemption therefrom, which exemption           depends upon,
among other things, the bona fide nature of Purchaser’s           investment intent
as expressed herein.  

A-5 

            (c)              Purchaser
understands that the Shares are “restricted securities”          under
applicable U.S. federal and state securities laws and that, pursuant to           these
laws, Purchaser must hold the Shares indefinitely unless they are           registered
with the Securities and Exchange Commission and qualified by state           authorities,
or an exemption from such registration and qualification           requirements is
available. Purchaser acknowledges that the Company has no           obligation to
register or qualify the Shares for resale. Purchaser further           acknowledges that
if an exemption from registration or qualification is           available, it may be
conditioned on various requirements including, but not           limited to, the time and
manner of sale, the holding period for the Shares, and           requirements relating to
the Company which are outside of the Purchaser’s           control, and which the
Company is under no obligation and may not be able to           satisfy.  

            (d)              Purchaser
understands that Purchaser may suffer adverse tax consequences as a           result of
Purchaser’s purchase or disposition of the Shares. Purchaser           represents
that Purchaser has consulted any tax consultants Purchaser deems           advisable in
connection with the purchase or disposition of the Shares and that           Purchaser is
not relying on the Company for any tax advice.  

        6.    Restrictive
Legends and Stop-Transfer Orders.  

            (a)    Legends.
The certificate or certificates representing the           Shares shall bear the
following legends (as well as any legends required by           applicable state and
federal corporate and securities laws):  

                (i)              THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
          VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
          OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
          RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
          THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.  

                (ii)              THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE
          WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY
          OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.  

            (b)    Stop-Transfer
Notices. Purchaser agrees that, in order to           ensure compliance
with the restrictions referred to herein, the Company may           issue appropriate
“stop transfer” instructions to its transfer agent,           if any, and that,
if the Company transfers its own securities, it may make           appropriate notations
to the same effect in its own records.  

            (c)    Refusal
to Transfer. The Company shall not be required (i)           to transfer
on its books any Shares that have been sold or otherwise transferred           in
violation of any of the provisions of this Agreement or (ii) to treat as           owner
of such Shares or to accord the right to vote or pay dividends to any           purchaser
or other transferee to whom such Shares shall have been so           transferred.  

A-6 

            (d)    Removal
of Legend. When all of the following events have           occurred, the
Shares then held by Purchaser will no longer be subject to the           legend referred
to in Section 6(a)(ii): (i) the termination of the Right of           First Refusal; (ii)
the expiration or termination of the market standoff           provisions of Section 3(g)
(and of any agreement entered pursuant to Section           3(g)); and (iii) the
expiration or exercise in full of the Repurchase Option.           After such time, and
upon Purchaser’s request, a new certificate or           certificates representing
the Shares not repurchased shall be issued without the           legend referred to in
Section 6(a)(ii), and delivered to Purchaser.  

        7.    No
Employment Rights. Nothing in this Agreement shall           affect in any
manner whatsoever the right or power of the Company, or a Parent           or Subsidiary
of the Company, to terminate Purchaser’s employment or           consulting
relationship, for any reason, with or without cause.  

        8.    Section
83(b) Election. Purchaser understands that Section           83(a) of the
Internal Revenue Code of 1986, as amended (the           “Code”), taxes
as ordinary income for a Nonstatutory Stock           Option and as alternative minimum
taxable income for an Incentive Stock Option           the difference between the amount
paid for the Shares and the Fair Market Value           of the Shares as of the date any
restrictions on the Shares lapse. In this           context, “restriction” means
the right of the Company to buy           back the Shares pursuant to the Repurchase
Option set forth in Section 3(a) of           this Agreement. Purchaser understands that
Purchaser may elect to be taxed at           the time the Shares are purchased, rather
than when and as the Repurchase Option           expires, by filing an election under
Section 83(b) (an “83(b)           Election”) of the Code with the
Internal Revenue Service within 30 days           from the date of purchase. Even if the
Fair Market Value of the Shares at the           time of the execution of this Agreement
equals the amount paid for the Shares,           the election must be made to avoid
income and alternative minimum tax treatment           under Section 83(a) in the future.
Purchaser understands that failure to file           such an election in a timely manner
may result in adverse tax consequences for           Purchaser. Purchaser further
understands that an additional copy of such           election form should be filed with
his or her federal income tax return for the           calendar year in which the date of
this Agreement falls. Purchaser acknowledges           that the foregoing is only a
summary of the effect of United States federal           income taxation with respect to
purchase of the Shares hereunder, and does not           purport to be complete.
Purchaser further acknowledges that the Company has           directed Purchaser to seek
independent advice regarding the applicable           provisions of the Code, the income
tax laws of any municipality, state or           foreign country in which Purchaser may
reside, and the tax consequences of           Purchaser’s death.  

        Purchaser
agrees that he or she will execute and deliver to the Company with this executed Agreement
a copy of the Acknowledgment and Statement of Decision Regarding Section 83(b) Election
(the “Acknowledgment”) attached hereto as Attachment B. Purchaser
further agrees that he or she will execute and submit with the Acknowledgment a copy of
the 83(b) Election attached hereto as Attachment C (for tax purposes in connection
with the early exercise of an option) if Purchaser has indicated in the Acknowledgment his
or her decision to make such an election. 

        9.    Miscellaneous.  

A-7 

            (a)    Governing
Law. This Agreement and all acts and transactions           pursuant
hereto and the rights and obligations of the parties hereto shall be           governed,
construed and interpreted in accordance with the laws of the State of           Georgia,
without giving effect to principles of conflicts of law.  

            (b)    Entire
Agreement; Enforcement of Rights. This Agreement           sets forth the
entire agreement and understanding of the parties relating to the           subject
matter herein and merges all prior discussions between them. No           modification of
or amendment to this Agreement, nor any waiver of any rights           under this
Agreement, shall be effective unless in writing signed by the parties           to this
Agreement. The failure by either party to enforce any rights under this
          Agreement shall not be construed as a waiver of any rights of such party.  

            (c)    Severability.
If one or more provisions of this Agreement           are held to be unenforceable under
applicable law, the parties agree to           renegotiate such provision in good faith.
In the event that the parties cannot           reach a mutually agreeable and enforceable
replacement for such provision, then           (i) such provision shall be excluded from
this Agreement, (ii) the balance of           the Agreement shall be interpreted as if
such provision were so excluded and           (iii) the balance of the Agreement shall be
enforceable in accordance with its           terms.  

            (d)    Construction.
This Agreement is the result of negotiations           between and has been reviewed by
each of the parties hereto and their respective           counsel, if any; accordingly,
this Agreement shall be deemed to be the product           of all of the parties hereto,
and no ambiguity shall be construed in favor of or           against any one of the
parties hereto.  

            (e)    Notices.
Any notice required or permitted by this Agreement           shall be in writing and
shall be deemed sufficient when delivered personally or           sent by telegram or fax
or 48 hours after being deposited in the U.S. mail, as           certified or registered
mail, with postage prepaid, and addressed to the party           to be notified at such
party’s address as set forth below or as           subsequently modified by written
notice.  

            (f)    Counterparts.
This Agreement may be executed in two or more           counterparts, each of which shall
be deemed an original and all of which           together shall constitute one
instrument.  

            (g)    Successors
and Assigns. The rights and benefits of this           Agreement shall
inure to the benefit of, and be enforceable by the           Company’s successors
and assigns. The rights and obligations of Purchaser           under this Agreement may
only be assigned with the prior written consent of the           Company.  

            (h)    Georgia
Corporate Securities Law. THE SALE OF THE           SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH           THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF GEORGIA, OR ANY OTHER STATE,           AND THE ISSUANCE OF
THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE           CONSIDERATION
THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE           OF SECURITIES
IS EXEMPT FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS           AGREEMENT ARE
EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED,           UNLESS THE SALE IS
SO EXEMPT.  

A-8 

                (i)    California
Corporate Securities Law. THE SALE OF THE           SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH           THE DEPARTMENT OF
CORPORATIONS OF THE STATE OF CALIFORNIA, OR ANY OTHER STATE,           AND THE ISSUANCE
OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE           CONSIDERATION
THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE           OF SECURITIES
IS EXEMPT FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS           AGREEMENT ARE
EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED,           UNLESS THE SALE IS
SO EXEMPT.  

[Signature Page Follows] 

A-9 

        The
parties have executed this Agreement as of the date first set forth above. 

		COMPANY:
	
 	AURIGA LABORATORIES, INC.
	

 	By:___________________________________________
	
 	Name:_________________________________________
	
 	Title:__________________________________________
	
 	Address:  2029 Century Park East, Suite 1130
		                  Los Angeles, CA 90067
	

 	PURCHASER:
	

 	________________________________________________
		Signature
	
 	________________________________________________
		Print Name
	
 	________________________________________________
		Address
	
 	________________________________________________
		Address

A-10 

ATTACHMENT A 

ASSIGNMENT SEPARATE
FROM CERTIFICATE 

        FOR
VALUE RECEIVED and pursuant to that certain Early Exercise Notice and Restricted Stock
Purchase Agreement between the undersigned (“Purchaser”) and Auriga
Laboratories, Inc. (the “Company”) dated _______________, ____ (the
“Agreement”), Purchaser hereby sells, assigns and transfers unto the
Company _________________________________ (________) shares of the Common Stock of the
Company, standing in Purchaser’s name on the books of the Company and represented by
Certificate No. ____, and does hereby irrevocably constitute and appoint
________________________________________________ to transfer said stock on the books of
the Company with full power of substitution in the premises. THIS ASSIGNMENT MAY ONLY BE
USED AS AUTHORIZED BY THE AGREEMENT AND THE ATTACHMENTS THERETO. 

Dated: ______________________ 

	 	Signature:
	

 	________________________________________________
		Signature
	

 	________________________________________________
		Print Name

Instruction: Please do not
fill in any blanks other than the signature line. The purpose of this assignment is to
enable the Company to exercise its Repurchase Option set forth in the Agreement without
requiring additional signatures on the part of Purchaser. 

A-A-1 

ATTACHMENT B 

ACKNOWLEDGMENT AND
STATEMENT OF DECISION 
REGARDING SECTION 83(b) ELECTION 

        The
undersigned (which term includes the undersigned’s spouse), a purchaser of
___________ shares of Common Stock of Auriga Laboratories, Inc., a Delaware corporation
(the “Company”) by exercise of an option (the “Option”)
granted pursuant to the Company’s 2007 Stock Option Plan (the
“Plan”), hereby states as follows: 

        1.              The
undersigned acknowledges receipt of a copy of the Plan relating to the           offering
of such shares. The undersigned has carefully reviewed the Plan and the           option
agreement pursuant to which the Option was granted.  

        2.              The
undersigned either [check and complete as applicable]:  

	 	(a) 	_____ 	  has
consulted, and has been fully advised by, the undersigned’s own                tax
advisor, _____________________________________, whose business address is
               ______________________________, regarding the federal, state and local tax
               consequences of purchasing shares under the Plan, and particularly
regarding the                advisability of making elections pursuant to Section 83(b)
of the Internal                Revenue Code of 1986, as amended (the “Code”)
and pursuant to                the corresponding provisions, if any, of applicable state
law; or  

	 	 (b)	_____ 	has
knowingly chosen not to consult such a tax advisor. 

        3.              The
undersigned hereby states that the undersigned has decided [check as
          applicable]:  

	 	(a)	_____ 	 to
make an election pursuant to Section 83(b) of the Code, and is                submitting
to the Company, together with the undersigned’s executed Early
               Exercise Notice and Restricted Stock Purchase Agreement, an executed form
               entitled “Election Under Section 83(b) of the Internal Revenue Code
of                1986;” or  

	 	(b)	_____ 	 not
to make an election pursuant to Section 83(b) of the Code.  

        4.              Neither
the Company nor any subsidiary or representative of the Company has made           any
warranty or representation to the undersigned with respect to the tax
          consequences of the undersigned’s purchase of shares under the Plan or of
          the making or failure to make an election pursuant to Section 83(b) of the Code
          or the corresponding provisions, if any, of applicable state law.  

	Date:_______________________________	________________________________________________
		Signature

A-B-1 

ATTACHMENT C 

ELECTION UNDER SECTION
83(b) 
OF THE INTERNAL
REVENUE CODE OF 1986 

        The
undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue
Code, to include in taxpayer’s gross income or alternative minimum taxable income, as
applicable, for the current taxable year, the amount of any income that may be taxable to
taxpayer in connection with taxpayer’s receipt of the property described below: 

        1.              The
name, address, taxpayer identification number and taxable year of the
          undersigned are as follows:  

	 	
NAME
OF TAXPAYER: _________________________________ 

	 	
ADDRESS: ________________________________________ 

	 	
  ________________________________________ 

	 	
IDENTIFICATION
NO. OF TAXPAYER: ___________________ 

	 	
TAXABLE
YEAR: __________ 

        2.              The
property with respect to which the election is made is described as follows:  

	 	
_________________
shares of the Common Stock of Auriga Laboratories, Inc., a Delaware corporation (the
“Company”). 

        3.              The
date on which the property was transferred is: _______________  

        4.              The
property is subject to the following restrictions:  

	 	
Repurchase
option at cost in favor of the Company upon termination of taxpayer’s employment or
consulting relationship. 

        5.              The
fair market value at the time of transfer, determined without regard to any
          restriction other than a restriction which by its terms will never lapse, of
          such property is: $____________________  

The amount (if any) paid for such
property: $____________________ 

The undersigned has submitted a copy
of this statement to the person for whom the services were performed in connection with
the undersigned’s receipt of the above-described property. The transferee of such
property is the person performing the services in connection with the transfer of said
property. 

The undersigned understands that the
foregoing election may not be revoked except with the consent of the Commissioner. 

	Dated:_______________________________	________________________________________________
		Signature

A-C-1 

RECEIPT AND CONSENT 

        The
undersigned hereby acknowledges receipt of a photocopy of Certificate No. ______ for
__________________ shares of Common Stock of Auriga Laboratories, Inc. (the
“Company”). 

        The
undersigned further acknowledges that the Secretary of the Company, or his or her
designee, is acting as escrow holder pursuant to the Early Exercise Notice and Restricted
Stock Purchase Agreement Purchaser has previously entered into with the Company. As escrow
holder, the Secretary of the Company, or his or her designee, holds the original of the
aforementioned certificate issued in the undersigned’s name. 

	Dated:_______________________________	________________________________________________
		Name

EXHIBIT B 

AURIGA LABORATORIES,
INC. 

2007 Stock Option Plan 
EXERCISE NOTICE AND
RESTRICTED STOCK PURCHASE AGREEMENT 

        This
Agreement (“Agreement”) is made as of ______________, by and between
Auriga Laboratories, Inc., a Delaware corporation (the “Company”), and
____________ (“Purchaser”). To the extent any capitalized terms used in
this Agreement are not defined, they shall have the meaning ascribed to them in the 2007
Stock Option Plan. 

        1.    Exercise
of Option. Subject to the terms and conditions           hereof, Purchaser
hereby elects to exercise his or her option to purchase           __________ shares of
the Common Stock (the “Shares”) of the           Company under and
pursuant to the Company’s 2007 Stock Option Plan (the           “Plan”)
and the Stock Option Agreement dated ______________,           (the “Option
Agreement”). The purchase price for the Shares           shall be $_________ per
Share for a total purchase price of $_______________.           The term “Shares” refers
to the purchased Shares and all           securities received in replacement of the
Shares or as stock dividends or           splits, all securities received in replacement
of the Shares in a           recapitalization, merger, reorganization, exchange or the
like, and all new,           substituted or additional securities or other properties to
which Purchaser is           entitled by reason of Purchaser’s ownership of the
Shares.  

        2.    Time
and Place of Exercise. The purchase and sale of the           Shares under
this Agreement shall occur at the principal office of the Company
          simultaneously with the execution and delivery of this Agreement in accordance
          with the provisions of Section 2(b) of the Option Agreement. On such date, the
          Company will deliver to Purchaser a certificate representing the Shares to be
          purchased by Purchaser (which shall be issued in Purchaser’s name) against
          payment of the purchase price therefor by Purchaser by (a) check made payable
to           the Company, (b) cancellation of indebtedness of the Company to Purchaser,
(c)           delivery of shares of the Common Stock of the Company in accordance with
Section           3 of the Option Agreement, or (d) a combination of the foregoing.  

        3.    Limitations
on Transfer. In addition to any other           limitation on transfer
created by applicable securities laws, Purchaser shall           not assign, encumber or
dispose of any interest in the Shares except in           compliance with the provisions
below and applicable securities laws.  

            (a)    Right
of First Refusal. Before any Shares held by Purchaser           or any
transferee of Purchaser (either being sometimes referred to herein as the           “Holder”)
may be sold or otherwise transferred (including           transfer by gift or operation
of law), the Company or its assignee(s) shall have           a right of first refusal to
purchase the Shares on the terms and conditions set           forth in this Section 3(a)
(the “Right of First Refusal”).  

                (i)    Notice
of Proposed Transfer. The Holder of the Shares shall           deliver to
the Company a written notice (the “Notice”) stating:           (i) the
Holder’s bona fide intention to sell or otherwise transfer such           Shares;
(ii) the name of each proposed purchaser or other transferee           (“Proposed
Transferee”); (iii) the number of Shares to be           transferred to each
Proposed Transferee; and (iv) the terms and conditions of           each proposed sale or
transfer. The Holder shall offer the Shares at the same           price (the “Offered
Price”) and upon the same terms (or terms           as similar as reasonably
possible) to the Company or its assignee(s).  

B-1 

                (ii)    Exercise
of Right of First Refusal. At any time within 30           days after
receipt of the Notice, the Company and/or its assignee(s) may, by           giving
written notice to the Holder, elect to purchase all, but not less than           all, of
the Shares proposed to be transferred to any one or more of the Proposed
          Transferees, at the purchase price determined in accordance with subsection
          (iii) below.  

                (iii)    Purchase
Price. The purchase price (“Purchase           Price”)
for the Shares purchased by the Company or its assignee(s)           under this Section
3(a) shall be the Offered Price. If the Offered Price           includes consideration
other than cash, the cash equivalent value of the           non-cash consideration shall
be determined by the Board of Directors of the           Company in good faith.  

                (iv)    Payment.
Payment of the Purchase Price shall be made, at           the option of the Company or
its assignee(s), in cash (by check), by           cancellation of all or a portion of any
outstanding indebtedness of the Holder           to the Company (or, in the case of
repurchase by an assignee, to the assignee),           by net exercise pursuant to
Section 2(c) of the Option Agreement, or by any           combination thereof within 30
days after receipt of the Notice or in the manner           and at the times set forth in
the Notice.  

                (v)    Holder’s
Right to Transfer. If all of the Shares           proposed in the Notice
to be transferred to a given Proposed Transferee are not           purchased by the
Company and/or its assignee(s) as provided in this Section           3(a), then the
Holder may sell or otherwise transfer such Shares to that           Proposed Transferee
at the Offered Price or at a higher price, provided that           such sale or other
transfer is consummated within 60 days after the date of the           Notice and
provided further that any such sale or other transfer is effected in           accordance
with any applicable securities laws and the Proposed Transferee           agrees in
writing that the provisions of this Section 3 shall continue to apply           to the
Shares in the hands of such Proposed Transferee. If the Shares described           in the
Notice are not transferred to the Proposed Transferee within such period,           or if
the Holder proposes to change the price or other terms to make them more
          favorable to the Proposed Transferee, a new Notice shall be given to the
          Company, and the Company and/or its assignees shall again be offered the Right
          of First Refusal before any Shares held by the Holder may be sold or otherwise
          transferred.  

                (vi)    Exception
for Certain Family Transfers. Anything to the           contrary contained
in this Section 3(a) notwithstanding, the transfer of any or           all of the Shares
during Purchaser’s lifetime or on Purchaser’s death           by will or
intestacy to Purchaser’s Immediate Family (as defined below) or           a trust
for the benefit of Purchaser’s Immediate Family shall be exempt           from the
provisions of this Section 3(a). “Immediate Family” as           used
herein shall mean spouse, lineal descendant or antecedent, father, mother,
          brother or sister. In such case, the transferee or other recipient shall
receive           and hold the Shares so transferred subject to the provisions of this
Section,           and there shall be no further transfer of such Shares except in
accordance with           the terms of this Section 3.  

B-2 

            (b)    Involuntary
Transfer.  

                (i)    Company’s
Right to Purchase upon Involuntary Transfer.           In the event, at
any time after the date of this Agreement, of any transfer by           operation of law
or other involuntary transfer (including divorce or death, but           excluding, in
the event of death, a transfer to Immediate Family as set forth in           Section
3(a)(vi) above) of all or a portion of the Shares by the record holder           thereof,
the Company shall have the right to purchase all of the Shares           transferred at
the greater of the purchase price paid by Purchaser pursuant to           this Agreement
or the Fair Market Value of the Shares on the date of transfer.           Upon such a
transfer, the person acquiring the Shares shall promptly notify the           Secretary
of the Company of such transfer. The right to purchase such Shares           shall be
provided to the Company for a period of 30 days following receipt by           the
Company of written notice by the person acquiring the Shares.  

                (ii)    Price
for Involuntary Transfer. With respect to any stock           to be
transferred pursuant to Section 3(b)(i), the price per Share shall be a           price
set by the Board of Directors of the Company that will reflect the current
          value of the stock in terms of present earnings and future prospects of the
          Company. The Company shall notify Purchaser or his or her executor of the price
          so determined within 30 days after receipt by it of written notice of the
          transfer or proposed transfer of Shares. However, if the Purchaser does not
          agree with the valuation as determined by the Board of Directors of the
Company,           the Purchaser shall be entitled to have the valuation determined by an
          independent appraiser to be mutually agreed upon by the Company and the
          Purchaser and whose fees shall be borne equally by the Company and the
          Purchaser.  

            (c)    Assignment.
The right of the Company to purchase any part           of the Shares may be assigned in
whole or in part to any shareholder or           shareholders of the Company or other
persons or organizations.  

            (d)    Restrictions
Binding on Transferees. All transferees of           Shares or any
interest therein will receive and hold such Shares or interest           subject to the
provisions of this Agreement. Any sale or transfer of the Shares           shall be void
unless the provisions of this Agreement are satisfied.  

            (e)    Termination
of Rights. The Right of First Refusal and the           Company’s
right to repurchase the Shares in the event of an involuntary           transfer pursuant
to Section 3(b) above shall terminate upon the listing of           Common Stock of the
Company on a national exchange.  

            (f)    Market
Standoff Agreement. In connection with the initial           public
offering of the Company’s securities and upon request of the Company           or
the underwriters managing such underwritten offering of the Company’s
          securities, Purchaser agrees not to sell, make any short sale of, loan, grant
          any option for the purchase of, or otherwise dispose of any securities of the
          Company (other than those included in the registration) without the prior
          written consent of the Company or such underwriters, as the case may be, for
          such period of time (not to exceed 180 days) from the effective date of such
          registration as may be requested by the Company or such managing underwriters
          and to execute an agreement reflecting the foregoing as may be requested by the
          underwriters at the time of the Company’s initial public offering.  

B-3 

        4.    Investment
and Taxation Representations. In connection with           the purchase of
the Shares, Purchaser represents to the Company the following:  

            (a)              Purchaser
is aware of the Company’s business affairs and financial           condition and has
acquired sufficient information about the Company to reach an           informed and
knowledgeable decision to acquire the Shares. Purchaser is           purchasing the
Shares for investment for his or her own account only and not           with a view to,
or for resale in connection with, any “distribution”          thereof within
the meaning of the Securities Act.  

            (b)              Purchaser
understands that the Shares have not been registered under the           Securities Act
by reason of a specific exemption therefrom, which exemption           depends upon,
among other things, the bona fide nature of Purchaser’s           investment intent
as expressed herein.  

            (c)              Purchaser
understands that the Shares are “restricted securities”          under
applicable U.S. federal and state securities laws and that, pursuant to           these
laws, Purchaser must hold the Shares indefinitely unless they are           registered
with the Securities and Exchange Commission and qualified by state           authorities,
or an exemption from such registration and qualification           requirements is
available. Purchaser acknowledges that the Company has no           obligation to
register or qualify the Shares for resale. Purchaser further           acknowledges that
if an exemption from registration or qualification is           available, it may be
conditioned on various requirements including, but not           limited to, the time and
manner of sale, the holding period for the Shares, and           requirements relating to
the Company which are outside of the Purchaser’s           control, and which the
Company is under no obligation and may not be able to           satisfy.  

            (d)              Purchaser
understands that Purchaser may suffer adverse tax consequences as a           result of
Purchaser’s purchase or disposition of the Shares. Purchaser           represents
that Purchaser has consulted any tax consultants Purchaser deems           advisable in
connection with the purchase or disposition of the Shares and that           Purchaser is
not relying on the Company for any tax advice.  

        5.    Restrictive
Legends and Stop-Transfer Orders.  

            (a)    Legends.
The certificate or certificates representing the           Shares shall bear the
following legends (as well as any legends required by           applicable state and
federal corporate and securities laws):  

                (i)              THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
          VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
          OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
          RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
          THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.  

                (ii)              THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE
          WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY
          OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.  

B-4 

            (b)    Stop-Transfer
Notices. Purchaser agrees that, in order to           ensure compliance
with the restrictions referred to herein, the Company may           issue appropriate
“stop transfer” instructions to its transfer agent,           if any, and that,
if the Company transfers its own securities, it may make           appropriate notations
to the same effect in its own records.  

            (c)    Refusal
to Transfer. The Company shall not be required (i)           to transfer
on its books any Shares that have been sold or otherwise transferred           in
violation of any of the provisions of this Agreement or (ii) to treat as           owner
of such Shares or to accord the right to vote or pay dividends to any           purchaser
or other transferee to whom such Shares shall have been so           transferred.  

            (d)    Removal
of Legend. When all of the following events have           occurred, the
Shares then held by Purchaser will no longer be subject to the           legend referred
to in Section 5(a)(ii): (i) the termination of the Right of           First Refusal; and
(ii) the expiration or termination of the market standoff           provisions of Section
3(f) (and of any agreement entered pursuant to Section           3(f)). After such time,
and upon Purchaser’s request, a new certificate or           certificates
representing the Shares not repurchased shall be issued without the           legend
referred to in Section 5(a)(ii), and delivered to Purchaser.  

        6.    No
Employment Rights. Nothing in this Agreement shall           affect in any
manner whatsoever the right or power of the Company, or a Parent           or Subsidiary
of the Company, to terminate Purchaser’s employment or           consulting
relationship, for any reason, with or without cause.  

        7.    Miscellaneous.  

            (a)    Governing
Law. This Agreement and all acts and transactions           pursuant
hereto and the rights and obligations of the parties hereto shall be           governed,
construed and interpreted in accordance with the laws of the State of           Georgia,
without giving effect to principles of conflicts of law.  

            (b)    Entire
Agreement; Enforcement of Rights. This Agreement           sets forth the
entire agreement and understanding of the parties relating to the           subject
matter herein and merges all prior discussions between them. No           modification of
or amendment to this Agreement, nor any waiver of any rights           under this
Agreement, shall be effective unless in writing signed by the parties           to this
Agreement. The failure by either party to enforce any rights under this
          Agreement shall not be construed as a waiver of any rights of such party.  

            (c)    Severability.
If one or more provisions of this Agreement           are held to be unenforceable under
applicable law, the parties agree to           renegotiate such provision in good faith.
In the event that the parties cannot           reach a mutually agreeable and enforceable
replacement for such provision, then           (i) such provision shall be excluded from
this Agreement, (ii) the balance of           the Agreement shall be interpreted as if
such provision were so excluded and           (iii) the balance of the Agreement shall be
enforceable in accordance with its           terms.  

B-5 

            (d)    Construction.
This Agreement is the result of negotiations           between and has been reviewed by
each of the parties hereto and their respective           counsel, if any; accordingly,
this Agreement shall be deemed to be the product           of all of the parties hereto,
and no ambiguity shall be construed in favor of or           against any one of the
parties hereto.  

            (e)    Notices.
Any notice required or permitted by this Agreement           shall be in writing and
shall be deemed sufficient when delivered personally or           sent by telegram or fax
or 48 hours after being deposited in the U.S. mail, as           certified or registered
mail, with postage prepaid, and addressed to the party           to be notified at such
party’s address as set forth below or as           subsequently modified by written
notice.  

            (f)    Counterparts.
This Agreement may be executed in two or more           counterparts, each of which shall
be deemed an original and all of which           together shall constitute one
instrument.  

            (g)    Successors
and Assigns. The rights and benefits of this           Agreement shall
inure to the benefit of, and be enforceable by the           Company’s successors
and assigns. The rights and obligations of Purchaser           under this Agreement may
only be assigned with the prior written consent of the           Company.  

            (h)    Georgia
Corporate Securities Law. THE SALE OF THE           SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH           THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF GEORGIA, OR ANY OTHER STATE,           AND THE ISSUANCE OF
THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE           CONSIDERATION
THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE           OF SECURITIES
IS EXEMPT FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS           AGREEMENT ARE
EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED,           UNLESS THE SALE IS
SO EXEMPT.  

            (i)    California
Corporate Securities Law. THE SALE OF THE           SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH           THE DEPARTMENT OF
CORPORATIONS OF THE STATE OF CALIFORNIA, OR ANY OTHER STATE,           AND THE ISSUANCE
OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE           CONSIDERATION
THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE           OF SECURITIES
IS EXEMPT FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS           AGREEMENT ARE
EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED,           UNLESS THE SALE IS
SO EXEMPT.  

[Signature Page Follows] 

B-6 

        The
parties have executed this Agreement as of the date first set forth above. 

		COMPANY:
	
 	AURIGA LABORATORIES, INC.
	

 	By:___________________________________________
	
 	Name:_________________________________________
	
 	Title:__________________________________________
	
 	Address:  2029 Century Park East, Suite 1130
		                  Los Angeles, CA 90067
	

 	PURCHASER:
	

 	________________________________________________
		Signature
	
 	________________________________________________
		Print Name
	
 	________________________________________________
		Address
	
 	________________________________________________
		Address

B-7 

RECEIPT 

        Auriga
Laboratories, Inc. (the “Company”) hereby acknowledges receipt of (check
as applicable): 

	 	                   _____ 	A
check in the amount of $__________ 

	 	                   _____ 	The
cancellation of indebtedness in the amount of $__________ 

	 	                   _____ 	______
shares of (or cancellation of the right to exercise) the Company's Common
                               Stock with a fair market value of $__________ 

given by ____________ as
consideration for Certificate No. ______ for ___________ shares of Common Stock of the
Company. 

Dated:_________________________ 

		AURIGA LABORATORIES, INC.
	

 	By:______________________________
		      Name:
		      Title:PERFORMANCE HEALTH TECHNOLOGIES, INC.

                              AMENDED AND RESTATED

                            1999 STOCK INCENTIVE PLAN

                                                                 AUGUST 17, 2005

                                     Page 1
<PAGE>

                                TABLE OF CONTENTS

Purpose of the Plan ........................................................   1
Definitions ................................................................   1
Administration of the Plan .................................................   3
Shares Subject to the Plan .................................................   4
Stock
      Options ..............................................................   4
Restricted Stock
      Awards ...............................................................   5
      Grants ...............................................................   5
      Restriction Period ...................................................   6
      Restrictions Upon Transfer ...........................................   6
      Certificates .........................................................   6
      Lapse of Restrictions ................................................   6
      Termination Prior to Lapse of Restrictions ...........................   6
Stock Appreciation Rights ..................................................   6
Right of First Refusal .....................................................   7
Amendment or Termination of the Plan .......................................   7
Term of Plan ...............................................................   8
Rights as Shareholder ......................................................   8
Merger or Consolidation ....................................................   8
Changes in Capital and Corporate Structure .................................   8
Service ....................................................................   8
Withholding of Tax .........................................................   9
Delivery and Registration of Stock .........................................   9

                                     Page 2
<PAGE>

                      PERFORMANCE HEALTH TECHNOLOGIES, INC.

                              AMENDED AND RESTATED
                            1999 STOCK INCENTIVE PLAN

The Performance Health Technologies, Inc. 1999 Stock Incentive Plan was
heretofore adopted by the Board of Directors of Performance Health Technologies,
Inc. and was approved by the Stockholders of Performance Health Technologies,
Inc. The 1999 Stock Incentive Plan was thereafter amended and restated as of May
25, 2001, as approved by the Board of Directors and the Stockholders. The Board
of Directors and Stockholders have approved an additional amendment to the 1999
Stock Incentive Plan which amendment is incorporated in this Amended and
Restated 1999 Stock Incentive Plan. Such amendment increases the number of
shares subject to the 1999 Incentive Stock Plan from 6,000,000 to 9,000,000.
Accordingly, the Performance Health Technologies, Inc. 1999 Stock Incentive Plan
is hereby amended and restated in its entirety as follows and as so amended and
restated shall be referred to as the "Plan."

      1. PURPOSE OF THE PLAN

The Plan is intended to provide a means whereby directors, employees,
consultants and advisors of Performance Health Technologies, Inc., and its
Related Corporations may sustain a sense of proprietorship and personal
involvement in the continued development and financial success of the Company,
and to encourage them to remain with and devote their best efforts to the
business of the Company, thereby advancing the interests of the Company and its
shareholders. Accordingly, the Company may permit certain directors, employees,
consultants and advisors to acquire Shares or otherwise participate in the
financial success of the Company, on the terms and conditions established
herein.

      2. DEFINITIONS

The following terms shall be defined as set forth below:

      a. Board. Shall mean the Board of Directors of the Company.

      b. Cause. Shall mean the commitment of fraud, the misappropriation of or
intentional material damage to the property or business of the Company, the
substantial failure to fulfill the duties and responsibilities of a regular
position and/or comply with Company policies, rules or regulations, or the
conviction of a felony.

      c. Change of Control. Shall mean:

            i.    the consummation of the acquisition by any person (as such
                  term is defined in Section 13(d) or 14(d) of the `34 Act of
                  beneficial ownership (within the meaning of Rule 13d-3
                  promulgated under the `34 Act) of fifty percent (50%) or more
                  of the combined voting power of the then outstanding voting
                  securities of the Company; or

                                     Page 3
<PAGE>

            ii.   the individuals who, as of the date hereof, are members of the
                  Board cease for any reason to constitute a majority of the
                  Board, unless the election, or nomination for election by the
                  stockholders, of any new director was approved by a vote of a
                  majority of the Board, and such new director shall, for
                  purposes of this Agreement, be considered as a member of the
                  Board; or

            iii.  approval by stockholders of the Company of: (1) a merger or
                  consolidation if the stockholders, immediately before such
                  merger or consolidation, do not, as a result of such merger or
                  consolidation, own, directly or indirectly, more than fifty
                  percent (50%) of the combined voting power of the then
                  outstanding voting securities of the entity resulting from
                  such merger or consolidation in substantially the same
                  proportion as their ownership of the combined voting power of
                  the voting securities of the Company outstanding immediately
                  before such merger or consolidation; or (2) a complete
                  liquidation or dissolution or an agreement for the sale or
                  other disposition of all or substantially all of the assets of
                  the Company.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because fifty percent (50%) or more of the combined voting power of the
then outstanding securities of the Company are acquired by: (1) a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained for employees of the entity; or (2) any corporation which,
immediately prior to such acquisition, is owned directly or indirectly by the
stockholders in the same proportion as their ownership of stock immediately
prior to such acquisition.

      d. Code. Shall mean the Internal Revenue Code of 1986 and any amendments
thereto.

      e. Committee. Shall mean the committee appointed by the Board in
accordance with Paragraph 3 hereof.

      f. Company. Shall mean Performance Health Technologies, Inc. and its
Related Corporations.

      g. Compete. Shall mean within a period of one (1) year after the
termination of service, the direct or indirect competition with the business of
the Company, including, but not by way of limitation, the direct or indirect
owning, managing, operating, controlling, financing or serving as an officer,
employee, director or consultant to, or by soliciting or inducing, or attempting
to solicit or induce, any employee or agent of the Company to terminate
employment and become employed by any person, firm, partnership, corporation,
trust or other entity which owns or operates, a business similar to that of the
Company, except with the express prior written consent of the Company.

      h. Disability. Shall mean a physical or mental disability which impairs
the individual's ability to substantially perform his or her current duties for
a period of at least six (6) consecutive months, as determined by the Committee.

                                     Page 4
<PAGE>

      i. ERISA. Shall mean the Employee Retirement Income Security Act of 1974
and any amendment thereto.

      j. Incentive Stock Option. Shall mean an award under the Plan that
satisfies the general requirements of Code Section 422, namely: (i) grantees
must be employees; (ii) the exercise price may not be less than the fair market
value of the underlying Shares at the date of grant; (iii) no more than $100,000
worth of Shares may become exercisable in any year; (iv) the maximum duration of
an award may be ten (10) years; (v) awards must be exercised within three (3)
months after termination of employment; and (vi) Shares received upon exercise
must be retained for the greater of two (2) years from the date of grant or one
(1) year from the date of exercise.

      k. Nonqualified Options. Shall mean an award under the Plan that is not an
Incentive Stock Option.

      l. Related Corporation. Shall mean a corporation which would be a parent
or subsidiary corporation with respect to the Company as defined in Section
424(e) or (f), respectively, of the Code.

      m. Restricted Stock. Shall mean an award of Shares under the Plan that is
restricted as to transfer and subject to forfeiture.

      n. Rule 16b-3. Shall mean Rule 16b-3 of the `34 Act, and any amendments
thereto.

      o. Shares. Shall mean common stock of the Company.

      p. Stock Appreciation Rights. Shall mean rights entitling the grantee to
receive the appreciation in the market value of a stated number of Shares.

      q. '33 Act. Shall mean the Securities Act of 1933 and any amendments
thereto.

      r. '34 Act. Shall mean the Securities Exchange Act of 1934 and any
amendments thereto.

      3. ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Committee which shall be comprised solely
of two (2) or more outside directors (within the meaning of Section 162(m) of
the Code) appointed by the Board. The Committee shall have sole authority to:

            i.    select the directors, employees, consultants and advisors to
                  whom awards shall be granted under the Plan;

            ii.   establish the amount and conditions of each such award;

            iii.  prescribe any legend to be affixed to certificates
                  representing such awards;

            iv.   interpret the Plan; and

                                     Page 5
<PAGE>

            v.    adopt such rules, regulations, forms and agreements, not
                  inconsistent with the provisions of the Plan, as it may deem
                  advisable to carry out the Plan.

All decisions made by the Committee in administering the Plan shall be final.

      4. SHARES SUBJECT TO THE PLAN

The aggregate number of Shares that may be obtained by directors, employees,
consultants and advisors under the Plan shall be 9,000,000 Shares. Any Shares
that remain unissued at the termination of the Plan shall cease to be subject to
the Plan, but until termination of the Plan, the Company shall at all times make
available sufficient Shares to meet the requirements of the Plan.

      5. STOCK OPTIONS

      a. Type of Options. The Company may issue options that constitute
Incentive Stock Options to employees and Nonqualified Options to directors,
employees, consultants and advisors under the Plan. The grant of each option
shall be confirmed by a stock option agreement that shall be executed by the
Company and the optionee as soon as practicable after such grant. The stock
option agreement shall expressly state or incorporate by reference the
provisions of the Plan and state whether the option is an Incentive Option or a
Nonqualified Option.

      b. Terms of Options. Except as provided in Subparagraphs (c) and (d)
below, each option granted under the Plan shall be subject to the terms and
conditions set forth by the Committee in the stock option agreement including,
but not limited to, option price and option term.

      c. Additional Terms Applicable to All Options. Each option shall be
subject to the following terms and conditions:

            i.    Written Notice. An option may be exercised only by giving
                  written notice to the Company specifying the number of Shares
                  to be purchased.

            ii.   Method of Exercise. The aggregate option price shall be paid
                  in any one or a combination of cash, personal check, Shares
                  already owned or Plan awards which the optionee has an
                  immediate right to exercise.

            iii.  Term of Option. No option may be exercised more than ten (10)
                  years after the date of grant.

            iv.   Transferability. No option may be transferred, assigned or
                  encumbered by an optionee, except: (A) by will or the laws of
                  descent and distribution; (B) by gifting for the benefit of
                  descendants for estate planning purposes; or (C) pursuant to a
                  certified domestic relations order.

      d. Additional Terms Applicable to Incentive Options. Each Incentive
Option shall be subject to the following terms and conditions:

                                     Page 6
<PAGE>

            i.    Option Price. The option price per Share shall be 100% of the
                  fair market value of such Share on the date the option is
                  granted. Notwithstanding the preceding sentence, the option
                  price per Share granted to an individual (hereinafter referred
                  to as a "10% Shareholder") who, at the time such option is
                  granted, owns stock possessing more than 10% of the total
                  combined voting power of all classes of stock of the Company
                  shall not be less than 110% of the fair market value of such
                  Share on the date the option is granted.

            ii.   Term of Option. No option granted to a 10% Shareholder may be
                  exercised more than five (5) years after the date of grant.
                  Notwithstanding any other provisions hereof, no option may be
                  exercised more than three (3) months after the optionee
                  terminates employment with the Company, except in the event of
                  Disability or death as provided in Subparagraph (d)(iii)
                  below.

            iii.  Disability or Death of Optionee. If an optionee terminates
                  employment due to Disability or death prior to exercise in
                  full of any options, he or she or his or her beneficiary,
                  executor, administrator or personal representative shall have
                  the right to exercise the options within a period of twelve
                  (12) months after the date of such termination to the extent
                  that the right was exercisable at the date of such termination
                  as provided in the stock option agreement, or subject to such
                  other terms as may be determined by the Committee.

            iv.   Annual Exercise Limit. The aggregate fair market value of
                  Shares which first become exercisable during any calendar year
                  shall not exceed $100,000. For purposes of the preceding
                  sentence, the fair market value of each Share shall be
                  determined on the date the option with respect to such Share
                  is granted.

            v.    Transferability. No option may be transferred, assigned or
                  encumbered by an optionee, except by will or the laws of
                  descent and distribution, and during the optionee's lifetime
                  an option may only be exercised by him or her.

      6. RESTRICTED STOCK AWARDS

      a. Grants. Restricted Stock Awards ("RSAs") under the plan shall be
evidenced by restricted stock agreements in such form and consistent with this
Plan as the Committee shall approve from time to time.

      b. Restriction Period. RSAs awarded under the Plan shall be subject to
such terms, conditions, and restrictions, including without limitation:
prohibitions against transfer; substantial risks of forfeiture; attainment of
performance objectives; repurchase by the Company or right of first refusal for
such period or periods as shall be determined by the Committee at the time of
grant. The Committee shall have the power to permit, in its discretion, an
acceleration of the expiration of the applicable restriction period with respect
to any part or all of the RSAs awarded to a grantee.

                                     Page 7
<PAGE>

      c. Restrictions Upon Transfer. RSAs awarded, and the right to vote
underlying Shares and to receive dividends thereon, may not be sold, assigned,
transferred, exchanged, pledged, hypothecated, or otherwise encumbered during
the restriction period applicable to such Shares, except: (i) by will or the
laws of descent and distribution; (ii) by gifting for the benefit of descendants
for estate planning purposes; or (iii) pursuant to a certified domestic
relations order. Subject to the foregoing, and except as otherwise provided in
the Plan, the grantee shall have all the other rights of a stockholder
including, but not limited to, the right to receive dividends and the right to
vote such Shares.

      d. Certificates. Each certificate issued in respect of RSAs awarded to a
grantee shall be deposited with the Company, or its designee, and shall bear the
following legend:

      "This certificate and the shares represented hereby are subject to the
      terms and conditions (including forfeiture and restrictions against
      transfer) contained in the Performance Health Technologies, Inc. 1999
      Stock Incentive Plan and an Agreement entered into by the registered
      owner. Release from such terms and conditions shall be obtained only in
      accordance with the provisions of the Plan and Agreement, a copy of each
      of which is on file in the office of the Secretary of said Company."

      e. Lapse of Restrictions. The Agreement shall specify the terms and
conditions upon which any restrictions upon Shares awarded under the Plan shall
lapse, as determined by the Committee. Upon the lapse of such restrictions,
Shares, free of the foregoing restrictive legend, shall be issued to the grantee
or his or her legal representative.

      f. Termination Prior to Lapse of Restrictions. In the event of a grantee's
termination of employment prior to the lapse of restrictions applicable to any
RSAs awarded to such grantee, all Shares as to which there still remain
restrictions shall be forfeited by such grantee without payment of any
consideration to the grantee, and neither the grantee nor any successors, heirs,
assigns, or personal representatives of such grantee shall thereafter have any
further rights or interest in such Shares or certificates.

      7. STOCK APPRECIATION RIGHTS

      a. Grants. Stock Appreciation Rights ("SARs") may be granted separately or
in tandem with or by reference to an option granted prior to or simultaneously
with the grant of such rights, to such eligible directors and employees as may
be selected by the Committee.

      b. Terms of Grant. SARs may be granted in tandem with or with reference to
a related option, in which event the grantee may elect to exercise either the
option or the SAR, but not both, as to the same Share subject to the option and
the SAR, or the SAR may be granted independently of a related option. In either
event, the SAR shall be exercisable not more than ten (10) years after the date
of grant. SARs shall not be transferable, except that SARs may be exercised by
the executor, administrator or personal representative of the deceased grantee
within twelve (12) months of the death of the grantee and SARs may be exercised
during the individual's continued employment with the Company and for a period
not in excess of ninety (90) days following termination of employment due to
Disability, Normal Retirement or Early Retirement, to the extent that the SAR
was or became exercisable at the date of such termination.

                                     Page 8
<PAGE>

      c. Payment on Exercise. Upon exercise of a SAR, the grantee shall be paid
the excess of the then fair market value of the number of Shares to which the
SAR relates over the fair market value of such number of Shares at the date of
grant of the SAR or of the related option, as the case may be. Such excess shall
be paid in cash or in Shares having a fair market value equal to such excess or
in such combination thereof as the Committee shall determine.

      8. RIGHT OF FIRST REFUSAL

If any Shares issued under the Plan are not readily tradable on an established
market on the date an owner intends to sell such Shares, such owner shall first
offer such Shares to the Company for purchase and the Company shall have thirty
(30) days to exercise its right to purchase such Shares. The owner shall give
written notice to the Company stating that he or she has a bona fide offer for
the purchase of such Shares, stating the number of Shares to be sold, the name
and address of the person(s) offering to purchase the Shares and the purchase
price and terms of payment of such sale. The owner shall be entitled to receive
the same purchase price offered by such person(s) offering to purchase such
Shares. Payment may be in a lump sum or, if the lump sum exceeds $100,000, in
substantially equal annual or more frequent installments over a period not
exceeding five (5) years in the discretion of the Committee. If a method of
deferred payments is selected, the unpaid balance shall earn interest at a rate
that is substantially equal to the rate at which the Company could borrow the
amount due and shall be secured by a pledge of the Shares purchased or such
other adequate security as agreed to by the Company and the owner. For purposes
of this Paragraph, Shares shall be considered not readily tradable on an
established market if such Shares are not publicly tradable or because such
Shares are subject to a trading limitation under any federal or state securities
law or regulation that would make such Shares less freely tradable than stock
not so restricted. For purposes of this Paragraph, an owner shall include any
person who acquires Shares from any other person and for any reason; including,
but not limited to, by gift, death or sale.

      9. AMENDMENT OR TERMINATION OF THE PLAN

The Board may amend, suspend or terminate the Plan or any portion thereof at any
time, but (except as provided in Paragraph 13 hereof) no amendment shall be made
without approval of the stockholders of the Company which shall: (i) materially
increase the aggregate number of Shares with respect to which awards may be made
under the Plan; or (ii) change the class of persons eligible to participate in
the Plan; provided, however, that no such amendment, suspension or termination
shall impair the rights of any individual, without his or her consent, in any
award theretofore made pursuant to the Plan.

      10. TERM OF PLAN

The Plan shall be effective upon the date of its original adoption by the Board
of Directors of the Company; provided that, Incentive Options may be granted
only if the Plan is approved by the shareholders within twelve (12) months
before or after the date of adoption. Unless sooner terminated under the
provisions of Paragraph 9, Shares and SARs shall not be granted under the Plan
after the expiration of ten (10) years from the effective date of the Plan.
However, awards may be exercisable after the end of the term of the Plan.

                                     Page 9
<PAGE>

      11. RIGHTS AS SHAREHOLDER

Upon delivery of any Share to a director or employee, such director or employee
shall have all of the rights of a shareholder of the Company with respect to
such Share, including the right to vote such Share and to receive all dividends
or other distributions paid with respect to such Share.

      12. MERGER OR CONSOLIDATION

In the event the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, the surviving corporation may
agree to exchange options and SARs issued under this Plan for options and SARs
(with the same aggregate option price) to acquire and participate in that number
of shares in the surviving corporation that have a fair market value equal to
the fair market value (determined on the date of such merger or consolidation)
of Shares that the grantee is entitled to acquire and participate in under this
Plan on the date of such merger or consolidation. In the event of a Change of
Control, options and SARs may become immediately and fully exercisable at the
discretion of the Committee.

      13. CHANGES IN CAPITAL AND CORPORATE STRUCTURE

The aggregate number of Shares and interests awarded and which may be awarded
under the Plan shall be adjusted to reflect a change in the outstanding Shares
of the Company by reason of a recapitalization, reclassification,
reorganization, stock split, reverse stock split, combination of shares, stock
dividend or similar transaction. The adjustment shall be made in an equitable
manner which will cause the awards to remain unchanged as a result of the
applicable transaction.

      14. SERVICE

An individual shall be considered to be in the service of the Company or a
Related Corporation as long as he or she remains a director, employee,
consultant or advisor of the Company or such Related Corporation. Nothing herein
shall confer on any individual the right to continued service with the Company
or a Related Corporation or affect the right of the Company or such Related
Corporation to terminate such service.

      15. WITHHOLDING OF TAX

To the extent the award, issuance or exercise of Shares or SARs results in the
receipt of compensation by a director, employee, consultant or advisor of the
Company is authorized to withhold from any other cash compensation then or
thereafter payable to such director, employee, consultant or advisor any tax
required to be withheld by reason of the receipt of the compensation.
Alternatively, the director, employee, consultant or advisor may tender a
personal check in the amount of tax required to be withheld.

                                    Page 10
<PAGE>

      16. DELIVERY AND REGISTRATION OF STOCK

The Company's obligation to deliver Shares with respect to an award shall, if
the Committee so requests, be conditioned upon the receipt of a representation
as to the investment intention of the individual to whom such Shares are to be
delivered, in such form as the Committee shall determine to be necessary or
advisable to comply with the provisions of the `33 Act or any other federal,
state or local securities legislation or regulation. It may be provided that any
representation requirement shall become inoperative upon a registration of the
Shares or other action eliminating the necessity of such representation under
securities legislation. The Company shall not be required to deliver any Shares
under the Plan prior to (i) the admission of such Shares to listing on any stock
exchange on which Shares may then be listed, and (ii) the completion of such
registration or other qualification of such Shares under any state or federal
law, rule or regulation, as the Committee shall determine to be necessary or
advisable

                                    Page 11

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