ex10-142.htm


    
      

    

    
      
        	 EXCUTION
      COPY	 	
                EXHIBIT
      10.142

              


      

       

    

    Ferring
Pharmaceuticals, Inc.

    4
Gatehall Drive, 3rd
Floor

    Parsippany,
NJ  07054

    


     

    July 8,
2008

     

    


    Vyteris,
Inc.

    13-01
Pollit Drive

    Fair
Lawn, NJ   07410

    


    Ladies
and Gentlemen:

    


    Reference
is made to (i) the License and Development Agreement dated as of September 27,
2004 (as heretofore amended, the “License Agreement”)
between Ferring Pharmaceuticals, Inc. (“Ferring”) and
Vyteris, Inc. (“Vyteris”), and (ii)
the Supply Agreement dated September 27, 2004 (the “Supply Agreement”)
between Ferring and Vyteris.

     

    On the
date hereof, at the request of Vyteris, Ferring is making a loan to Vyteris in
the principal amount of $2,500,000.00 (the “Loan”) evidenced by a
Secured Note dated the date hereof and secured by a security interest in certain
collateral (the “Collateral”) granted
by Vyteris to Ferring under the Security Agreement dated as of the date hereof
(the “Security
Agreement”) between Vyteris and Ferring.  As additional
consideration for, and in order to induce Ferring to make, the Loan, Vyteris and
Ferring hereby agree as follows:

    
    

     

        1.    Vyteris hereby
agrees that the proceeds of the Loan shall be used only to pay for Vyteris’
payment obligations under the License Agreement and the Supply Agreement and for
other essential corporate operating expenses, including, but not limited to, any
expenses attributable to Vyteris incur with shipment (and related matters) of
the Equipment to Borrower’s Facility subject to paragraph 8 hereof.

     

    
    

        2.    Section
2.01(a) of the License Agreement is hereby amended to (a) insert the words
“irrevocable (subject only to Ferring’s fulfillment of its obligations under the
License Agreement)” immediately before the word “exclusive” in the first line
thereof and (b) insert the words “have manufactured,” immediately after the word
“manufacture” in the second and fourth lines thereof.

    
    

     

        3.    Section 2.02
of the License Agreement is hereby amended to insert the following as new
paragraphs at the end thereof:

     

    “The
parties acknowledge that Ferring is now entitled to the benefits of the
immediately preceding paragraphs of this Section 2.02 as if the conditions set
forth therein have been satisfied as of the date hereof and Vyteris shall use
its reasonable best efforts to effectuate the foregoing provisions of this
Section 2.02 and cooperate with Ferring in all reasonable respects related
thereto solely by the prompt transmittal to Ferring of copies of all
manufacturing Know How existing as of the date hereof.  Vyteris makes
no representations to Ferring with regard to such documentation, and Vyteris has
no further obligations to Ferring regarding the manufacturing
Know-How”.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Notwithstanding
anything to the contrary contained herein, Vyteris hereby grants Ferring the
irrevocable right, at Ferring’s election which may be exercised at any time, to
make or have made the Product (by Ferring itself, its sublicensee(s) and/or by a
third party selected by Ferring) to provide supplies of the Product for Phase
III trials and/or for commercial supply of the Product for marketing and sale by
Ferring and/or its affiliates and sublicensees hereunder.  This right
shall survive termination of this Agreement and continue thereafter so long as
Ferring has the license to market and sell the Product hereunder.”

    
    

     

        4.    Section 9.07
of the License Agreement is hereby amended to change the words “shall grant”
appearing in clause (c) thereof to “hereby grants” and by adding after the word
“irrevocable” the following “(subject to performance by Ferring of its
obligations hereunder including any payment obligations)”..

    
    

     

    
    

        5.    The License
Agreement is hereby amended to insert the following new Section 21 at the end
thereof:

     

    
    

    
      
        “21.    ACKNOWLEDGEMENT

         

      

    

    
    

    
      
        21.01    The
parties hereto acknowledge that this Agreement is a license of intellectual
property within the meaning of 11 U.S.C. §365(n).”

         

      

    

    
    

        6.    Article 5 of
the Supply Agreement is hereby amended to add the following as a new paragraph
at the end thereof:

     

    “Notwithstanding
the foregoing, Vyteris hereby grants Ferring the  right, which may be
exercised at any time, to establish an additional source or sources to
manufacture and supply or to have manufactured and supplied the Product to
Ferring (such  manufacturing to be performed by Ferring itself, its
sublicensee(s) and/or by a third party selected by Ferring).  This
right is granted solely with respect to manufacture of the Product and is
limited in all respects by the applicable provisions of the License
Agreement.  This right shall survive termination of this Agreement and
continue thereafter so long as Ferring has the license to market and sell the
Product under the License and Development Agreement.”

    
    

     

    
    

        7.    Vyteris
hereby agrees to furnish to Ferring no later than July 1, 2008, copies of all
Form FDA 483 Inspectional Observations (“FDA 483s”) existing
as of such date and related to Vyteris’ manufacturing activities which
could reasonably affect the Product and any like FDA 483s until the Loan is
repaid in full.. and until the Loan is repaid in full, to furnish to Ferring,
promptly upon receipt, copies of all FDA 483s relating to the Product after the
date hereof.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
          8.    Until the Loan
is repaid in full, Vyteris may not make any payments to any related party
shareholders or entities controlled by related party shareholders (“related
party shareholder” is defined as those shareholders listed on the “SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” table in Vyteris’
Schedule 14A filed with the SEC on April 25, 2008), except for salaries,
bonuses, benefits, etc. and consulting fees payable to officers as set forth on
Exhibit A hereto (subject to customary increases for inflation and the like)and
Russell Potts and Arthur Courbanou (directors) at ongoing rates and otherwise,
as such compensation packages may be amended upon terms no more favorable to
such officers and director than under past practice approved by Vyteris’
compensation committee.  Notwithstanding anything to the contrary in
the foregoing, this paragraph 8 shall not prohibit payment by Vyteris to its
directors under the 2007 Outside Directors Compensation Plan, as may be amended
from time to time.

    

     

        9.    So long as any
amounts are outstanding under the Note, Ferring shall receive notice of all
meetings  of the Board of Directors of Vyteris, and subject to having
designated an observer (which may be only one person and not subject to change
unless the designated person is no longer employed or retained by Ferring), who
has signed Vyteris’ standard nondisclosure agreement , such observer may attend
Vyteris’ meetings of its Board of Directors ; provided, however, that such
observer shall not have a right to vote or otherwise pass on any matters brought
to the attention of the Board at such meetings, and such observer shall be
excluded from any discussions regarding any matters related to
Ferring.  The observer also covenants that he will not share any
material discussed at any Board meeting with any third party or related party
including Ferring and its affilaites.

     

        10.    This letter agreement
shall be governed by and construed in accordance with the laws of the State of
New York without giving effect to conflicts of law principles.

    
      
      


     

        11.    This letter agreement
may be executed in counterparts and delivered by facsimile, each of which shall
be deemed an original, but all of which together shall constitute one and the same
instrument.  Vyteris and Ferring hereby submit to the exclusive
jurisdiction of the state and federal courts located in the City of Newark,
State of New Jersey for the sole purpose of this letter agreement and any
controversy arising hereunder. VYTERIS AND

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    FERRING
EACH WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
FROM THIS LETTER AGREEMENT.

     

    Please
confirm your agreement to the foregoing by executing the enclosed duplicate
original of this letter in the space provided below and returning it to
Ferring.

     

    
      
        	 	FERRING
      PHARMACEUTICALS, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/
      Wayne C. Anderson	 
	 	 	Name:
      Wayne C. Anderson	 
	 	 	Title:
      President and CEO	 
	 	 	 	 


      

    

     

    ACCEPTED
AND

    AGREED
TO:

    


    


    VYTERIS,
INC.

    


    


    By:   _/s/
Donald Farley

    Name:
Donald Farley

    Title:
Chairman

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    


    OFFICER
COMPENSATION

    


    
      	
              Name

            	 	
              Annual

               Salary

            	 	 	
              Contract

               Term

            	 	 	
              Options
      

              50%
      Grant

               &
      50% 

              Performance

              Vest
      

              Annually

               over
      2 years

            	 	 	
              Cash
      

              Bonus

               Performance

               Based
      

              as
      % of 

              Base
      

              Salary

            	 	
              Severance
      

              Base

               Pay
      & 

              Benefits

            	
              Severance

              Options
      

              Extend

               Vesting

            	
               

               

               

               

               

               

              Other

               

            
	
              Espinal,
      Rafael

            	 	$	240,000	 	 	 	N/A	 	 	 	400,000	 	 	 	20	%	 
      	 
      	
              $800
      Car

               Allowance
      &

              $3,500
      rent

               per
      month

               12/31/2008

            
	
              Lyons,
      Cormac

            	 	$	173,250	 	 	
              2
      year

            	 	 	 	400,000	 	 	 	20	%	
              6
      months

            	
              2
      years

            	 
      
	
              Reidy,
      Mike

            	 	$	172,575	 	 	
              2
      year

            	 	 	 	400,000	 	 	 	20	%	
              6
      months

            	
              2
      years

            	 
      
	
              Himy,
      Joseph

            	 	$	192,000	 	 	
              2
      year

            	 	 	 	1,000,000	 	 	 	25	%	
              6
      months

            	
              2
      years

            	 
      
	
              Hartounian,
      Haro

            	 	$	325,000	 	 	
              2
      year

            	 	 	 	2,500,000	 	 	 	40	%	
              6
      months

            	
              2
      years

            	
              $10K
      a 

              month
      living

               Expense
      

              through
      June 

              2009

            
	
              Farley,
      Don

            	 	
              $30,000
      

              remaining

               at
      

              $2,000in
      

              cash
      per

               week;
      if 

              extension,

               would
      be 

              at
      $2,000 

              in
      cash 

              per
      week

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 
      	 	
              $500
      in stock for 20 weeks;

               

               

               

               

               

               

               

               

            


    

    


    


    


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