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                                                         [PRIVATE EQUITY FUND I]

                            11.5% SENIOR SECURED NOTE

$75,000 U.S.
New York, New York                                                  June 2, 2005

1.      DEFINITIONS. For purposes of this Note:

        A.      BORROWER. The "Borrower" means Vyteris Holdings (Nevada), Inc.,
a Nevada corporation having its chief executive office at 13-01 Pollitt Drive,
Fair Lawn, New Jersey 07410.

        B.      COLLATERAL. "Collateral" means any collateral, subordination,
guaranty, endorsement or other security or assurance of payment, whether now
existing or hereafter arising or accruing, that now or hereafter secures the
payment of or is otherwise applicable to the Outstanding Principal Account or
any interest or other amount payable pursuant to this Note and remaining unpaid.

        C.      EVENT OF DEFAULT. "Event of Default" has the meaning set forth
in SECTION 6 hereof.

        D.      INTEREST. "Interest" has the meaning set forth in SECTION 3
hereof.

        E.      LENDER. The "Lender" means Spencer Trask Private Equity Fund I,
LP, a Delaware limited partnership, having its chief executive office at 535
Madison Avenue, New York, New York 10022.

        F.      MATURITY DATE. The "Maturity Date" shall be August 1, 2005.

        G.      NOTES. This Note is part of a series of 11.5% Senior Secured
Promissory Notes of like tenor issued on the date hereof on identical terms, in
an aggregate principal amount equal to up to $2 million, and are collectively
referred to as the "Notes."

        H.      OUTSTANDING BALANCE. The "Outstanding Balance" means the sum of
the outstanding Principal Amount and any Interest accrued hereunder from time to
time.

        I.      PRINCIPAL AMOUNT. The "Principal Amount" means the outstanding
principal amount of this Note from time to time.

        J.      TRANSACTION DOCUMENTS. The "Transaction Documents" shall mean
this Note, and any other notes issued in connection with the Loan, and the
Security Agreement as defined in SECTION 7 hereof.

2.      PROMISE TO PAY. The principal amount plus all accrued and unpaid
interest owing under this Note shall be paid on the Maturity Date.

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3.      INTEREST. Interest, calculated on the basis of a 365-day year for the
actual calendar days elapsed (365 or 366, as applicable), on the Principal
Amount from and including the date of this Note to but not including the date
the Outstanding Balance is paid in full at a rate per year that shall on each
day be 11.5% (the "Interest").

        The Outstanding Balance as of the Maturity Date shall automatically
become due and payable on the Maturity Date.

4.      PAYMENTS WITHOUT PREMIUM OR PENALTY. The Borrower shall have the option
before the Maturity Date or upon the occurrence of an Event of Default of paying
the Outstanding Balance to the Lender in full or part at any time and from time
to time without any premium or penalty.

5.      AMOUNTS IMMEDIATELY DUE. The Outstanding Balance and other amounts
payable pursuant to this Note and remaining unpaid shall, without any notice,
demand, presentment or protest of any kind (each of which is knowingly,
voluntarily, intentionally and irrevocably waived by the Borrower),
automatically become immediately due upon the occurrence of any Event of
Default.

6.      EVENTS OF DEFAULT. If any one or more of the following events (each, an
"Event of Default") shall occur, that is to say:

        A.      The Borrower shall fail to make any payment in respect of
Interest (including additional interest) on or principal of this Note within
five (5) days of becoming due, whether at maturity or by acceleration or
otherwise; or

        B.      Any default or event of default shall occur with respect to any
other indebtedness of the Borrower exceeding $100,000 which results in any
payment with respect to such indebtedness for borrowed money becoming due prior
to its stated maturity; or

        C.      A final judgment which, in the aggregate with other outstanding
final judgments against the Borrower, exceeds $100,000 shall be rendered against
the Borrower and, if within 45 days after entry thereof, such judgment shall not
have been discharged or stayed pending appeal, or within 45 days after
expiration of such stay such judgment shall not have been discharged; or

        D.      The Borrower shall:

                (i)     commence a voluntary case under Title 11 of the United
States Code as from time to time in effect, or authorize, by appropriate
proceedings of its board of directors, the commencement of such a voluntary
case;

                (ii)    have filed against it a petition commencing an
involuntary case under said Title 11 which is not dismissed or vacated within 90
days after the date the same is filed;

                (iii)   seek relief as a debtor under any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors, or consent to or acquiesce in such relief;


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                (iv)    have entered against it any order by a court of
competent jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering
or approving its liquidation, reorganization or any modification or alteration
of the rights of its creditors, or (iii) assuming custody of, or appointing a
receiver or other custodian for, all or a substantial part of its property and,
in the case of clause (ii) or (iii), any such order shall not have been vacated
or rescinded within 90 days after the date such order was entered; or

                (v)     make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint or consent to the appointment of a
receiver or other custodian for all or a substantial part of its property; or

then, and in each and every case, the Lender may declare the Outstanding Balance
of this Note to be immediately due and payable, and thereupon the Outstanding
Balance shall become so due and payable without presentation, presentment,
protest or further demand or notice of any kind, all of which are hereby
expressly waived, and the Lender may proceed to enforce payment of such amount
in such manner as it may elect.

7.      SENIOR SECURED RIGHTS TO COLLATERAL. This Note shall be secured by that
certain Security Agreement (the "Security Agreement") by and among the Lender
and Vyteris, Inc., a wholly-owned subsidiary of the Borrower, dated of even date
herewith, as may be amended from time to time.

        The indebtedness evidenced by the Notes and the payment of the
Outstanding Balance of each of the Notes shall be Senior (as hereinafter
defined) to, and have priority in right of payment over, all indebtedness of
Borrower for borrowed money, outstanding as of the date hereof or hereinafter
incurred, other than purchase money equipment financing. "Senior" as used herein
shall be deemed to mean that, in the event of any default in the payment of the
obligations represented by the Notes (after giving effect to "cure" provisions,
if any) or of any liquidation, insolvency, bankruptcy, reorganization, or
similar proceedings relating to the Company, all sums payable on Notes shall
first be paid in full, with interest, if any, before any payment is made upon
any other indebtedness for borrowed money, other than purchase money equipment
financing, now outstanding or hereinafter incurred, and, in any such event, any
payment or distribution of any character which shall be made in respect of any
other indebtedness of the Company shall be paid over to the Lender of this Note
for application to the payment hereof, unless and until the obligations under
this Note (which shall mean the principal and other obligations arising out of,
premium, if any, interest on, and any costs and expenses payable under, this
Note) shall have been paid and satisfied in full.

8.      NO OTHER SENIOR INTERESTS. Except for (i) the rights of Becton,
Dickinson and Company ("Becton") to receive certain royalties in respect of
certain products developed using certain intellectual property rights
transferred by Becton pursuant to Section 8.05 of that certain Transaction
Agreement, by and between Becton, Spencer Trask Specialty Group, LLC, Spencer
Trask Ventures, Inc. and the Vyteris, Inc., dated November 10, 2000, (ii) the
rights of B. Braun Medical Inc. to certain distribution and license rights to
use the Borrower's Trademarks, Patents (each as defined in the Security
Agreement) and related intellectual property rights pertaining to the Borrower's
transdermal lidocaine delivery system pursuant to Section 2 of that certain
License, Development and Distribution Agreement, dated September 20, 2002, (iii)
purchase


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money liens against equipment, and (iv) the holders of the other Notes issued in
connection herewith, the Borrower owns each of the General Assets, Trademarks,
Patents and Licenses (each as defined in the Security Agreement) free and clear
of any and all liens, claims or security or adverse interests to all or any of
the Trademarks, Patents and Licenses free and clear of any and all liens, claims
or security or adverse interests to all or any of the Trademarks, Patents and
Licenses on file or of record in any public office, except as such as have been
filed in favor of the Lender pursuant to this Agreement.

9.      COVENANTS. Except with respect to the other Notes, the Borrower hereby
covenants and agrees, so long as any Outstanding Balance remains payable
pursuant to this Note:

        A.      It will not grant or attempt to grant any person or entity a
security interest in the Collateral or any portion thereof senior to, with
priority over, or PARI PASSU with the security interest granted to the Lender
pursuant to the Security Agreement.

        B.      It will not pledge or attempt to pledge the Collateral or any
portion thereof to any person or entity.

10.     GOVERNING LAW. This Note shall be governed by and construed, interpreted
and enforced in accordance with the law of the State of New Jersey and the
federal law of the United States without regard to the law of any other
jurisdiction.

11.     WAIVER OF TRIAL BY JURY AND CLAIMS TO CERTAIN DAMAGES. THE BORROWER
KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES EACH RIGHT THE
BORROWER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO, AND EACH RIGHT TO ASSERT
ANY CLAIM FOR DAMAGES (INCLUDING, BUT NOT LIMITED TO, PUNITIVE DAMAGES) IN
ADDITION TO ACTUAL DAMAGES IN, ANY ACTION OR OTHER LEGAL PROCEEDING, WHETHER
BASED ON ANY CONTRACT OR NEGLIGENT, INTENTIONAL OR OTHER TORT OR OTHERWISE,
ARISING OUT OF OR OTHERWISE RELATING TO (A) THE LOAN OR COLLATERAL, THIS NOTE OR
ANY OTHER WRITING HERETOFORE OR HEREAFTER EXECUTED IN CONNECTION WITH THE LOAN
OR COLLATERAL, (B) ANY TRANSACTION ARISING OUT OF OR OTHERWISE RELATING TO THE
LOAN OR COLLATERAL, THIS NOTE OR ANY SUCH OTHER WRITING OR (C) ANY NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT OF THE LOAN OR COLLATERAL, THIS NOTE
OR ANY SUCH OTHER WRITING.


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12.     CONVERSION; WARRANTS.

        A.      Unless the entire Outstanding Balance hereunder has been repaid
in full by the Company to the Lender on or before the Maturity Date, on the
Maturity Date the Company and the Lender shall cause this Note to be converted
into the an 11.5% Senior Secured Grid Note pursuant to that certain Securities
Purchase Agreement, dated as of September 28, 2004, by and between Lender and
the Company (the "SPA").

        B.      On the date hereof, the Company has issued to the Lender
warrants in the form attached hereto as EXHIBIT A.







                                VYTERIS HOLDINGS (NEVADA), INC.


                                By: /s/ Vincent DeCaprio
                                    --------------------
                                    Name: Vincent DeCaprio, Ph.D.
                                    Title: President and Chief executive Officer



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                                    EXHIBIT A
                                 FORM OF WARRANT













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