License Agreement

Ferring Pharmaceuticals, Inc., a Delaware corporation (“ Ferring ”), Vyteris, Inc., a Delaware corporation (“ Vyteris ”), and Vyteris, Inc., a Nevada corporation (“ Parent ”) hereby agree as follows:

1.       License Agreement .   Reference is hereby made to the License and Development Agreement dated as of September 27, 2004, as amended, between Ferring and Vyteris (the “ License Agreement ”).

(a)           Attached hereto as Schedule 1 is a draft of the calendar year 2009 “patch development budget” provided by Vyteris to Ferring pursuant to Section 2.04 of the License Agreement (the “ 2009 Patch Development Budget ”).  Promptly following the execution and delivery of this letter agreement, Vyteris and Ferring shall agree upon a final 2009 Patch Development Budget.  The existing 50/50 sharing arrangement with respect to annual development costs incurred to carry out the Development Plan described in the License Agreement shall remain in place.  However, solely with respect to up to $6,600,000 of the 2009 Patch Development Budget, Ferring agrees that, subject to adequate confirmation and approval by Ferring, in its sole reasonable discretion, regarding the use of such funds consistent with the Development Plan, Ferring shall pay half of such budgeted amount ($3,300,000) in full first.  With respect to each such payment made by Ferring with respect to calendar year 2009 (including, without limitation, prior to the execution of this letter agreement) in excess of the amounts due in accordance with the original 50/50 sharing arrangement (the “ Excess Amounts ”), Ferring shall be deemed to have paid such Excess Amounts on account of and on behalf of Vyteris’s obligation under the existing 50/50 sharing arrangement; and such Excess Amounts shall be deemed loans by Ferring to Vyteris (which loans Vyteris shall repay to Ferring (i) by making payment, on account of and for the benefit of Ferring, of Ferring’s 50/50 sharing obligation with respect to the second half of such $6,600,000 ($3,300,000) of such Development Costs, but in any event, no later than December 31, 2009, or (ii) if earlier, upon the termination of the License Agreement or the breach by Vyteris or Parent of the License Agreement, the Supply Agreement (as defined below), the Technical Agreement (as defined below), or any of the Transaction Documents (as defined below).  In connection therewith, Vyteris shall invoice Ferring on a semi-monthly basis based on actual costs incurred during the prior semi-monthly period.  All such payments shall continue to be subject to year-end reconciliation and the other provisions set forth in Section 2.04 of the License Agreement.  With respect to any amounts in the final 2009 Development Patch Development Budget in excess of $6,600,000, such amounts shall be paid after Ferring and Vyteris pay the amounts set forth in this paragraph (and the original 50/50 sharing arrangement shall apply with respect thereto).

(b)           Section 5.05(b) of the License Agreement is hereby amended and restated to read in its entirety as follows:

“In each subsequent twelve month period, the revenue share percentage that shall be paid by Ferring to Vyteris shall be as follows:

2.            Supply Agreement .  Reference is hereby made to the Supply Agreement dated September 27, 2004, as amended, between Ferring and Vyteris the (“ Supply Agreement ”) and the Technical Agreement entered into by and between Ferring and Vyteris in connection with (the “ Technical Agreement ”).

(a)           The following is hereby added as a new Section 8.5 of the Supply Agreement:

“At Ferring's expense, Vyteris hereby agrees that it shall permit a Ferring manufacturing/production employee or representative to be onsite at Vyteris’s Fair Lawn, New Jersey facility during calendar year 2009, at such times as are reasonably requested by Ferring, for observation and review purposes solely with respect to activities related to Ferring.  With respect to such observation and review, the provisions of Article 6 of this Agreement (Confidentiality) shall apply.  During calendar years 2009 and 2010, Ferring agrees that it shall not directly solicit for employment any employee of Vyteris whom Ferring is first introduced to directly as a result of the exercise by Ferring of such observation and review rights.”

(b)           Except as set forth above, the Supply Agreement and the Technical Agreement shall remain in full force and effect.

(a)           Attached hereto as Schedule 2 is a description of machinery commonly referred to as PMK150 and used by Vyteris in connection with its performance of its obligations pursuant to the License Agreement and Supply Agreement (together with all replacement and spare parts and accessories, the “ PMK150 ”).  Vyteris hereby represents and warrants to Ferring that there are no manufacturer or other warranties in favor of Vyteris and/or its affiliates relating to the PMK150.

* confidential treatment requested.

(b)           Vyteris and Parent hereby, jointly and severally,  represent and warrant to Ferring that (i) Vyteris owns all good and marketable right, title and interest in and to the PMK150, free and clear of any and all liens, security interests, pledges, attachments, mortgages, charges, claims, conditions or other similar encumbrances or restrictions of any kind, including, without limitation, any conditional sale agreement or other title retention agreement (collectively, “ Liens ”), except for the Lien in favor of Spencer Trask Specialty Group (“ Spencer Trask ”); and upon execution and delivery of the Bill of Sale (as defined below), Ferring shall acquire all absolute unconditional right, title and interest in and to the Purchased Assets (as defined below), free and clear of all Liens (i.e., Spencer Trask shall release its Lien); (ii) the PMK150 conforms to the specifications set forth on Schedule 2 hereto and is in good working order and operating condition, free of any material defects (latent and otherwise); (iii) the PMK150 complies in all material respects with all applicable requirements of all applicable and relevant occupational safety and health laws and the regulations promulgated thereunder; and (iv) the PMK150 is located at the facilities of Vyteris located at 13-01 Pollit Drive, Fair Lawn, New Jersey.

(c)           Vyteris and Parent hereby, jointly and severally, represent and warrant to Ferring that (i) Vyteris is a wholly-owned subsidiary of Parent, that Parent is a holding-company without operations other than as relate to its ownership of Vyteris, and that Parent’s only asset is its capital stock of Vyteris; and (ii) except as set forth on Schedule 3 , there is no actual or threatened claim, lawsuit, action or proceeding against or involving Vyteris or Parent.

(d)           Simultaneously with the execution and delivery of this letter agreement, Vyteris and Ferring shall enter into an Assignment and Bill of Sale in the form attached hereto as Exhibit A (the “ Bill of Sale ”) pursuant to which Vyteris shall sell and assign to Ferring, and Ferring shall purchase from Vyteris, the PMK150 and all related records, documentation and warranties (collectively, the “ Purchased Assets ”), free and clear of all Liens.  The Bill of Sale is hereby incorporated by reference into this Agreement as if fully set forth herein.

(i)            The purchase price to be paid by Ferring to Vyteris for the Purchased Assets is One Million Dollars ($1,000,000) (the “ Purchase Price ”) and shall be paid by Ferring to Vyteris as follows:

(a)           credit for the principal amounts owed by Vyteris to Ferring pursuant to (i) the Promissory Note dated July 8, 2008 made by Parent, as nominee and agent for Vyteris, to Ferring in the original principal amount of $50,000 (the " $50,000 Note ") (which principal amount equals $50,000), and (ii) the Promissory Note dated December 15, 2008 made by Parent, as nominee and agent for Vyteris, to Ferring in the original principal amount of $200,000 (the " $200,000 Note ") (which principal amount equals $200,000) are hereby credited in full against the Purchase Price;

(b)           Ferring shall make a payment to Vyteris in the amount of $250,000 on the date hereof; and

(c)           On April 30, 2009, Ferring shall make a payment to Vyteris in the amount of (i) $500,000, less credit for (ii) interest payments owed by Vyteris to Ferring pursuant to the (A) the $50,000 Note; (B) the $200,000 Note; and (C) the Promissory Note dated July 8, 2008 made by Parent, as nominee and agent for Vyteris, to Ferring in the original principal amount of $2,500,000 (the “ $2,500,000 Note ”).

(ii)           The parties hereby acknowledge and agree that the loans made by Ferring and represented by the $50,000 Note, the $200,000 Note and the $2,500,000 Note were each made by Ferring to Parent, as nominee and agent for Vyteris.  The parties hereby acknowledge and agree that the Purchase Price constitutes the Fair Market Value of the Purchased Assets.  As used in this letter agreement, the “Fair Market Value” means the price determined by the parties to be the price which a willing buyer would pay for assets in an arm’s length transaction to a willing seller who is under no compulsion to sell such assets.

(iii)          The Parties hereby acknowledge and agree that, in accordance with Section 4 of the $2,500,000 Note, Ferring has elected to offset the principal amount due by Ferring thereunder against the $2,500,000 payment due by Ferring pursuant to Section 5.02(ii) of the License Agreement.

(e)           Simultaneously with the execution and delivery of this letter agreement, Vyteris and Ferring shall enter into an Equipment Lease Agreement in the form attached hereto as Exhibit B (the “ Equipment Lease ”) pursuant to which Ferring shall lease to Vyteris the Purchased Assets.   As set forth in the Equipment Lease, in lieu of Vyteris paying the lease payments to Ferring in cash, at Ferring’s option Ferring shall receive a dollar-for-dollar credit against, at Ferring’s option, (i) the option exercise price described below with respect to the PMK300, and/or (ii) amounts due by Ferring to Vyteris pursuant to the License Agreement ( e.g. , milestone payments), the Supply Agreement and/or any other agreement between the parties.  The Equipment Lease is hereby incorporated by reference into this Agreement as if fully set forth herein.  General terms shall include, without limitation, lease payments of $1000 per month, a term of 10 years and covenants by Vyteris to maintain the Equipment in proper working order.  Without otherwise limiting the provisions of the Section 6(b) of the Equipment Lease, the insurance referred to in Section 6(b) of the Equipment Lease shall include the insurance set forth on Schedule 3(a) attached hereto.

4.              PMK300 .

(a)           Attached hereto as Schedule 4 is a description of a piece of machinery commonly referred to as PMK300 (together with all replacement and spare parts and accessories, the “ PMK300 ”).  There are no manufacturer and other warranties in favor of Vyteris and/or Parent relating to the PMK300.

(b)           Vyteris and Parent hereby, jointly and severally, represent and warrant to Ferring that (i) Vyteris owns all good and marketable right, title and interest in and to the PMK300, free and clear of any and all Liens; and upon consummation by Ferring of the transactions contemplated by the Option (as defined below), Ferring shall acquire all absolute unconditional right, title and interest in and to the PMK300 Assets (as defined below), free and clear of all Liens; (ii) the PMK300 conforms to the specifications: set forth on Schedule 4 hereto and is in good working order and operating condition, free of any material defects (latent and otherwise); (iii) the PMK300 complies in all material respects with all applicable requirements of all applicable and relevant occupational safety and health laws and the regulations promulgated thereunder; and (iv) the PMK300 is located at the facilities of Herro Hoeflinger Harro Höfliger Verpackungsmaschinen GmbH, Werk Satteldorf, Industriestraße 6, 74589 Satteldorf, GERMANY.

(c)           Vyteris hereby grants to Ferring the right to purchase the PMK300 and all related records, documentation and warranties (collectively, the “ PMK300 Assets ”), free and clear of all Liens (the “ Option ”).   In order to exercise the Option, Ferring shall notify Vyteris in writing, prior to the expiration of the Option Period (as defined below), that Ferring desires to exercise the Option, in which case the parties shall promptly negotiate and enter into a purchase agreement and other related documents (including, without limitation, transfer documents and a legal opinion in favor of Ferring) in connection therewith.  As used herein, the “ Option Period ” means the period of time beginning on the