LICENSE AGREEMENT

LICENSE AGREEMENT

        This License Agreement (this "Agreement") is entered into and made effective as of December 1, 2006, by George Andrew Eby III, ("EBY") and Auriga Laboratories, Inc., a Delaware corporation ("AURIGA") with respect to the facts set forth below.

RECITALS

        A.        EBY has developed certain products and technology relating to the treatment of the common cold with zinc and has obtained certain patents relating to the treatment of the common cold with zinc.

        B.        AURIGA is engaged in research and development of, among other things, pharmaceutical products intended for the treatment of the common cold and pharmaceutical products containing zinc acetate.

        C.        EBY desires to grant to AURIGA, and AURIGA wishes to acquire, a worldwide right and license to EBY’s products, technology and patents.

AGREEMENT

        NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, EBY and AURIGA hereby agree as follows:

    1.     Definitions .  Capitalized terms shall have the meaning set forth below.

            1.1    " Affiliate "shall mean any entity which directly or indirectly controls, is controlled by or is under common control with AURIGA. The term " control " as used herein means the possession of the power to direct or cause the direction of the management and the policies of an entity, whether through the ownership of a majority of the outstanding voting securities or by contract or otherwise.

            1.2    " Combination Product " shall mean a product containing a Licensed Product together with one or more other active ingredients, devices, products, equipment or components that are themselves not Licensed Products.

            1.3    " Commercial Launch " shall mean the initial commercial sale of a Licensed Product by AURIGA or a third party authorized to sell products on behalf of AURIGA.

            1.4    " Confidential Information " shall mean any and all proprietary or confidential information of EBY or AURIGA which may be exchanged between the parties at any time and from time to time during the term of this Agreement. Information shall not be considered confidential to the extent that it:

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            1.5    " Developed Technology " shall mean intellectual property and technical know-how, including all rights in discoveries, knowledge, experience, improvements, processes, products, reports, models, codes, inventions, works of authorship, trade secrets, pending patent applications, patents, copyrights, or other proprietary information (whether or not patentable, copyrightable or the subject of any other type of intellectual property protection) that is discovered or developed by AURIGA, including, without limitation, any of the foregoing that is based or incorporates any EBY Technology.

            1.6    " Existing Licenses " shall mean the non-exclusive license agreements EBY has entered into with F&F Foods and Weider Nutrition, respectively.

            1.7    " Licensed Product " shall mean any product which cannot be developed, manufactured, used or sold without (i) infringing one or more claims under EBY Technology or (ii) utilizing any part of EBY Technology.

            1.8    " EBY Technology " shall mean all intellectual property and technical know-how, including all rights in discoveries, knowledge, experience, improvements, processes, products, reports, models, codes, inventions, works of authorship, trade secrets, pending patent applications, patents, including without limitation, the following patents: U.S. Patent 5,409,905 (as revised by Re-Examination SN90/004,518); 5,095,035; 5,002,970; and 4,956,385; and Canadian Patent 2,099,670, copyrights, or other proprietary information (whether or not patentable, copyrightable or the subject of any other type of intellectual property protection) that is owned by EBY concerning zinc and the common cold. In addition, "Ideas and Inventions" developed under that certain Consulting Agreement, by and between Eby and Auriga, dated as of the date hereof (the "Consulting Agreement"), as that term is defined in the Consulting Agreement, shall be included within "Eby Technology."

            1.9    " Manufacturing Instructions " shall mean the technology, trade secrets, know-how and other proprietary information and other information used for the manufacture, packaging, release testing, validation, stability and shelf life of Licensed Products that are in existence and in the possession of, under the control of, or accessible to, the EBY as of the date of this Agreement, including, without limitation, all (i) current manufacturing processes, (ii) current test methods, (iii) current specifications for raw materials, (iii) current manufacturing and packaging instructions, (iv) the most recently available chemical, pharmacological, toxicological, safety, quality control and clinical data, (iv) current master formulae, (v) validation reports, (vi) stability data, (vii) analytical methods, (viii) records of complaints from the twenty-four (24) month period ending as of the date of this Agreement, (ix) annual product reviews from the prior twenty four (24) months, and (x) other master documents necessary for the manufacture, control and release of Licensed Products as conducted by, or on behalf of, EBY.

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            1.10    " Net Sales " shall mean the gross amount invoiced by AURIGA, or its Affiliates and Sub-licensees, or any of them, on all sales of Licensed Products less (i) actual returns and actual credits taken, (ii) freight, postage, and shipping expenses (including insurance relating thereto) absorbed by Auriga; and (iii) sales and other excise taxes, tariffs, customs duties or other duty and any other governmental charges. For purposes of determining Net Sales, a sale shall be deemed to have occurred when an invoice therefore shall be generated or the Licensed Product shipped for delivery. Only sales of Licensed Products by AURIGA, or an Affiliate or Sub-licensee of AURIGA to unrelated parties shall be deemed Net Sales hereunder. If the Licensed Product is sold in the form of a Combination Product, then for the purpose of calculating royalties owed under this Agreement on sales of the Combination Product, Net Sales shall mean an amount equal to the actual net sales of such Combination Product (calculated using the method described above) multiplied by the fraction A/(A+B), where A is the weighted (by sales volume) average invoice price of the actual Licensed Product component of such Combination Product, and B is the total of the weighted (by sales volume) average invoice prices of the other products, active ingredients, devices, equipment or components of such Combination Product.

            1.11    " Product Marketing Materials " shall mean all marketing materials used solely and specifically with respect to Licensed Products that are in existence as of the date of this Agreement, to the extent such materials are within the possession of EBY and are legally permitted to be assigned, including all advertising and display materials, product data, price lists, sales materials, marketing information, marketing plans, sales, training and education materials, promotional materials, scientific and commercial publications, market research, artwork for the production of packaging components and other materials associated solely and specifically with Licensed Products that EBY has the right to transfer.

            1.12    " Regulatory Documentation " shall mean copies of any and all dossiers and packages, labels and regulatory certificates, any correspondence with the U.S. Food and Drug Administration, or any other regulatory bodies, drug reports, periodic safety update reports, medical inquiries and standard communication letters relating to Licensed Products.

            1.13    " Sourcing Documentation " shall mean all copies of any documentation and information under the possession of, or reasonably accessible to, EBY relating to sourcing of raw materials and necessary to manufacture Licensed Products.

            1.14    " Technical Information " shall mean all technical, scientific, chemical, biological, pharmacological, and toxicological data generated specifically for Licensed Products, other than the Manufacturing Information, that are in existence as of the date of this Agreement, to the extent such materials are within the possession or control of, or accessible to, EBY.

    2.     License Terms and Conditions .

            2.1     Grant of License .

                      2.1.1    Subject to the Existing Licenses, EBY hereby grants to AURIGA an exclusive, worldwide license, including the right to sublicense, to the EBY Technology, to make, to have made, to use, and to sell Licensed Products, subject to the terms of this Agreement. In addition, the license granted to Auriga pursuant to this Section 2.1.1 shall be exclusive even as to Eby, but such exclusivity even as to Eby shall continue only while that certain Consulting Agreement (as defined in Section 1.8 hereof) remains in effect.

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                      2.1.2    Upon execution of this Agreement, EBY shall provide to AURIGA, without charge (other than the royalties payable pursuant to Section 2.4 below), copies of any and all Manufacturing Instructions, Product Marketing Materials, Regulatory Documentation, Sourcing Documentation and Technical Information and all embodiments, including, without limitation, documents, writings and other media, of EBY Technology.

                      2.1.3    EBY shall promptly disclose to AURIGA in writing, without charge (other than the royalties payable pursuant to Section 2.4 below), any improvements upon EBY Technology made during the term of this Agreement, and shall deliver to AURIGA any and all embodiments, including, without limitation, documents, writings and other media, of such improvements.

            2.2     Ownership .    The patent applications filed and the patents obtained by AURIGA pursuant to Section 4.1 hereof, all Combination Products and all Developed Technology shall be owned solely by AURIGA.

            2.3     Sublicense .     AURIGA shall have the right to grant sublicenses to any party with respect to the rights conferred upon AURIGA under this Agreement upon notification to EBY of the identity of said sublicenses.

            2.4