Document:

Exhibit 10.138

     

      
        

      

    

    
      Exhibit
        10.138

       

      CONSULTING
        AND SALES PROMOTION AGREEMENT

      

      

      This
        Agreement is made effective as of May 11, 2007 by and between Vyteris, Inc.,
        having an office at 13-01 Pollitt Drive, Fair Lawn, NJ 07410 (“Vyteris”) and the
        Caswood Group, Inc., 811 Ayrault Road, Suite 2, Fairport, New York 14450
        (“Caswood”). The parties agree to the following terms and
        conditions:

      

      
        1.    Consulting
          and Sales Promotion: 

      

      

      (a)    Vyteris
        hereby retains Caswood as its consultant for the marketing and promoting
        Vyteris’s pharmaceutical products (the “Products”) to designated physicians and
        other health care accounts in the Territory. As part of its consulting
        responsibilities, Caswood will hire a full-time sales force to work on Vyteris’s
        behalf as employees of Caswood, as more fully set forth herein and in the
        Proposal for Contract Sales, the Proposal for District Managers and the Proposal
        for In-Service Specialists (the “Proposals”) attached hereto as Exhibit A,
        Exhibit B and Exhibit C. All sales force employees will devote their full
        time
        working hours exclusively to detailing and making calls related to the
        Products.

      

      (b)    Caswood
        will perform the services for Vyteris described in the Proposals (the
“Services”). However, should any terms and conditions of the Proposals conflict
        with the terms and conditions of this Agreement, the terms and conditions
        of
        this Agreement shall govern.

      

      (c)    As
        part
        of the Services and throughout the term of this Agreement, Caswood will recruit,
        interview, hire, train and supervise the sales representatives and district
        managers to work on behalf of Vyteris (the “Employees”). However, Vyteris may
        participate in the final decision-making process for the hiring, retention
        and
        termination, as applicable, of each Employee and will train each Employee
        on the
        Products, sales skills and applicable regulations.

      

      (d)    Caswood
        shall be solely responsible for paying its Employees all wages, bonuses and
        employment taxes, including FICA, Federal unemployment taxes and State
        unemployment taxes, and shall be solely responsible for withholding all amounts
        required by applicable law. Caswood shall be solely responsible for providing
        any and all benefits to its Employees and for all related compliance and
        reporting in connection with ERISA and the regulations promulgated
        thereunder.

      

      (e)    In
        accordance with the terms and conditions of this Agreement and the Exhibits
        hereto, and subject to the Federal Food, Drug and Cosmetic Act, as it may
        be
        amended (the “Act”), all regulations promulgated pursuant thereto and any and
        all applicable federal, state and local laws and regulations, Caswood Employees
        shall use diligent efforts to engage in Detailing (as defined herein) activities
        and make Calls (as defined herein) with respect to the Products to Target
        Prescribers (as defined herein) in the Territory. Caswood shall cause its
        Employees to comply in all material respects with all laws, regulations and
        guidelines, including but not limited to the Prescription Drug Marketing
        Act,
        the Federal Anti-Kickback Statute and AMA Guidelines. In connection with
        Detailing and making Calls, Caswood shall use only samples, Product promotion
        materials and package inserts provided by Vyteris. No Employee of Caswood
        shall
        make any representation, statement, warranty or guaranty with respect to
        any of
        the Products that is not consistent with applicable, current package inserts
        and
        labeling or Vyteris promotional materials provided to such
        Employee.

      

      (f)    Caswood
        shall provide the necessary, experienced management and supervisory personnel
        to
        coordinate and support the activities of its Employees as reasonably appropriate
        to accomplish Caswood’s responsibilities under this Agreement.

      

      (g)    Caswood
        and Vyteris each warrant that it has obtained or will obtain when needed,
        the
        necessary state and federal licenses and registrations to enable the Employees
        to perform the Services covered by this Agreement. 

      

      (h)    Caswood
        agrees that it will conduct drug screens on each Employee prior to that
        Employee’s being assigned to conduct activities under this Agreement. Any drug
        screen administered by or on behalf of Caswood is to be conducted in conformity
        with federal, state or local statutes and regulations.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

         

      

      (i) Vyteris
        shall provide to the Employees at Vyteris’s expense, samples and Product
        promotional materials. Vyteris shall ship all samples and Product promotional
        materials, at Vyteris’s expense, directly to the Employees at addresses provided
        by Caswood. Upon termination of this Agreement, Caswood shall return all
        unused
        samples and Product promotional materials to Vyteris. Vyteris shall retain
        title
        to all samples and Product promotional materials shipped to the Employees
        and
        shall be liable for all sales/use and similar taxes, if applicable, with
        respect
        to all samples and Product promotional materials. Vyteris shall be solely
        responsible for the determination of the content of all Product promotional
        materials and shall ensure that all Product promotional materials and package
        inserts, comply with applicable laws and regulations, including without
        limitation the Act and all regulations thereunder.

      

      (j) Caswood
        agrees to follow and adhere to Vyteris’s standard operating procedures with
        respect to sampling and with respect to handling all inquiries, reports of
        adverse drug experiences and complaints referring to the Products. If any
        such
        information relates to a life threatening condition or other serious adverse
        effect, Caswood will advise Vyteris by telephone at as soon as reasonably
        possible, but in no event longer than 72 hours after a Caswood Employee receives
        such information. Vyteris’s Medical Department shall handle all medical
        inquiries, reports of adverse drug experiences, and complaints concerning
        the
        Products.

      

      (k) Prior
        to
        the start of Detailing or making Calls under this Agreement, Caswood/Vyteris
        shall conduct with Caswood a training program to educate Employees about
        the
        Products (the “Training Program”). Vyteris shall provide all the product
        information for the Training Program. The Training Program shall include
        appropriate “at home” study materials for instruction prior to the start of each
        Training Program. Before any Employee may begin Detailing or making Calls,
        he or
        she must demonstrate an understanding and in-depth knowledge about the Products,
        determined by testing methods (e.g., written exams) to be established by
        Caswood/Vyteris. 

      

      (l) Vyteris
        shall pay for the costs of all training materials, expenses of Caswood’s
        employees conducting the Training Program and the costs associated with renting
        a facility in which to conduct the Training Program. Vyteris shall pay all
        travel, lodging, meals and sundry expenses for the Employees to attend such
        Training Program and compensation to the Employees participating in such
        Training Program.

      

      For
        the
        purposes of this Agreement, the following capitalized terms have the meaning
        ascribed to them as follows:

      

      “Call”
        is
        defined to be a substantive, interactive, face-to-face discussion between
        an
        Employee and a Target Prescriber regarding a Product, which discussion has
        been
        documented by the Target Prescriber’s signature, whenever possible.

      

      “Detailing”
        means
        promoting and selling a Product by explaining to, and discussing with physicians
        and other health care professionals, the Product, its approved uses,
        contraindications, side effects, warnings, precautions and other information
        about such Product, all as approved by Vyteris.

      

      “Target
        Prescribers”
        means
        the physicians or health care professionals identified by Vyteris, as modified
        from time to time.

      

      “Territory”
        means
        the United States, its territories and possessions, as it may be changed
        by
        Vyteris from time to time upon reasonable prior written notice to
        Caswood.

      

      Compensation:
        For 12
        (twelve) field sales representatives for the 6 months’ Services, Vyteris agrees
        to pay Caswood, an estimated cost of $950,000. The following payment will
        be due
        upon execution of LOI (Letter of Intent) or verbal agreement: $350,000.

      

      The
        remaining balance of $600,000 will be paid in four equal installments of
        $150,000 each. The due dates for each installment will be as follows: July
        15th,
        August
        15th,
        September 15th
        and
        October 15th,
        2007.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      For
        4
        (four) part-time district managers for the 6 months’ Services, Vyteris agrees to
        pay Caswood an estimated cost of $210,000. The following payment will be
        due
        upon execution of LOI (Letter of Intent) or verbal agreement:
        $50,000.

      

      The
        remaining balance of $160,000 will be paid in four equal installments of
        $40,000
        each. The due dates for each installment will be as follows: July 15th,
        August
        15th,
        September 15th
        and
        October 15th,
        2007.

      

      For
        5
        (five) in-service specialists for the 6 months’ Services, Vyteris agrees to pay
        Caswood an estimated cost of $425,700. The following payment will be due
        upon
        execution of LOI (Letter of Intent) or verbal agreement: $125,700.

      

      The
        remaining balance of $300,000 will be paid in four equal installments of
        $75,000
        each. The due dates for each installment will be as follows: July 15th,
        August
        15th,
        September 15th
        and
        October 15th,
        2007.

      

      In
        addition, Caswood will invoice Vyteris monthly for any and all reasonable
        additional costs (including, but not limited to, those outlined on Page 6
        of the
        Proposal) incurred in connection with the provision of the Services, together
        with receipts for same. Any individual expense in excess of $250.00 shall
        be
        approved in writing by Vyteris prior to its incurrence by Caswood. Vyteris
        will
        pay each invoice within thirty (30) days from the date of such
        invoice.

      

      3.    Manner
        of Performance; Investigation:
        Caswood
        represents that Caswood has the requisite expertise, ability and legal right
        to
        render the Services and will perform the Services in an efficient manner.
        Caswood will abide by all laws, rules and regulations that apply to it in
        the
        performance of the Services, including applicable requirements regarding
        equal
        employment opportunity. Each of the Employees performing Services will have
        the
        expertise to perform assigned Services in an efficient manner.

      

      Caswood
        represents and warrants that the Services will be provided in a professional,
        competent and ethical manner, and in accordance with all laws, regulations
        and
        guidelines.

      

      Caswood
        shall maintain accurate records of all Detailing and Calls completed in a
        format
        to be agreed upon by Caswood and Vyteris, including all call planning and
        call
        tracking reports Caswood shall provide monthly Detailing and Call activity
        reports to Vyteris by not later than the last business day of the following
        month. Upon Vyteris’s request, Caswood’s management representatives shall
        consult from time to time with Vyteris as to the progress of Caswood’s efforts
        in making Calls and Detailing of the Products. 

      

      All
        Employees shall remain exclusively under the direct authority and control
        of
        Caswood. Nevertheless, in the event Vyteris reasonably determines that any
        Employee has not conducted his or her activities within the parameters of
        this
        Agreement, e.g., including, without limitation, failure to provide sufficient
        information during a Call, failure to provide adequate documentation for
        Vyteris
        to determine if a Call was made, promoting or discussing a Product in a way
        that
        is incomplete or inconsistent with applicable current package inserts and
        labeling or product promotional material provided to such Employee, or has
        otherwise acted to the detriment of Vyteris, Vyteris has the right to request
        that Caswood investigate the allegation immediately and provide Vyteris a
        plan
        of remedy, which may include removing the Employee from Detailing and making
        Calls if deemed necessary by Caswood. If Caswood removes any Employee from
        Detailing and making Calls, Caswood shall replace such Employee as soon as
        possible at Caswood’s sole cost and expense 

      

      4.    Independent
        Contractor:
        Caswood
        is an independent contractor, not an employee or agent of Vyteris. Nothing
        in
        this Agreement shall render Caswood, or any of its subcontractors, agents
        or
        employees including the Employees, an employee or agent of Vyteris. Vyteris
        recognizes that Caswood retains all the rights and privileges of an employer,
        including but not limited to the right to hire, direct, discipline, compensate,
        and terminate the Employees and its other employees. The Employees will perform
        the Services under the primary direction and control of Caswood. Neither
        party
        shall be considered an agent or partner or joint venturer of the other party
        for
        any purposes. The parties intend that they shall not [?] be considered
        co-employers for workers’ compensation purposes. Caswood assumes any and all
        liabilities regarding Section 1706 of the Tax Reform Act of 1986 and Section
        414(n) of the Internal Revenue Code of 1986, as amended. Caswood shall also
        be
        responsible for all obligations regarding the retention of the Employees,
        including but not limited to selecting, contracting, compensating, supervising,
        evaluating and terminating such sales representatives assigned to the Vyteris
        account, but such Caswood obligations shall be exercised with input and advice
        from Vyteris.

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      5.    Indemnity: 

      (a)    Vyteris
        shall defend, indemnify and hold harmless Caswood and its officers, directors,
        employees, agents and subcontractors from and against all claims, liabilities,
        damages and expenses payable to third parties (including, but not limited
        to,
        reasonable attorneys’ fees and disbursements and court costs and any reasonable
        attorneys’ fees and disbursements and court costs incurred in establishing
        liability under and enforcing this indemnity) to the extent arising out of
        or
        resulting from (i) a breach of this Agreement by Vyteris, or (ii) any personal
        injury, death, malpractice, infringement of intellectual property, product
        liability or violation of law or regulation arising from the promotion, sale,
        or
        use of the Products. Except to the extent of Caswood’s indemnity obligations set
        forth below, Caswood shall not be responsible for Vyteris’s acts or failure to
        act or the acts or failure to act of Caswood’s employees, officers or agents
        while performing the Services whether on Caswood’s premises or elsewhere and
        Vyteris shall defend, indemnify and hold Caswood harmless from any and all
        liability for injuries to persons or property attributable to such acts.
        Caswood
        agrees that it will permit Vyteris to control the defense, select counsel
        and
        institute settlement of any such claims and will, at the expense of Vyteris,
        cooperate fully with Vyteris in the defense of any such claims; provided
        that
        Vyteris shall not settle any claim in a manner that would adversely affect,
        or
        impose any obligations on, Caswood without Caswood’s prior written consent
        (which consent shall not be withheld unreasonably).

      

      (b)    Caswood
        shall defend, indemnify and hold harmless Vyteris and its officers, directors
        and employees from and against all claims, liabilities, damages and expenses
        payable to third parties (including reasonable attorney’s fees and disbursements
        and court costs and any reasonable attorney’s fees incurred in establishing
        liability under and enforcing this indemnity) to the extent arising out of
        or
        resulting from the breach of this Agreement by Caswood, which includes but
        is
        not limited to promoting or making statements about the Products that are
        inconsistent with the language of the applicable package inserts, labeling
        or
        Product promotional materials, or the failure to follow and adhere to any
        material extent to the standard operating procedures that have been communicated
        by Vyteris to Caswood. Except to the extent of Vyteris’s indemnity obligations
        set forth above, Vyteris shall not be responsible for Caswood’s acts or failure
        to act or the acts or failure to act of Caswood’s employees, officers or agents
        while performing the Services whether on Vyteris’s premises or elsewhere and
        Caswood shall defend, indemnify and hold Vyteris harmless from any and all
        liability for injuries to persons or property attributable to such acts.
        Vyteris
        agrees that it will permit Caswood to control the defense, select counsel
        and
        institute settlement of any such claims, and will, at the expense of Caswood,
        cooperate fully with Caswood in the defense of any such claims; provided
        that
        Caswood shall not settle any claim in a manner that would adversely affect,
        or
        impose any obligations on, Vyteris without Vyteris’s prior written consent
        (which consent shall not be withheld unreasonably).

      

      (c)    Upon
        the
        final resolution of any claim, action or proceeding for which a party had
        not
        made a claim for indemnity under this section (whether resolved by judgment,
        settlement or otherwise), if and to the extent that it is thereafter determined
        that any such claim, liability, damage or expense related to or arose from
        the
        other party’s and/or its employees’, officers’ or agents’ breach of this
        Agreement, in whole or in part, the breaching party shall indemnify the other
        party in accordance with paragraphs (a) or (b) above, as
        applicable.

       

      6.    Debarment.
        By
        entering into this Agreement Caswood represents that neither it nor, to its
        knowledge, any of its employees, officers, directors or agents have been,
        or
        during the term of this Agreement will be debarred by the U.S. Food and Drug
        Administration and, if requested by Vyteris or the U.S. Food and Drug
        Administration, Caswood agrees to provide a written statement so
        certifying.

      

      7.    Publicity.
        Except
        as may be required by law or regulatory authorities, neither Vyteris nor
        Caswood
        shall release or generate any publicity concerning the transactions contemplated
        hereunder without the express consent of the other, which consent shall not
        be
        unreasonably withheld or delayed. The term “publicity” shall not include
        responses to press or trade or securities analyst inquiries or internal
        communications by either party directed solely to its employees, provided
        that
        such responses or communications do not describe the specific terms of the
        transactions contemplated hereunder in substantially greater detail than
        contained in a description of the transactions agreed to by both Vyteris
        and
        Caswood, and provided, further that each party will be free to provide employees
        with information required in the performance of their duties. 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      8.    Agreement
        Not Assignable:
        This
        Agreement is not assignable in whole or any part by Vyteris or Caswood without
        the prior written consent of the other.

      

      9.    Confidentiality:
        The
        parties acknowledge and agree that they are bound by a Confidentiality Agreement
        dated which remains in full force and effect throughout the term of this
        Agreement. 

      

      10.    Force
        Majeure:
        The
        obligations of the parties hereunder shall be suspended by the occurrence
        of any
        unforeseeable event beyond the reasonable control of the parties, such as
        acts
        of God, war mobilization, riot, sabotage, explosion, fire or other casualty,
        power failure, labor disturbances, or law or regulation restricting performance;
        provided, however, that each party shall take reasonable measures to remove
        the
        disability and resume performance at the earliest possible date.

      

      11.    Miscellaneous:
        The
        headings used herein are for ease of reference only and are not to be used
        in
        the interpretation or construction of this Agreement. If any provision of
        this
        Agreement shall be held invalid under any applicable law, such invalidity
        shall
        not affect any other provision of this Agreement.

      

      12.    Agreement
        Inclusive:
        With
        respect to the subject matter hereof, this Agreement, including the attachments
        hereto and the Confidentiality Agreement between the parties, supersedes
        all
        previous agreements (including the letter of intent dated April 1, 2007)
        and/or
        negotiations of any kind between the parties and contains the complete final
        conclusive embodiment of the parties’ Agreement.

      

      13.    Notices:
        All
        notices or other communications provided for by this Agreement shall be made
        in
        writing and shall be deemed properly delivered when delivered (a) personally
        or
        (b) by the mailing of such notice to the party entitled thereto, registered
        or
        certified mail, postage pre-paid, at its address first set forth above (or
        to
        such other address as is designated in writing by that party to the other
        party).

      

      14.    Modification
        and Waiver:
        Any
        modification and/or waiver of any provisions of this Agreement shall be
        effective only if it is in writing and signed by both parties hereto. No
        previous course of dealing or performance or usage of trade not specifically
        set
        forth in this Agreement shall be admissible to explain, modify or contradict
        this Agreement.

      

      15.    Governing
        Law:
        This
        Agreement shall be construed in accordance with the laws of the State of
        New
        York.

      

      16.    Term
        and Termination:
        This
        Agreement may be terminated at any time by either party upon sixty (60) days
        written notice. Vyteris may terminate this Agreement upon sixty (60) days
        written notice, specifying in detail Caswood’s failure to perform, if within
        sixty (60) days after Caswood’s receipt of such notice Caswood has failed to
        cure its default. Such notice to Caswood will describe in detail Caswood’s
        failure to perform. If, however, within sixty (60) days of receipt of such
        notice Caswood cures its failure to perform the Services, then this Agreement
        shall continue in full force and effect. In the absence of termination, this
        Agreement shall continue for six (6) months from the date first set forth
        above
        with the option to extend the term. The parties acknowledge that any extension
        of this Agreement will be upon other terms and conditions acceptable to the
        parties. If Vyteris terminates this Agreement in the absence of Caswood’s
        failure to cure a default hereunder, Vyteris shall pay Caswood : (i) the
        full
        amount of payments already received (ii) any additional expenses not included
        in
        the estimated cost of the proposal, (iii) other fees and expenses incurred
        by
        Caswood prior to such termination, (iv) any scheduled payment due and payable
        within the 60 day notification period.

      

      17.    Sales
        Team Conversion Fees: If
        Vyteris hires any personnel from the sales team during the first six months
        of
        this Agreement, the cost will be 25% of the annual base salary plus
        bonuses.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      If
        Vyteris hires any personnel from the sales team after the initial six months
        of
        the Agreement or within three months of the termination of the contract,
        the
        cost will be $10,000 per sales representative or sales manager.

      

      18.    Signature
        Authority:
        Each
        signatory to this Agreement represents and warrants to the other that he
        or she
        has signature authority and is empowered on behalf of his or her respective
        party to execute this Agreement.

       

      IN
        WITNESS WHEREOF, the
        parties have caused this Agreement to be duly executed as of the date written
        above.

       

       

      

      
        	
                VYTERIS, INC.

                 

                
                  By: 
                    Timothy
                    McIntyre

                   

                   

                  Date:_________________________ 

                  Print
                    Name:___________________Name:
                    Isabel Casamayor

                  Title:
                    CEO
                    & President 

                   

                

              	
                THE CASWOOD GROUP, INC.

                 

                
                  By:
                    /s/ Isabel Casamayor

                   

                   

                   

                  Date:_________________________ 

                   

                  Print
                    Name: Isabel Casamayor
Title: President

                

              

      

      

       

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    
 

    
      Exhibit
        A

      

      

      

      

      The
        Caswood Group, Inc.

      

      

      

      Proposal
        for Vyteris, Inc.

      

      

      

      

      May
        8, 2007

      

      

      

      

      

      This
        proposal is valid for 120 days from the date written
        above.

      

      

      

      

      

      

      

      Confidential

      

      The
        document is provided on the understanding that the information contained
        in it
        remains the property of The Caswood Group, Inc. and that it shall be kept
        confidential and used only by the company, or person, to whom it is
        addressed.

      

      

      

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      

      

      Vyteris
        -
        Caswood

      

      Proposal
        Contents

       

      
        

          
            	
                    Executive
                      Summary

                  	
                    3

                  
	 	 
	
                    Caswood
                      Sales Force Project Cost Breakdown

                  	
                    4-6

                  
	 	 
	
                    Recruiting

                  	
                    7

                  
	 	 
	
                    Training

                  	
                    8

                  
	 	 
	
                    Incentive
                      for Sales Representatives

                  	
                    9

                  
	 	 
	
                    Representatives
                      Conversion Fees

                  	
                    10

                  
	 	 
	
                    Payment
                      Structure

                  	
                    10

                  
	 	 
	
                    Term
                      & Termination

                  	
                    11

                  
	 	 
	
                    Signature

                  	
                    11

                  

          

        

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

      

      Executive
        Summary

      

      Vyteris,
        Inc., headquartered in Fair Lawn, New Jersey , specializes in the research,
        development and manufacturing of transdermal medication delivery products.
        Vyteris’ proprietary active transdermal drug delivery (iontophoresis) technology
        delivers drugs comfortably through the skin using low-level electrical
        energy.  Vyteris' first product, LidoSite®, which provides dermal analgesia
        prior to venipuncture (IV catheter insertions, blood draws, etc.) and
        superficial dermatological procedures, was the first FDA-approved active
        patch.  LidoSite is currently marketed
        to hospitals by B. Braun Medical, Inc.  The focus of Caswood’s contract
        sales project with Vyteris is to capture the physicans’ office market through a
        direct sales strategy. 

       

       

      The
        parameters for a 6 month pilot program are:

      

      	·  	
              Twelve
                territories in major metropolitan areas 

            

      	·  	
              Target
                audience of high value offices 

            

      	·  	
              Six
                week call cycle

            

      

      The
        total
        estimated cost for 12 field representatives is $950,000. This includes salaries,
        benefits and expenses for the sales team, recruiting, call reporting and
        project
        management. 

      

      This
        proposal assumes that the field representatives will work five days per week
        and
        will make, on average, eight (8) calls per day. The sales force will be
        exclusively dedicated to detailing Vyteris’s products on each call.

      

      The
        full-time field representatives will be working exclusively for Vyteris and
        they
        will be Caswood employees (not independent contractors). 

      

      This
        Agreement reflects Caswood’s understanding of Vyteris’s needs.

      

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

      

      Caswood
        Sales Force Project Cost Breakdown

      

      Cost
        Calculation Assumptions

      

      Included
        in Direct Field Expenses:

      

      	·  	
              Salaries
                and bonuses (representatives)

            

      	·  	
              Payroll
                and state taxes (unemployment/disability)

            

      	·  	
              Workers
                compensation

            

      	·  	
              Healthcare
                benefits

            

      	·  	
              401K

            

      	·  	
              Mileage,
                tolls, parking and car allowance

            

      	·  	
              Payroll
                fees and state fees

            

      	·  	
              Driving
                records (twice a year for sales team), drug tests, credit checks
                and
                professional reference checks (new
                representatives)

            

      	·  	
              Office
                supplies, detail bags, rolling carts, business cards and
                forms.

            

      	·  	
              Postage
                

            

      	·  	
              Development
                of and updates to Sales Force Reference
                Book

            

      	·  	
              Employee
                handbook (updated annually and
                distributed)

            

      	·  	
              Climate
                Controlled storage units

            

      

      

      

      

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

       

      Caswood
        Sales Force Project Cost Breakdown (Continued)

      

      	·  	
              Recruitment
                and re-recruitment for vacancies, advertising expenses, contracts
                and
                letters of employment offer/termination to sales
                representatives

            

      	·  	
              Training
                session with training team for replacement sales representatives
                hired for
                the duration of the project

            

      	·  	
              Territory
                alignment/management; process of analyzing data and territory optimization
                for the purpose of targeting efficiencies

            

      	·  	
              Quarterly
                territory updates; creating and distributing updated physician lists
                to
                sales team

            

      	·  	
              Coordinating
                efforts with client’s supply chain for sample
                shipments

            

      	·  	
              Programming
                expenses and management of call reporting and sample management
                reports

            

      	·  	
              Call
                reporting forms

            

      	·  	
              Data
                entry function

            

      	·  	
              Updates
                to and maintenance of Web based reporting
                system

            

      	·  	
              WebEx
                sessions as needed (training purposes)

            

      	·  	
              Weekly/bi-weekly
                conference calls

            

      

      Included
        in Management/Administrative/Overhead Expenses:  

      

      	·  	
              Salary,
                benefits, and payroll taxes for home office management support team
                

            

      	·  	
              Project
                Management including one home office based manager, one payroll/expense
                coordinator, one administrative assistant, and one data entry
                specialist

            

      	·  	
              Executive
                Senior Management strategic planning (on going policies/issues and
                planning meetings)

            

      

      

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

      
 

      Caswood
        Sales Force Project Cost Breakdown (Continued)

      

      	·  	
              Call
                reporting analysis, including time off territory, management of samples
                including shipments and disbursements to physicians and inventory
                reconciliations

            

      	·  	
              HR
                manager/coordinator (responsible for HR issues disciplinary actions
                and
                hiring policies)

            

      	·  	
              Sexual
                harassment training

            

      	·  	
              Financing/Accounting
                - including taxes by state and liability
                insurance

            

      	·  	
              Phone
                line with 800# for sales force and physicians requesting samples
                or
                requesting to contact the sales
                representative

            

      

      Estimates
        of additional expenses to be billed at cost:

      

      	·  	
              Cost
                of sales skills training to be conducted at the initial training
                meeting
                (cost to be determined)

            

      	·  	
              Cost
                of travel, hotel and meals for sales team and Caswood team to attend
                training meetings (cost to be determined)

            

      

      Not
        included in the project budget:

      

      	·  	
              Cost
                of lunches and materials for Lunch and Learn
                programs

            

      	·  	
              Cost
                of additional sales/training update meetings held throughout the
                year
                other than those specified as included in the project
                budget

            

      	·  	
              Cost
                of samples, promotional materials, detail aids, training materials
                or
                premiums

            

      	·  	
              Cost
                of shipping any of the above items to the sales
                team

            

      	·  	
              Overnight
                travel expenses for the sales team

            

      	·  	
              Cost
                of any year-end incentive program for the sales team provided by
                Vyteris

            

      	·  	
              Cost
                of third party target list or additional
                data

            

      	·  	
              Cost
                of laptop computers and cell phones

            

      

      

      
        
          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

       

      Recruiting
        Program 

      

      Upon
        execution of a LOI, Caswood will begin the process of screening and selecting
        sales personnel for territories. 

      

      Caswood
        will handle the initial recruitment and, if necessary, the re-recruitment
        to
        fill vacancies occurring for the duration of the project. 

      

      Qualifications

      

      Final
        qualifications will be approved by Vyteris prior to the initiation of the
        recruitment phase for the sales representatives.

      

      Recommended
        Profile for Vyteris Sales Representative:

      

      	·  	
              Prior
                pharmaceutical sales experience

            

      	·  	
              Knowledge
                of geographic locations of target
                audience

            

      	·  	
              Ideally,
                the representative will have established working relationships with
                members of the target audience

            

      	·  	
              Education
                - B.S., B.A. degree

            

      	·  	
              Excellent
                communication and customer service skills

            

      	·  	
              No
                concurrent work arrangement

            

      	·  	
              Ability
                to grasp technical material

            

      	·  	
              Ability
                to work independently 

            

      

      The
        candidates for the sales representative positions are selected as
        follows:

      

      	1.  	
              Selection
                of resumes to determine if they are qualified for the territories
                available. The selection includes screening over the telephone (following
                the guidelines that Caswood/Vyteris have
                developed).

            

      	2.  	
              Caswood
                managers will conduct the initial screening interviews and set up
                the
                face-to-face interviews for the Vyteris
                manager.

            

      	3.  	
              Vyteris
                management will conduct follow up phone and face-to-face interviews
                and
                will select the candidates. 

            

      	4.  	
              Caswood
                makes an offer to the candidate.

            

       

      
        
          
          

        

        
          A-7

          
            

          

        

        
          
          

        

      

       

      Training
        

      

      The
        initial training meeting (date and location to be determined) will focus
        on
        product training, sales skills training, and the Vyteris selling process.
        All
        sales representatives will also participate in a WebEx training session prior
        to
        the initial training meeting to cover administrative details as well as to
        review both the PhRMA guidelines and HR policies including training on sexual
        harassment. The cost of the initial training meeting has not been included
        in
        the budget and will be billed separately.

      

      This
        Agreement assumes that on-going training for new products/selling materials
        will
        be accomplished through a combination of WebEx meetings and home study. The
        budget also includes the training of new sales representatives that are hired
        during the contract due to turnover (vacancy).

      

      

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

      

      

      Incentive
        for Sales Team

      

      The
        bonus
        plan should be designed as a key motivator for the sales team.

      

      Caswood
        will work with Vyteris to develop the parameters of the incentive program
        keeping in mind that it is critical to have attainable and clear/easy to
        understand goals. Plus, the parameters and goals should be comparable to
        incentive programs in the industry.

      

      Following
        are parameters that Caswood would recommend for an incentive
        program:

      

      	·  	
              Quality
                and quantity of calls

            

      	·  	
              Professionalism

            

      	·  	
              Organization

            

      	·  	
              Customer
                focus

            

      	·  	
              Positive
                attitude

            

      	·  	
              Knowledge

            

      	·  	
              Relationship
                building

            

      	·  	
              Profile
                records

            

      	·  	
              Feedback
                from physicians

            

      	·  	
              Increase
                in sales and/or recommendations 

            

      

      

      
        
          
          

        

        
          A-9

          
            

          

        

        
          
          

        

      

      

      Sales
        Team Conversion Fees

      

      If
        Vyteris hires any personnel from the sales team during the first six months
        of
        this Agreement, the cost will be 25% of the annual base salary plus
        bonuses.

      

      If
        Vyteris hires any personnel from the sales team after the initial six months
        of
        the Agreement or within three months of the termination of the contract,
        the
        cost will be $10,000 per sales representative or sales manager.

      

      Proposed
        Payment Structure

      

      Annual
        agreement with an estimated cost of $950,000 for 12 field sales representatives
        for six months.

      

      The
        following payment will be due upon execution of LOI (Letter of Intent) or
        verbal
        agreement: $350,000. 

      

      The
        remaining amount of $600,000 will be paid in four equal installments of $150,000
        each. The due dates for each installment will coincide with the first four
        months of the project.

      

      
        
          
          

        

        
          A-10

          
            

          

        

        
          
          

        

      

      

      Term
        and Termination 

      

      This
        Agreement may be terminated at any time by either party upon sixty (60) days
        written notice. Vyteris may terminate this Agreement upon sixty (60) days
        written notice to Caswood for Caswood’s failure to perform the Services. Such
        notice to Caswood will describe in detail Caswood’s failure to perform. If
        within sixty (60) days of receipt of such notice from Vyteris, Caswood corrects
        its failure to perform the Services, then the Agreement shall continue in
        full
        force and effect. In the absence of termination, this Agreement shall continue
        for six (6) months with the option to extend the contract. The parties
        acknowledge that any extension of this Agreement will be upon such other
        terms
        and conditions acceptable to the parties. 

      

      Cancellation
        of the project and termination of this Agreement at any time after the date
        hereof and prior to the expiration of the term of the Agreement for any reason
        other than Caswood’s failure to perform the Services will entitle Caswood to (i)
        the full amount of payments already received (ii) any additional expenses
        not
        included in the estimated cost of the proposal, (iii) other fees and expenses
        incurred by Caswood prior to such termination, (iv) any scheduled payment
        due
        and payable within the 60 day notification period.

      

       

      

      Signatures

       

      ACCEPTED
        AND AGREED TO:

       

      
        
          	
                  Vyteris,
                    Inc.

                	
                  The
                    Caswood Group, Inc.

                
	 	 
	
                  By:____________________

                	
                  By:____________________

                
	 	 
	 	 
	
                  Date:___________________

                	
                  Date:___________________

                

        

      

    

     

     

    11

     

     

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

    
 

    
      Exhibit
        B

      

      

      

      

      

      The
        Caswood Group, Inc.

      

      

      

      Proposal
        for Vyteris, Inc.

      

      Addendum
        

      to
        Proposal dated May 8, 2007

      

      

      July
        6, 2007

      

      

      

      

      

      

      This
        proposal is valid for 120 days from the date written
        above.

      

      

      

      

      

      Confidential

      

      The
        document is provided on the understanding that the information contained
        in it
        remains the property of The Caswood Group, Inc. and that it shall be kept
        confidential and used only by the company, or person, to whom it is
        addressed.

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

      Vyteris
        -
        Caswood

      Addendum
        to Proposal

      

      

        
          	
                  Executive
                    Summary

                	
                  3

                
	 	 
	
                  Caswood
                    Sales Force Project Cost Breakdown

                	
                  4-5

                
	 	 
	
                  Recruiting

                	
                  6

                
	 	 
	
                  Training

                	
                  7

                
	 	 
	
                  Incentive
                    for Sales Managers

                	
                  8

                
	 	 
	
                  Managers
                    Conversion Fees

                	
                  8

                
	 	 
	
                  Payment
                    Structure

                	
                  8

                
	 	 
	
                  Term
                    & Termination

                	
                  9

                
	 	 
	
                  Signature

                	
                  9

                

        

       

      
        
          
          

        

        
          B-2

          
            

          

        

        
          
          

        

      

       

      Executive
        Summary

      

      The
        purpose of this addendum is to provide Vyteris with a description of the
        costs
        associated with maintaining four full-time (5 days/week) district managers
        in
        the following locations: 

       

      	·  	
              NYC/New
                Jersey

            

       

      	·  	
              Tampa,
                FL

            

       

      	·  	
              Dallas,
                TX

            

       

      	·  	
              Raleigh/Durham,
                NC

            

       

      

       

      The
        district manager will be responsible for:

       

      	·  	
              Direct
                management of Vyteris contract sales
                representatives;

            

       

      	·  	
              Advisor
                to LabCorp sales teams;

            

       

      	·  	
              Liaison
                with key LidoSite accounts;

            

       

      

      This
        document identifies the cost and describes the services to be provided by
        Caswood for a 6-month pilot program. 

      

      The
        total
        estimated cost for 4 full-time (5 days/week) district sales managers during
        this
        6-month period is $305,000. This amount includes salaries, benefits and expenses
        for the sales management team, recruiting, and project management. 

      

      The
        full-time district managers will be working exclusively for Vyteris and they
        will be Caswood employees (not independent contractors). 

      

      This
        Agreement reflects Caswood’s understanding of Vyteris’s needs.

      

      

      
        
          
          

        

        
          B-3

          
            

          

        

        
          
          

        

      

      

      Caswood
        Sales Force Project Cost Breakdown

      

      Included
        in Direct Field Expenses:

      

      	·  	
              Salaries
                and bonuses 

            

      	·  	
              Payroll
                and state taxes (unemployment/disability)

            

      	·  	
              Workers
                compensation

            

      	·  	
              Healthcare
                benefits

            

      	·  	
              401K

            

      	·  	
              Mileage,
                tolls, parking and car allowance

            

      	·  	
              Payroll
                fees and state fees

            

      	·  	
              Driving
                records (twice a year), drug tests, credit checks and professional
                reference checks

            

      	·  	
              Office
                supplies, business cards and forms

            

      	·  	
              Postage
                

            

      	·  	
              Employee
                handbook (updated annually and
                distributed)

            

      	·  	
              Recruitment
                and re-recruitment for vacancies, advertising expenses, contracts
                and
                letters of employment offer/termination to district
                managers.

            

      	·  	
              Training
                session with training team for replacement district managers hired
                for the
                duration of the project

            

      	·  	
              WebEx
                sessions as needed (training purposes)

            

      	·  	
              Weekly/bi-weekly
                conference calls

            

      

      Included
        in Management/Administrative/Overhead Expenses:  

      

      	·  	
              Salary,
                benefits, and payroll taxes for home office management support team
                

            

      	·  	
              Executive
                Senior Management strategic planning (on going policies/issues and
                planning meetings)

            

      

      

      
        
          
          

        

        
          B-4

          
            

          

        

        
          
          

        

      

       

      Caswood
        Sales Force Project Cost Breakdown (Continued)

      

      	·  	
              HR
                manager/coordinator (responsible for HR issues, disciplinary actions
                and
                hiring policies)

            

      	·  	
              Sexual
                harassment training

            

      	·  	
              Financing/Accounting
                - including taxes by state and liability
                insurance

            

      

      Estimates
        of additional expenses to be billed at cost:

      

      	·  	
              Cost
                of training to be conducted at the initial training meeting (cost
                to be
                determined)

            

      	·  	
              Cost
                of travel, hotel and meals for sales team and Caswood team to attend
                training meetings (cost to be determined)

            

      

      Not
        included in the project budget:

      

      	·  	
              Cost
                of lunches and materials for in-service
                programs

            

      	·  	
              Cost
                of additional sales/training update meetings held throughout the
                year
                other than those specified as included in the project
                budget

            

      	·  	
              Cost
                of samples, promotional materials, detail aids, training materials
                or
                premiums

            

      	·  	
              Cost
                of shipping any of the above items to the district
                managers

            

      	·  	
              Overnight
                travel expenses for the district managers

            

      	·  	
              Cost
                of any year-end incentive program for the district managers provided
                by
                Vyteris

            

      	·  	
              Cost
                of laptop computers and cell phones

            

      

      

      

      
        
          
          

        

        
          B-5

          
            

          

        

        
          
          

        

      

      

      Recruiting
        Program 

      

      Upon
        execution of a LOI, Caswood will begin the process of screening and selecting
        the district managers. 

      

      Caswood
        will handle the initial recruitment and, if necessary, the re-recruitment
        to
        fill vacancies during the duration of the project. 

      

      Qualifications

      

      Final
        qualifications will be approved by Vyteris prior to the initiation of the
        recruitment phase for the district managers.

      

      Recommended
        Profile for Vyteris District Managers:

      

      	·  	
              Track
                record of success as a district manager within the pharmaceutical
                industry

            

      	·  	
              Prior
                experience serving as liaison with key
                accounts

            

      	·  	
              Proven
                ability to influence the behavior of others without the direct authority
                to do so

            

      	·  	
              Education
                - B.S., B.A. degree

            

      	·  	
              Excellent
                communication and customer service skills

            

      	·  	
              No
                concurrent work arrangement

            

      	·  	
              Ability
                to grasp technical material and work independently
                

            

      

      The
        candidates for the district manager positions are selected as
        follows:

      

      	1.  	
              Selection
                of resumes to determine if they are qualified for the positions available.
                The selection includes screening over the telephone (following the
                guidelines that Caswood/Vyteris have
                developed).

            

      	2.  	
              Caswood
                managers will conduct the initial screening interviews and set up
                the
                face-to-face interviews for the Vyteris V.P., Sales and Marketing.
                

            

      	3.  	
              Vyteris
                management will conduct follow up phone and face-to-face interviews
                and
                will select the candidates. 

            

      	4.  	
              Caswood
                makes an offer to the candidate.

            

       

      
        
          
          

        

        
          B-6

          
            

          

        

        
          
          

        

      

       

      Training
        

      

      The
        initial training meeting (date and location to be determined) will focus
        on
        orientation to Vyteris, product training, Vyteris selling process, and market
        dynamics (e.g. reimbursement, supply chain, regulatory restrictions, etc.)
        that
        are unique to the sales/distribution of LidoSite. 

      All
        district managers will also participate in a WebEx training session prior
        to the
        initial training meeting to cover administrative details as well as to review
        both the PhRMA guidelines and HR policies including training on sexual
        harassment. The cost of the initial training meeting has not been included
        in
        the budget and will be billed separately.

      

      This
        Agreement assumes that on-going training for new products/selling materials
        will
        be accomplished through a combination of WebEx meetings and home study. The
        budget also includes the training of new district managers that are hired
        during
        the contract due to turnover (vacancy).

      

      

      
        
          
          

        

        
          B-7

          
            

          

        

        
          
          

        

      

      

      Incentive
        for Sales Managers

      

      The
        bonus
        plan should be designed as a key motivator for the district managers.

      

      Caswood
        will work with Vyteris to develop the parameters of the incentive program
        keeping in mind that it is critical to have attainable and clear/easy to
        understand goals. Plus, the parameters and goals should be comparable to
        incentive programs in the industry.

      

      Sales
        Team Conversion Fees

      

      If
        Vyteris hires any district manager during the first six months of this
        Agreement, the cost will be 25% of the annual base salary plus
        bonuses.

      

      If
        Vyteris hires any district manager after the initial six months of the Agreement
        or within three months of the termination of the contract, the cost will
        be
        $10,000 per district manager.

      

      Proposed
        Payment Structure

      

      Estimated
        cost of $305,000 for 4 full-time district managers for six months.

      

      The
        following payment will be due upon execution of LOI (Letter of Intent) or
        verbal
        agreement: $50,000. 

      

      The
        remaining amount of $255,000 will be paid in four equal installments of $63,750
        each. The due dates for each installment will coincide with the first four
        months of the project.

      

      
        
          
          

        

        
          B-8

          
            

          

        

        
          
          

        

      

       

      Term
        and Termination 

      

      This
        Agreement may be terminated at any time by either party upon sixty (60) days
        written notice. Vyteris may terminate this Agreement upon sixty (60) days
        written notice to Caswood for Caswood’s failure to perform the Services. Such
        notice to Caswood will describe in detail Caswood’s failure to perform. If
        within sixty (60) days of receipt of such notice from Vyteris, Caswood corrects
        its failure to perform the Services, then the Agreement shall continue in
        full
        force and effect. In the absence of termination, this Agreement shall continue
        for six (6) months with the option to extend the contract. The parties
        acknowledge that any extension of this Agreement will be upon such other
        terms
        and conditions acceptable to the parties. 

      

      Cancellation
        of the project and termination of this Agreement at any time after the date
        hereof and prior to the expiration of the term of the Agreement for any reason
        other than Caswood’s failure to perform the Services will entitle Caswood to (i)
        the full amount of payments already received (ii) any additional expenses
        not
        included in the estimated cost of the proposal, (iii) other fees and expenses
        incurred by Caswood prior to such termination, (iv) any scheduled payment
        due
        and payable within the 60 day notification period.

      

      

      

      Signatures

      

      ACCEPTED
        AND AGREED TO:

      

      
        	
                Vyteris,
                  Inc.

              	
                The
                  Caswood Group, Inc.

              
	 	 
	
                By:____________________

              	
                By:____________________

              
	 	 
	 	 
	
                Date:___________________

              	
                Date:___________________

              

      

       

      
9

       

       

      
        
          
          

        

        
          B-9

          
            

          

        

        
          
          

        

      

    

    
 

    
      Exhibit
        C

      

      

      

      The
        Caswood Group, Inc.

      

      

      

      Proposal
        for Vyteris, Inc.

      

      Addendum
        

      to
        Proposal dated May 8, 2007

      

      In-Service
        Specialists

      

      June
        14, 2007

      

      

      

      

      

      

      This
        proposal is valid for 120 days from the date written
        above.

      

      

      

      

      

      Confidential

      

      The
        document is provided on the understanding that the information contained
        in it
        remains the property of The Caswood Group, Inc. and that it shall be kept
        confidential and used only by the company, or person, to whom it is
        addressed.

      

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

      

      Vyteris
        -
        Caswood

      

      Addendum
        to Proposal

       

      
        	
                Executive
                  Summary

              	
                3

              
	 	 
	
                Caswood
                  Sales Force Project Cost Breakdown

              	
                4-5

              
	 	 
	
                Recruiting

              	
                6

              
	 	 
	
                Training

              	
                7

              
	 	 
	
                Incentive
                  for In-Service Specialists

              	
                8

              
	 	 
	
                Specialists
                  Conversion Fees

              	
                8

              
	 	 
	
                Proposed
                  Payment Structure

              	
                8

              
	 	 
	
                Term
                  & Termination

              	
                9

              
	 	 
	
                Signature

              	
                9

              

      

      

      

      

      
        
          
          

        

        
          C-2

          
            

          

        

        
          
          

        

      

      
 

      Executive
        Summary

      

      The
        purpose of this addendum is to provide Vyteris with a description of the
        costs
        associated with maintaining five (5) full time in-service specialists in
        the
        following locations: 

       

      	·  	
              NYC/New
                Jersey(2)

            

       

      	·  	
              Tampa,
                FL(1)

            

       

      	·  	
              Dallas,
                TX(1)

            

       

      	·  	
              Raleigh/Durham,
                NC(1)

            

       

      

       

      The
        in-service specialists will be responsible for:

       

      	·  	
              Helping
                LabCorp sales representatives attain factory sales quotas via the
                in-services and as a technical resource

            

       

      	·  	
              Strong
                and on-going customer service and establishing public confidence
                in the
                company and its products

            

       

      	·  	
              Attaining
                average number of in-services vs.
                objective

            

       

      	·  	
              Staying
                within targeted expense parameters

            

       

      	·  	
              Being
                a resource, as needed, for LabCorp reps during the duration of the
                contract

            

       

      

      This
        document identifies the cost and describes the services to be provided by
        Caswood for a 6-month pilot program. 

      

      The
        total
        estimated cost for 5 full-time in-service specialists during this 6-month
        period
        is $425,700. This amount includes salaries, benefits and expenses for the
        in-service sales team, recruiting, and project management. 

      

      The
        in-service specialists will be working exclusively for Vyteris and they will
        be
        Caswood employees (not independent contractors). 

      

      This
        Agreement reflects Caswood’s understanding of Vyteris’s needs.

       

      
        
          
          

        

        
          C-3

          
            

          

        

        
          
          

        

      

       

      Caswood
        Sales Force Project Cost Breakdown

      

      Included
        in Direct Field Expenses:

      

      	·  	
              Salaries
                and bonuses 

            

      	·  	
              Payroll
                and state taxes (unemployment/disability)

            

      	·  	
              Workers
                compensation

            

      	·  	
              Healthcare
                benefits

            

      	·  	
              401K

            

      	·  	
              Mileage,
                tolls, parking and car allowance

            

      	·  	
              Payroll
                fees and state fees

            

      	·  	
              Driving
                records (twice a year), drug tests, credit checks and professional
                reference checks

            

      	·  	
              Office
                supplies, business cards and forms

            

      	·  	
              Postage
                

            

      	·  	
              Employee
                handbook (updated annually and
                distributed)

            

      	·  	
              Recruitment
                and re-recruitment for vacancies, advertising expenses, contracts
                and
                letters of employment offer/termination to in-service
                specialists

            

      	·  	
              Training
                session with training team for replacement in-service specialists
                hired
                for the duration of the project

            

      	·  	
              WebEx
                sessions as needed (training purposes)

            

      	·  	
              Weekly/bi-weekly
                conference calls

            

      

      Included
        in Management/Administrative/Overhead Expenses:  

      

      	·  	
              Salary,
                benefits, and payroll taxes for home office management support team
                

            

      	·  	
              Executive
                Senior Management strategic planning (on going policies/issues and
                planning meetings)

            

      

      

      
        
          
          

        

        
          C-4

          
            

          

        

        
          
          

        

      

      

      Caswood
        Sales Force Project Cost Breakdown (Continued)

      

      	·  	
              HR
                manager/coordinator (responsible for HR issues, disciplinary actions
                and
                hiring policies)

            

      	·  	
              Sexual
                harassment training

            

      	·  	
              Financing/Accounting
                - including taxes by state and liability
                insurance

            

      

      Estimates
        of additional expenses to be billed at cost:

      

      	·  	
              Cost
                of training to be conducted at the initial training meeting (cost
                to be
                determined)

            

      	·  	
              Cost
                of travel, hotel and meals for sales team and Caswood team to attend
                training meetings (cost to be determined)

            

      

      Not
        included in the project budget:

      

      	·  	
              Cost
                of lunches and materials for in-service
                programs

            

      	·  	
              Cost
                of additional sales/training update meetings held throughout the
                year
                other than those specified as included in the project
                budget

            

      	·  	
              Cost
                of samples, promotional materials, detail aids, training materials
                or
                premiums

            

      	·  	
              Cost
                of shipping any of the above items to the in-service
                specialists

            

      	·  	
              Overnight
                travel expenses for the in-service
                specialists

            

      	·  	
              Cost
                of any year-end incentive program for the in-service specialists
                provided
                by Vyteris

            

      	·  	
              Cost
                of laptop computers and cell phones

            

      

      

      
        
          
          

        

        
          C-5

          
            

          

        

        
          
          

        

      

       

      Recruiting
        Program 

      

      Upon
        execution of a LOI, Caswood will begin the process of screening and selecting
        the in-service specialists. 

      

      Caswood
        will handle the initial recruitment and, if necessary, the re-recruitment
        to
        fill vacancies during the duration of the project. 

      

      Qualifications

      

      Final
        qualifications will be approved by Vyteris prior to the initiation of the
        recruitment phase for the in-service specialists.

      

      Recommended
        Profile for Vyteris In Service Specialists:

      

      	·  	
              Track
                record of success as a sales representative

            

      	·  	
              Prior
                experience serving as liaison with key
                accounts

            

      	·  	
              Education
                - B.S., B.A. degree

            

      	·  	
              Excellent
                communication and customer service skills

            

      	·  	
              No
                concurrent work arrangement

            

      	·  	
              Ability
                to grasp technical material and work independently
                

            

      

      The
        candidates for the in-service positions are selected as follows:

      

      	1.  	
              Selection
                of resumes to determine if they are qualified for the positions available.
                The selection includes screening over the telephone (following the
                guidelines that Caswood/Vyteris have
                developed).

            

      	2.  	
              Caswood
                managers will conduct the screening interviews and the face-to-face
                interviews. 

            

      	3.  	
              Caswood
                management will select the candidates. 

            

      	4.  	
              Caswood
                will make an offer to the candidate.

            

      

      

      
        
          
          

        

        
          C-6

          
            

          

        

        
          
          

        

      

       

      Training
        

      

      The
        initial training meeting (date and location to be determined) will focus
        on
        orientation to Vyteris, product training, Vyteris selling process, and market
        dynamics (e.g. reimbursement, supply chain, regulatory restrictions, etc.)
        that
        are unique to the sales/distribution of LidoSite. 

      All
        in-service specialists will also participate in a WebEx training session
        prior
        to the initial training meeting to cover administrative details as well as
        to
        review both the PhRMA guidelines and HR policies including training on sexual
        harassment. The cost of the initial training meeting has not been included
        in
        the budget and will be billed separately.

      

      This
        Agreement assumes that on-going training for new products/selling materials
        will
        be accomplished through a combination of WebEx meetings and home study. The
        budget also includes the training of new in-service specialists that are
        hired
        during the contract due to turnover (vacancy).

      

      

      
        
          
          

        

        
          C-7

          
            

          

        

        
          
          

        

      

      

      Incentive
        for In-Service Specialists

      

      The
        bonus
        plan should be designed as a key motivator for the in-service specialists.
        

      

      Caswood
        will work with Vyteris to develop the parameters of the incentive program
        keeping in mind that it is critical to have attainable and clear/easy to
        understand goals. Plus, the parameters and goals should be comparable to
        incentive programs in the industry.

      

      Sales
        Team Conversion Fees

      

      If
        Vyteris hires any in-service specialist during the first six months of this
        Agreement, the cost will be 25% of the annual base salary plus
        bonuses.

      

      If
        Vyteris hires any in-service specialist after the initial six months of the
        Agreement or within three months of the termination of the contract, the
        cost
        will be $10,000 per in-service specialist.

      

      Proposed
        Payment Structure

      

      Estimated
        cost of $425,700 for 5 full time in-service specialists for six
        months.

      

      The
        following payment will be due upon execution of LOI (Letter of Intent) or
        verbal
        agreement: $125,700. 

      

      The
        remaining amount of $300,000 will be paid in four equal installments of $75,000
        each. The due dates for each installment will coincide with the first four
        months of the project.

      

      

      
        
          
          

        

        
          C-8

          
            

          

        

        
          
          

        

      

       

      Term
        and Termination 

      

      This
        Agreement may be terminated at any time by either party upon sixty (60) days
        written notice. Vyteris may terminate this Agreement upon sixty (60) days
        written notice to Caswood for Caswood’s failure to perform the Services. Such
        notice to Caswood will describe in detail Caswood’s failure to perform. If
        within sixty (60) days of receipt of such notice from Vyteris, Caswood corrects
        its failure to perform the Services, then the Agreement shall continue in
        full
        force and effect. In the absence of termination, this Agreement shall continue
        for six (6) months with the option to extend the contract. The parties
        acknowledge that any extension of this Agreement will be upon such other
        terms
        and conditions acceptable to the parties. 

      

      Cancellation
        of the project and termination of this Agreement at any time after the date
        hereof and prior to the expiration of the term of the Agreement for any reason
        other than Caswood’s failure to perform the Services will entitle Caswood to (i)
        the full amount of payments already received (ii) any additional expenses
        not
        included in the estimated cost of the proposal, (iii) other fees and expenses
        incurred by Caswood prior to such termination, (iv) any scheduled payment
        due
        and payable within the 60 day notification period.

      

      

      

      Signatures

      

      ACCEPTED
        AND AGREED TO:

      

      
        	
                Vyteris,
                  Inc.

              	
                The
                  Caswood Group, Inc.

              
	 	 
	
                By:____________________

              	
                By:____________________

              
	 	 
	 	 
	
                Date:___________________

              	
                Date:___________________

              

      

      
 

      9

       

      C-9Exhibit 10.139

    
      

    

    Exhibit
      10.139

    

      DRAFT
        DATED JULY 31, 2007 

      

      Employment
        Agreement

       

      EMPLOYMENT
        AGREEMENT, effective
        as of August 1, 2007, between Vyteris, Inc. (f/k/a Vyteris Holdings (Nevada),
        Inc.), a Nevada corporation
        (the “Company”),
        and
        Anthony J. Cherichella (“Employee”).

      

      WHEREAS,
        the Company desires to employ Employee as Chief Financial Officer and principal
        accounting officer; and

      

      WHEREAS,
        Employee is willing to accept such employment on the terms set forth
        herein,

      

      NOW,
        THEREFORE, the Company and Employee hereby agree as follows:

      

      1.    Employment.

      

      1.1    General.
        The
        Company hereby agrees to employ Employee in the capacity of Chief Financial
        Officer and principal accounting officer, and Employee hereby accepts such
        employment, upon the terms and subject to the conditions herein contained;
        provided, however, that the Employee shall not assume the responsibilities
        of
        Chief Financial Officer and principal accounting officer for the purposes
        of the
        Company’s filings to be made with the Securities and Exchange Commission until
        August 15, 2007 (and until such time, Joseph Himy shall remain as the Company’s
        principal accounting officer). 

      

      1.2    Duties
        and Authority.
        During
        the term of Employee’s employment hereunder, Employee shall serve as the Chief
        Financial Officer and principal accounting officer of the Company and shall
        have
        such responsibilities, duties and authority as may, from time to time, be
        assigned to him by the Company’s Chief Executive Officer and Board of Directors
        (the “Board”).
        During the term of this Agreement, Employee shall serve the Company, faithfully
        and to the best of Employee’s ability, and shall devote substantially all of
        Employee’s business time and efforts to the business and affairs of the Company
        (including its subsidiaries and affiliates) and the promotion of its interests.
        Employee shall be available to the Company at such times and places as the
        Company shall reasonably request during the term hereof. Notwithstanding
        the
        foregoing, Employee shall be entitled to pursue charitable and religious
        endeavors and to participate in professional organizations, provided that
        such
        activities do not interfere in any material respect with the performance
        by
        Employee of his duties hereunder. 

      

      2.    Term
        of Employment.
        The
        term
        of this Agreement shall commence as of August 1, 2007, and shall continue
        through July 31, 2008. Thereafter, the term of this Agreement shall be
        automatically extended for successive and additional one-year periods, unless
        Employee or the Company shall provide a written notice of termination at
        least
        ninety (90) days prior to the end of the initial term or any
        extended term, as applicable. The term of this Agreement is subject to early
        termination in accordance with the provisions set forth in Section
        4
        hereof.
        The election by the Company or Employee to terminate this Agreement as of
        the
        expiration of the initial term, or as of the end of any one-year renewal
        period,
        as provided in this Section 2 shall not be deemed to be a termination by
        the
        Company under Sections 4.1.2
        or
4.1.3
        hereof
        or by Employee with Good Reason (as defined below), and in such event Employee
        shall only be entitled to the compensation set forth in Section
        4.2.3
        hereof

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          3.    Compensation
            and Benefits.

        

      

      

      3.1    Salary.
        During the
        first
        twelve months of the term of this Agreement, the Company shall pay to Employee
        a
        base salary at the annual rate of $-------265,000. On
        each
        anniversary date of the commencement of employment, the Employee’s base salary
        shall be reviewed by the Board (or the compensation committee thereof (the
        “Compensation
        Committee”))
        and
        may be increased to such rate as the Board (or the Compensation Committee),
        in
        its sole discretion, may hereafter from time to time determine. The salary
        payable pursuant to this Section
        3.1
        shall be
        payable on a bi-weekly basis and is referred to herein as the “Base
        Salary”.

      

      3.2    Expenses.
        Employee shall be entitled to receive proper reimbursement from the Company
        for
        all reasonable out-of-pocket expenses incurred by Employee in performing
        services under this Agreement, according to the Company’s expense account and
        reimbursement policies and provided that Employee shall submit reasonable
        documentation with respect to such expenses.

      

      3.4    Bonus. 

      

       
        (a)    During
        the term of this Agreement, Employee shall be entitled to receive an annual
        year-end target “Variable Bonus” in cash in an amount equal to up to forty
        percent (40%) of Base Salary (pro-rated for calendar year 2007). 

      

       
        (b)    Half
        of
        the Variable Bonus will be based upon successfully realizing the personal
        and
        performance objectives as determined by the Chief Executive Officer and the
        Compensation Committee, which for the first year of employment are defined
        in
Exhibit
        A-I
        attached
        to this Agreement (the “A-I
        Objectives”).

      

       
        (c)    Half
        of
        the Variable Bonus for the first year, and all of the Variable Bonus for
        any
        periods after the first year of employment, will be based upon successfully
        realizing the “KRA objectives” for each year as determined by the Company’s
        Chief Executive Officer and the Compensation Committee each year, and which
        are
        defined in Exhibit
        A-II
        attached
        to this Agreement for the first year of employment.

      

       
        (d)    The
        Variable Bonus, if any, shall be payable within ninety (90) days after the
        last
        day of the year in which it is earned, notwithstanding any termination of
        this
        Agreement on or after the last day of such year. Qualification for the Variable
        Bonus payout shall be determined by the Board.

       

      
        
          
          

        

        
          -
            2
            -

          
            

          

        

        
          
          

        

      

       

      3.5    Stock
        Options.
        

      

       
        3.5.1 The Company hereby grants to the Employee options to purchase 750,000
        shares of the Company’s common stock, vesting as described on Exhibit
        B.

      

       
        3.5.2 The options shall be issued pursuant to the Company’s 2005 Stock Option
        Plan; shall only be issued if approved by the Compensation Committee prior
        to
        grant; have an exercise price equal to the fair market value of one share
        of the
        Company’s common stock as determined by the Compensation Committee upon grant;
        and shall become fully vested and exercisable upon the sale of all or
        substantially all of the assets of the Company, the sale of all of the capital
        stock of the Company by the Company’s stockholders to a third party, or the
        merger or consolidation of the Company with another corporation or other
        entity
        (other than a merger or consolidation in which the owners of the Company’s
        capital stock immediately prior to the merger or consolidation own at least
        35%
        of the capital stock of the surviving corporation or other entity in the
        merger
        or consolidation).

      

       
        3.5.3 The
        Compensation Committee shall consider an additional grant of stock options
        no
        less than once each year (by March 31st
        of each
        year commencing in 2008) (and shall target the grant of at least 750,000
        options
        (as adjusted for stock splits or stock combinations) each year). 

      

      3.6    Other
        Benefits.
        Employee
        shall be entitled to the following additional benefits:

      

       
        3.6.1 Employee
        shall be entitled to vacations, at such times as Employee shall reasonably
        determine, of at least four weeks each year of employment
        hereunder.

      

       
        3.6.2 Employee
        shall be entitled to such other benefits as shall be extended to any other
        senior executive officer of the Company during the initial term and any renewal
        period of this Agreement.

      

      3.7    No
        Other Benefits.
        During
        the term of this Agreement or upon any termination hereof, the Company shall
        have no obligation to pay or provide, any compensation or benefits other
        than as
        set forth herein; provided,
        however,
        that
        Employee shall be entitled to all benefits available to senior Employees
        of the
        Company under the employee benefit plans, and the policies and practices,
        of the
        Company, determined in accordance with the applicable terms and provisions
        of
        such plans, policies and practices, in each case, as accrued to the date
        of
        termination of employment.

      

      
        
          
          

        

        
          -
            3
            -

          
            

          

        

        
          
          

        

      

       

      
        
          4.0    Termination
            of Employment.

        

      

      

      4.1    Events
        of Termination.
        Employee’s
        employment hereunder shall terminate prior to the expiration of the term
        set
        forth in Section
        2
        hereof
        upon the occurrence of any one or more of the following events:

      

       
        4.1.1 Death.
        In
        the
        event of Employee’s death, Employee’s employment shall terminate on the date of
        death.

      

        4.1.2 Termination
        by the Company for Cause.
        The
        Company may,
        at
        its option, terminate the Employee’s employment for “Cause” (as defined herein).
        For purposes hereof, “Cause”
shall
        mean Employee’s (i) conviction of, guilty plea to or confession of guilt of a
        felony, (ii) commission of fraudulent, illegal or dishonest acts, (iii) willful
        misconduct or gross negligence which reasonably could be expected to be
        materially injurious to the business, operations or reputation of the Company
        (monetarily or otherwise) or (iv) after a written warning and a reasonable
        opportunity to cure non-performance, failure to perform Employee’s material
        duties as assigned to Employee pursuant to the terms of this Agreement from
        time
        to time or failure to cure any other material breach of this
        Agreement.

      

       
        4.1.3 Without
        Cause By The Company.
        The
        Company may, at its option, terminate Employee’s employment for any reason
        whatsoever (other than for Cause) by giving ninety (90) days prior written
        notice of termination to Employee.

      

       
        4.1.4 Termination
        by Employee.
        Employee
        may terminate Employee’s employment for any reason whatsoever by giving ninety
        (90) days prior notice of termination to the Company, except that Employee
        may
        terminate Employee’s employment for Good Reason by giving fifteen (15) days
        prior notice of termination. Employee shall be deemed to have terminated
        employment hereunder for “Good
        Reason”
in
        the
        event that Employee terminates such employment after (i) the Company has
        breached any of its material obligations hereunder and fails to cure such
        breach
        promptly after receipt of written notice of such breach, or (ii) a Change
        in
        Control (as defined herein). For purposes of this Agreement, the term
“Change
        in Control”
shall
        mean the occurrence of any of the following events with respect to the
        Company:

      

      (A)    the
        consummation of any consolidation or merger of the Company in which the Company
        is not the continuing or surviving corporation or pursuant to which shares
        of
        the Company’s common stock (“Common
        Stock”)
        would
        be converted into cash, securities or other property, other than a merger
        of the
        Company in which the holders of the shares of the Company’s Common Stock
        immediately prior to the merger own at least a majority of the outstanding
        common stock of the surviving corporation immediately after the merger;
        or

      

      (B)    the
        consummation of any sale, lease, exchange or other transfer (in one transaction
        or a series of related transactions) of all, or substantially all, of the
        assets
        of the Company, other than to a subsidiary or affiliate.

       

      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      

       

       
        4.1.5 Disability.
        In the
        event of Employee’s Disability (as defined herein), the Company will have the
        option to terminate Employee’s employment by giving a written notice of
        termination to Employee. Such notice shall specify the date of termination,
        which date shall not be earlier than sixty (60) days after such notice is
        given.
        For purposes of this Agreement, “Disability”
means
        the inability of Employee to substantially perform Employee’s duties hereunder
        for one hundred and thirty five (135) days out of two hundred and twenty
        five
        (225) consecutive days as a result of a physical or mental illness, all as
        determined in good faith by the Board.

      

      4.2    Company’s
        Obligations Upon Termination.
        Following
        the termination
        of Employee’s employment under the circumstances described below, the Company
        shall pay to Employee the following compensation and provide the following
        benefits in full satisfaction and final settlement of any and all claims
        and
        demands that Employee now has or hereafter may have under this
        Agreement:

      

       
        4.2.1 Termination
        Without Cause by the Company or by the Employee with Good
        Reason.
        In
        the
        event that Employee’s employment shall be terminated by the Company pursuant to
Section
        4.1.3
        or shall
        be terminated by the Employee for
        Good Reason
        pursuant
        to Section
        4.1.4,
        (a) the
        Company shall pay Employee all Base Salary,
        any
        Variable Bonus, earned but unpaid through the date of termination,
        (b) the
        Company shall pay Employee twelve (12) months
        Base Salary then in effect on a monthly basis (provided,
        however,
        that if
        such termination is effective before April 30, 2008, the number of months
        of
        Base Salary payable as severance pursuant to this clause (b) shall be equal
        to
        the number of full months that Employee was employed by the Company before
        being
        terminated (which would be less than nine (9) months), rather than twelve
        (12)
        months), (c) all stock options granted to Employee by the Company shall remain
        exercisable for a period of one
        hundred and eighty days after
        such termination,
        and (d)
        a pro-rated target Variable Bonus for the year in which termination is
        effective, subject to the terms of such bonus. In
        addition, the Company shall reimburse Employee for any expenses incurred
        through
        the date of such termination in accordance with Section
        3.3
        hereof

      

       
        4.2.2 Termination
        by Employee Without Good Reason or by the Company for
        Cause.
        In
        the
        event that Employee’s employment shall be terminated by Employee without
        Good Reason
        pursuant
        to Section
        4.1.4
        (or if
        Employee voluntarily resigns other
        than with Good Reason
        in
        accordance with such Section prior to the expiration of the then current
        term of
        this Agreement) or by the Company pursuant to Section
        4.1.2,
        Employee shall be entitled to no further compensation or other benefits under
        this Agreement other than any Base Salary and any Variable Bonus earned on
        or
        prior to the date of such termination, but not yet paid, and such benefits
        as
        have accrued pursuant to any applicable employee benefit plans of the Company.
        In addition, the Company shall reimburse Employee for any expenses incurred
        through the date of such termination in accordance with Section
        3.3
        hereof

       

      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

      

       

       
        4.2.3 Termination
        upon Expiration of the
        Employment Term.
        Upon
        expiration of the term of this Agreement, Employee shall be entitled to no
        further compensation or other benefits under this Agreement other than Base
        Salary earned, but unpaid, through the date of termination, and any Variable
        Bonus earned on or prior to the end of such term, but not yet paid and such
        benefits as have accrued pursuant to any applicable employee benefit plans
        of
        the Company. In addition, the Company shall reimburse Employee for any expenses
        incurred through the date of such termination in accordance with Section
        3.3
        hereof.

      

       
        4.2.4 Termination
        Due to Death.
        In
        the
        event that Employee’s employment shall be terminated by the Company pursuant to
Section
        4.1.1,
        the
        Company shall pay Employee or Employee’s estate (a) all Base Salary earned but
        unpaid through the date of termination, and (b) any
        Variable
        Bonus earned on or prior to the date of termination, but not yet paid. In
        addition, the Company shall reimburse Employee for any expenses incurred
        through
        the date of termination in accordance with Section
        3.3
        hereof

      

       
        4.2.5 Termination
        Due to Disability.
        In
        the
        event that Employee’s
        employment shall be terminated by the Company pursuant to Section
        4.1.5,
        (a) the
        Company shall pay Employee all Base Salary earned but unpaid through the
        date of
        termination, (b) any
        Variable Bonus earned on or prior to the date of termination, but not yet
        paid, and
        (c)
        the
        Employee shall be entitled to all benefits under all employee benefit plans
        in
        which he is a participant. In addition, the Company shall reimburse Employee
        for
        any expenses incurred through the date of termination in accordance with
        Section
        3.3
        hereof

      

      4.3    Nature
        of Payments.
        All
        amounts to be paid by the Company to Employee pursuant to this Section
        4
        (other
        than Base Salary or reimbursement of expenses or amounts paid pursuant to
        Section
        4.2.4)
        shall
        be considered by the parties to be severance payments. In the event that
        such
        payments shall be treated as damages, it is expressly acknowledged by the
        parties that damages to Employee for termination of employment would be
        difficult to ascertain and the above amounts are reasonable estimates thereof
        and are not a penalty.

      

      4.4  
Release.
        Any
        payments to be made or benefits to be provided by the Company pursuant to
        this
Article
        4
        shall be
        subject to the Company’s receipt from Employee of an effective general release
        and agreement not to sue, in a written form reasonably satisfactory to the
        Company (the “Release”),
        pursuant to which Employee makes limited customary representations and
        warranties relating to the validity, enforceability and binding nature of
        such
        release and that Employee has the right to enter into and give such release
        and
        Employee agrees (i) to release all claims against the Company, its subsidiaries
        and affiliates and related parties, (ii) not to maintain any action, suit,
        claim
        or proceeding against the Company and the officers, directors, and successors
        thereof, solely with respect to the matters released, and (iii) to be bound
        by
        the confidentiality and mutual nondisparagement covenants specified therein.
        Notwithstanding anything to the contrary contained herein, Employee’s release
        shall expressly not apply to any claims Employee may have as a stockholder
        or
        option holder of the Company. Notwithstanding the due date of any payment
        hereunder requiring a Release, the Company shall not be obligated to make
        any
        such payment until after the expiration of any revocation period applicable
        to
        the Release.

       

      
        
          
          

        

        
          -
            6
            -

          
            

          

        

        
          
          

        

      

      
 

      5.    Non-Solicitation:
        Noncompetition.

      

      5.1    
During
        the term of this Agreement and for a period of one year thereafter (following
        termination for any reason, subject to the provisions of Section
        5.2),
        Employee
        shall not:

      

       
        5.1.1 induce
        or
        attempt to induce, directly or indirectly, any then current customer or client
        of the Company to cease doing business, in whole or in part, with the Company
        or
        solicit or divert, directly or indirectly, the business of any such customer
        or
        client, or any identified potential customer or client, for Employee’s own
        account or for the account of any other person or entity;

       

       
        5.1.2 solicit
        or induce, directly or indirectly, any person or entity, including any
        third-party service provider, distributor or supplier of the Company, to
        terminate its relationship with the Company or otherwise interfere with such
        relationship;

      

       
        5.1.3 for
        Employee’s own account or for the account of any other person or entity,
        solicit, interfere with or endeavor to cause, directly or indirectly, any
        employee or agent of the Company or induce or attempt to induce, directly
        or
        indirectly, any employee or agent of the Company to leave employment or
        terminate its agency with the Company or induce or attempt to induce, directly
        or indirectly, any such employee or agent to breach an employment or agency
        agreement or arrangement with the Company; or

      

       
        5.1.4 except
        with respect to a less than 5% passive ownership interest in a publicly traded
        company, either
        for Employee or on behalf of any person or entity, directly or indirectly
        own,
        control or participate in the ownership or control of, or be employed by
        or on
        behalf of, any business which is similar to and is competitive with the
        business
        (as it
        exists or the date of termination)
        of the
        Company, within the United States of America or any country in which the
        Company
        then conducts or proposes to conduct business, without the express written
        consent of the Company.

      

      5.2    Notwithstanding
        any
        provision hereunder to the contrary, the provisions of Sections
        5.1.1,
        5.1.2
        and
5.1.4
        shall
        not apply following the termination of Employee’s employment by the Company
        without Cause pursuant to Section
        4.1.3
        or by
        Employee for
        Good Reason
        pursuant
        to Section
        4.1.4.

      

      
        
          
          

        

        
          -
            7
            -

          
            

          

        

        
          
          

        

      

      

      6.    Property
        Rights.
        With
        respect to information, inventions and discoveries developed, made or conceived
        of by Employee, either alone or with others, at any time during Employee’s
        employment by the Company and whether or not within working hours, arising
        out
        of such employment or pertinent to any field of business or research in which,
        during such employment, the Company is engaged or (if such is known to or
        ascertainable by Employee) is considering engaging, Employee
        agrees:

      

      6.1    that
        all
        such information, inventions and discoveries, whether or not patented or
        patentable, shall be and remain the exclusive property of the
        Company;

      

      6.2    to
        disclose promptly to an authorized representative of the Company all
        such
        information in Employee’s possession as to possible applications and uses
        thereof;

      

      6.3    not
        to
        file any patent application relating to any such invention or discovery except
        with the prior written consent of an authorized officer of the
        Company;

      

      6.4    that
        Employee hereby waives and releases any and all rights Employee may have
        in and
        to such information, inventions and discoveries and hereby assigns to the
        Company and/or its nominees all of Employee’s right, title and interest in them,
        and all Employee’s right, title and interest in any patent, patent application,
        copyright or other property right based thereon. Employee hereby irrevocably
        designates and appoints the Company and each of its duly authorized officers
        and
        agents as Employee’s agent and attorney-in-fact to act for Employee and in
        Employee’s behalf and stead to execute and file any document and to do all other
        lawfully permitted acts to further the prosecution, issuance and enforcement
        of
        any such patent, patent application, copyright or other property right with
        the
        same force and effect as if executed and delivered by Employee; and

      

      6.5    at
        the
        request of the Company and without expense to Employee, to execute such
        documents and perform such other acts as the Company deems necessary or
        appropriate for the Company to obtain patents on such inventions in a
        jurisdiction or jurisdictions designated by the Company, and to assign to
        the
        Company or its designee such inventions and any patent applications and patents
        relating thereto.

      

      7.    Confidentiality.
        With
        respect to the information, inventions and discoveries referred to in
Section
        6
        hereof,
        and also with respect to all other information, whatever its nature and form
        and
        whether obtained orally, by observation, from graphic materials or otherwise
        (except such as is generally available to the public or such as Employee
        shall
        be compelled by legal process to disclose), obtained by Employee during or
        as a
        result of Employee’s employment by the Company and relating to any invention,
        improvement, enhancement, product, know-how, formula, software, process,
        apparatus, design, concept or other creation of the Company, or to any use
        of
        any of them, or to materials, tolerances, specifications, costs (including,
        without limitation, manufacturing costs), prices, or any plans of the Company,
        or to any other trade secret or proprietary information of the Company, Employee
        agrees:

       

      
        
          
          

        

        
          -
            8
            -

          
            

          

        

        
          
          

        

      

      
 

      7.1    to
        hold
        all such information, inventions and discoveries in strict confidence and
        not to
        publish or otherwise disclose any thereof to any person or entity other than
        the
        Company, except with the prior written consent of an authorized officer of
        the
        Company;

      

      7.2    to
        take
        all reasonable precautions to assure that all such information, inventions
        and
        discoveries are properly protected from access by unauthorized
        persons;

      

      7.3    to
        make
        no use of nor exploit in any way any such information, invention or discovery
        except as required in the performance of Employee’s employment duties for the
        Company; and

      

      7.4    upon
        termination of Employee’s employment by the Company, or at any time upon request
        of the Company, to deliver to it all graphic materials and all substances,
        models, software, prototypes and the like containing or relating to any such
        information, invention or discovery, all of which graphic materials and other
        things shall be and remain the exclusive property of the Company.

      

      For
        purposes of this Agreement, the term “graphic materials” includes, without
        limitation, letters, memoranda, reports, notes, notebooks, books of account,
        drawings, prints, specifications, formulae software, data print-outs,
        microfilms, magnetic tapes and disks and other documents and recordings,
        together with all copies, excerpts and summaries thereof

      

      8.    No
        Conflicts.
        Employee agrees and acknowledges that Employee’s employment by the Company and
        compliance with this Agreement do not and will not breach any agreement made
        by
        Employee to keep in confidence information acquired by Employee prior to
        or
        outside of Employee’s employment with the Company. Employee will comply with any
        and all valid obligations which Employee may now have to prior employers
        or to
        others relating to confidential information, inventions or discoveries which
        are
        the property of those prior employers or others, as the case may be. Employee
        has supplied or shall promptly supply to the Company upon its request a copy
        of
        each written agreement setting forth any such obligation. Employee hereby
        agrees
        and acknowledges that Employee has not brought and will not bring with Employee
        for use in the performance of duties at the Company any materials, documents
        or
        information of a former employer or any third party that are not generally
        available to the public, unless Employee has express written authorization
        from
        the owner thereof for possession and use or Employee otherwise has undisputed
        proprietary rights to such material documents or information.

      

      9.    Specific
        Performance.
        Without
        intending to limit the remedies available to the Company, Employee agrees
        that
        damages at law would be an inadequate remedy to the Company in the event
        that
        Employee shall breach or attempt to breach any of the provisions of Sections
        5, 6, 7, 8
        or
9
        hereof
        and that the Company may apply for and, without the posting of any bond or
        other
        security, upon proof of breach or threatened breach of any of the covenants
        contained in such Sections, have injunctive relief in any court of competent
        jurisdiction to restrain the breach or threatened breach of, or otherwise
        to
        enforce specifically, any of the covenants contained in such Sections. Such
        injunctive relief in such court shall be available to the Company in lieu
        of any
        arbitration proceeding pursuant to Section
        11
        hereof

       

      
        
          
          

        

        
          -
            9
            -

          
            

          

        

        
          
          

        

      

       

      10.    Survival.
        The provisions
        of Sections 5,
        6,
        7, 8, 9, 10, 11,
        and
12
        shall
        survive any termination of this Agreement. In furtherance and not in limitation
        of the preceding sentence,
        Employee’s obligations under Sections
        5, 6
        and
        7
        hereof
        shall remain in effect throughout Employee’s employment by the Company,
        unaffected by any transfer to a subsidiary or affiliate of the
        Company.

      

      11.    Arbitration.
        Any
        controversy or claim based on, arising out of or relating to the interpretation
        and performance of this Agreement or any termination hereof shall be solely
        and
        finally settled by arbitration under the rules of the American Arbitration
        Association, and judgment on the award rendered in the arbitration may be
        entered in any court having jurisdiction thereof. Any such arbitration shall
        be
        in the State of New Jersey, and shall be submitted to a single arbitrator
        appointed by the mutual consent of the parties or, in the absence of such
        consent, by application of any party to the American Arbitration Association.
        A
        decision of the arbitrator shall be final and binding upon the parties, and
        the
        arbitrator shall be authorized to apportion fees and expenses (including
        counsel
        fees and expenses) as the arbitrator shall deem appropriate. In the absence
        of
        any such apportionment, the fees and expenses of the arbitrator shall be
        borne
        equally by each party, and each party will bear the fee and expenses of its
        own
        attorney. The parties agree that this clause has been included to rapidly
        and
        inexpensively resolve any disputes between them with respect to this Agreement
        and that this clause shall be grounds for dismissal of any court action
        commenced by either party with respect to this Agreement, other than (i)
        post-arbitration actions seeking to enforce an arbitration award and (ii)
        actions seeking appropriate equitable or injunctive relief pursuant to Sections
        5, 6 and/or 7 hereof

      

      
        
          12.    Miscellaneous.

        

      

      

      12.1   Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New Jersey without regard to principles of conflicts of
        laws.

      

      12.2   Entire
        Agreement; Amendment.
        This
        Agreement and the exhibits annexed hereto between the Company and Employee
        contain the complete understanding and agreement between the parties hereto
        with
        respect to the subject matter hereof, and supersede all prior understandings
        and
        agreements, written or oral, between the parties hereto relating to the subject
        matter hereof This Agreement may not be amended or modified except in a writing
        signed by the parties hereto.

       

      
        
          
          

        

        
          -
            10
            -

          
            

          

        

        
          
          

        

      

       

      12.3   Severability.
        In the
        event that any provision or portion of this Agreement shall be determined
        to be
        invalid or unenforceable for any reason, in whole or in part, (i) the remaining
        provisions of this Agreement shall be unaffected thereby and shall remain
        in
        full force and effect to the fullest extent permitted by law and (ii) any
        such
        invalidity or unenforceability shall be deemed replaced by a term or provision
        determined by the parties as coming closest to expressing the intention of
        the
        invalid or unenforceable term or provision.

      

      12.4   Notice.
        Any
        notice to be given hereunder shall be in writing and either delivered in
        person,
        by nationally recognized overnight courier, by facsimile or by registered
        or
        certified first class mail, postage prepaid with return receipt requested,
        addressed (a) if to the Company, to Vyteris, Inc., 13-01 Pollitt Drive, Fair
        Lawn, NJ 07419, attention: Chief Executive Officer, and with a copy to
        Lowenstein Sandler PC, 65 Livingston Avenue, Roseland, New Jersey 07068
        Facsimile No.:(973) 597-2351, attention Peter H. Ehrenberg, Esq. and (b)
        if to
        the Employee, to Anthony
        J. Cherichella,
        17
        Brookwood Road, Montville Township, Towaco, New Jersey 07082. Notices
        delivered personally shall be deemed given as of actual receipt; notices
        sent
        via facsimile transmission shall be deemed given as of one business day
        following sender’s receipt from sender’s facsimile machine of written
        confirmation of transmission thereof, notices sent by overnight courier shall
        be
        deemed given as of one business day following sending; and notices mailed
        shall
        be deemed given as of five business days after proper mailing. Any party
        may
        change its address in a notice given to the other party in accordance with
        this
Section
        12.4.

      

      12.5   Successors
        and Assigns.
        This
        Agreement shall be binding upon and inure to the benefit of the parties hereto
        and their respective heirs, legal representatives, successors (including,
        without limitation, any successor by merger or sale of all or substantially
        all
        assets) and permitted assigns.

      

      12.6   Further
        Assurances.
        Employee and the Company shall execute and deliver all instruments and other
        documents which, in the opinion of the Company or the Employee, may be necessary
        or appropriate to carry out the terms of this Agreement.

      

      12.7   Deadlines.
        The
        Section headings in this Agreement are for convenience of reference only
        and
        shall not affect its interpretation.

      

      12.8   Interpretation.
        For
        purposes of
        Sections 5, 6, 7, 8
        and
9,
        the
“Company”
shall
        include any subsidiary or affiliate of the Company for which Employee renders
        services.

      

      12.9   Counterparts.
        This
        Agreement may be executed in counterparts, each of which shall be deemed
        an
        original but all of which taken together shall constitute one and the same
        agreement.

      
        
          
          

        

        
          -
            11
            -

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, this
        Agreement has been executed and delivered by the parties hereto as of the
        date
        first above written.

      

      

      
        	
                /s/
                  Anthony J. Cherichella

              	 	 
	 	
                Anthony
                  J. Cherichella

              	 	 

      

      

       

      VYTERIS,
        INC.

       

      
        	By:	
                /s/
                  Timothy
                  McIntyre

              	 	 
	 	
                Name: Timothy
                  McIntyre

              	 	 
	 	
                Title: Chief
                  Executive Officer

              	 	 

      

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          -
            12
            -

          
            

          

        

        
          
          

        

      

      Exhibit
        A-I

      

      PERSONAL
        AND COMPANY PERFORMANCE OBJECTIVES FOR VARIABLE BONUS

      

      * 10%
        of
        entire Variable Bonus (4% of Base Salary) for completion of due diligence
        with
        respect to the acquisition of Lehigh Valley Technologies (LVT) and final
        resolution/execution of LVT acquisition as outlined in term sheet or as directed
        by the Board.

      

      * 20%
        of
        entire Variable Bonus (because this can only be earned, if at all, during
        calendar year 2007, the greater of 8% of Base Salary or $25,000) based upon
        the
        Company consummating a public offering of equity securities which results
        in net
        proceeds to the Company (net of underwriters’ discount) of at least $25 million,
        in a firm commitment underwriting led by an institutional securities
        underwriter, by October 1, 2007.

      

      * 20%
        of
        entire Variable Bonus (because this can only be earned, if at all, during
        calendar year 2007, the greater of 8% of Base Salary or $25,000) based upon
        the
        Company successfully listing its common stock for trading on either the American
        Stock Exchange (AMEX) or the Nasdaq Global Market, by December 31,
        2007.

      

      

      Exhibit
        A-II

      

      KRA
        OBJECTIVES FOR VARIABLE BONUS

      

      	·  	
              12.5%
                of entire Variable Bonus (5% of Base Salary) -- upgrade of information
                technology department to Chief Executive Officer’s
                satisfaction.

            

      	o  	
              Plan
                by October 1, 2007

            

      	o  	
              Upgrade
                Completed by December 15, 2007

            

      

       

      	·  	
              12.5%
                of entire Variable Bonus (5% of Base Salary) - to lead, supervise,
                and
                execute securing a “second” level of key suppliers by November 1,
                2007.

            

       

      	o  	
              ID/Plan
                and budget impact - October 1, 2007

            

       

      	o  	
              Securing
                second line - January 1, 2008 

            

       

      	·  	
              12.5%
                of entire Variable Bonus (5% of Base Salary) -- formal 2008 budget
                review
                process, completed to Chief Executive Officer’s satisfaction by October
                31, 2007 and Board approved by December 15,
                2007.

            

      

      	·  	
              12.5%
                of entire Variable Bonus (5% of Base Salary) -- mentoring and development
                of Joseph Himy, to Chief Executive Officer’s satisfaction with Quarterly
                Reviews and subsequent filing with
                HR.

            

      
        
          
          

        

        
          -
            13
            -

          
            

          

        

        
          
          

        

      

      Exhibit
        B

      

      OPTION
        VESTING

      

      

      
        	 	
                Milestones

              	
                Shares

              
	 	 	 
	
                1.

              	
                Prior
                  to October 1, 2007, the Company engages institutional underwriter
                  of
                  national reputation to manage a public offering of equity
                  securities.

              	
                100,000

              
	 	 	 
	
                2.

              	
                Prior
                  to December 31, 2007, the Company successfully lists its common
                  stock for
                  trading on either the American Stock Exchange (AMEX) or the Nasdaq
                  Global
                  Market

              	
                150,000

              
	 	 	 
	
                3.

              	
                Prior
                  to April 1, 2008, the Company consummate a public offering of equity
                  securities which results in gross proceeds to the Company of at
                  least $25
                  million, in a firm commitment underwriting led by an institutional
                  securities underwriter.

              	
                100,000

              
	 	 	 
	
                4.

              	
                Prior
                  to April 1, 2008, the Company consummate a public offering of equity
                  securities which results in gross proceeds to the Company of at
                  least $35
                  million, in a firm commitment underwriting led by an institutional
                  securities underwriter.

              	
                150,000

              
	 	 	 
	
                5.

              	
                Prior
                  to April 1, 2008, the Company consummate a public offering of equity
                  securities which results in gross proceeds to the Company of at
                  least $50
                  million, in a firm commitment underwriting led by an institutional
                  securities underwriter.

              	
                200,000

              
	 	 	 
	
                6.

              	
                50,000
                  options that vest over time as follows - 25,000 options vest upon
                  Employee’s first anniversary of employment with the Company (so long as
                  he
                  is then an employee of the Company) and 6,250 options vesting on
                  the last
                  day of each of the four calendar quarters commencing with September
                  30,
                  2008 (again, so long as he is then an employee of the Company)
                  

              	
                50,000

              
	 	 	 
	 	 	
                750,000

              

      

      
-
        14
        -

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