Document:

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[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [*], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

                 LICENSE, DEVELOPMENT AND DISTRIBUTION AGREEMENT

                THIS LICENSE, DEVELOPMENT AND DISTRIBUTION AGREEMENT is made
and entered into this 20th day of September, 2002, by and between VYTERIS, INC.
("VYTERIS"), a Delaware corporation, and B. BRAUN MEDICAL INC. ("B. ------- ---
Braun"), a Pennsylvania corporation.

                                   BACKGROUND

                A.      Vyteris is engaged in the business of, among other
things, the manufacture and development of novel transdermal drug delivery
systems.

                B.      (i) Vyteris is the owner or licensee of certain patent
and related intellectual property rights that pertain to, among other things, a
transdermal lidocaine delivery system and possesses the manufacturing facilities
to produce such transdermal lidocaine delivery system; and (ii) B. Braun
possesses the facilities and ability to distribute such transdermal lidocaine
delivery system.

                C.      B. Braun desires to obtain from Vyteris, and Vyteris
desires to grant to B. Braun, exclusive worldwide distribution rights and
certain license rights to (i) use the patent and related intellectual property
rights pertaining to such transdermal lidocaine delivery system, and (ii)
market, sell and distribute such transdermal lidocaine delivery system, all of
the foregoing on the terms and subject to the conditions contained in this
Agreement.

                              TERMS AND CONDITIONS

                NOW, THEREFORE, in consideration of the premises and covenants
contained herein, and intending to be legally bound, it is hereby agreed as
follows:

                SECTION 1. GENERAL PROVISIONS; DEFINITIONS.

                1.1 INTERPRETATIONS OF AGREEMENT. Unless expressly provided
otherwise in this Agreement or unless the context requires otherwise:

                (a)     This Agreement has been jointly negotiated by the
parties and is to be interpreted according to its fair meaning as if the parties
had prepared it together and not strictly for or against either party.

                (b)     The gender includes the neuter, feminine and masculine
and the number includes the singular and the plural.

                (c)     Any references to parties, Sections, Exhibits or
Schedules shall be to the parties hereto and the relevant Sections, Exhibits or
Schedules of this Agreement, as appropriate.

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                (d)     The word "OR" is inclusive and shall also mean "AND."

                (e)     The words "HEREIN," "HEREOF" and "HEREUNDER" and other
words of similar import refer to this Agreement as a whole and not to any
particular Section of this Agreement.

                (f)     The words "INCLUDES" and "INCLUDING" shall mean by way
of example and not by way of limitation.

                (g)     References in this Agreement to provisions of this
Agreement refer to the terms, conditions and covenants contained in this
Agreement taken as a whole.

                1.2 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings hereinafter set forth in this Section 1.2:

                        "ADR" shall mean, collectively, the regulations
pertaining to the postmarketing reporting of adverse drug experiences codified
in Title 21, Section 314.80 of the CFR.

                        "AFFILIATE" shall mean, with respect to any applicable
Person, any Person which is, directly or indirectly owned, controlled by, under
common control with, or controlling such Person.

                        "AGENCY" and "AGENCIES" shall mean, individually or
collectively, as appropriate, any applicable governmental regulatory authority
or all applicable governmental regulatory authorities involved in regulating or
granting approval or clearance for the manufacture, marketing, sale and/or
distribution of the Products (including, without limitation, the FDA).

                        "AGREEMENT" shall mean this License, Development and
Distribution Agreement, together with all Exhibits hereto, and any amendments,
restatements, modifications or supplements hereof or hereto.

                        "AVERAGE SELLING PRICE" shall mean for and with respect
to any applicable Measurement Period, the average price at which the disposable
iontophoretic patch Products described in EXHIBIT 1.2(H) is sold by B. Braun and
its Affiliates to end user customers in the USA Territory.

                        "BANKRUPTCY CODE" shall mean the United States
Bankruptcy Code, Title 11 of the United States Code, as amended, or any
successor law thereto, and any rules promulgated in connection therewith.

                        "BBM AG" shall mean B. Braun Melsungen AG, the parent
company of B. Braun.

                        "B. BRAUN" shall have the meaning ascribed to it in the
heading of this Agreement.

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                        "B. BRAUN NET SALES REPORT" shall have the meaning
ascribed to it in Section 3.5(b) hereof.

                        "B. BRAUN PARTIES" shall have the meaning ascribed to it
in Section 6.1(b) hereof.

                        "B. BRAUN REVENUE SHARE PAYMENT" shall have the meaning
ascribed to it in Section 3.5(a) hereof.

                        "B. BRAUN REVENUE SHARE PERCENTAGE" shall mean: (i)
sixty percent (60%) for the first and second Contract Year; and (ii) fifty
percent (50%) for subsequent Contract Years.

                        "B. BRAUN REVENUE SHARE PERCENTAGE ADJUSTMENT" shall
mean have the meaning assigned to it in Section 3.5(e) hereof.

                        "BD&C" shall mean Becton, Dickinson and Company, a New
Jersey corporation, from which Vyteris has been granted the License Rights.

                        "BD&C LICENSE AGREEMENT" shall mean the Transaction
Agreement dated as of November 10, 2000 among BD&C, Spencer Trask Specialty
Group, LLC, Spencer Trask Ventures, Inc. and Vyteris, as licensee, pursuant to
which BD&C granted the License Rights to Vyteris.

                        "CFR" shall mean the Code of Federal Regulations, as in
effect from time to time.

                        "CGMP" shall mean current good manufacturing practice
for finished pharmaceuticals as set forth in Title 21, Parts 210 and 211 of the
CFR.

                        "CHANGE IN CONTROL TRANSACTION" shall mean, with respect
to Vyteris, the occurrence of any of the following events: (i) a merger,
consolidation or other reorganization involving Vyteris or its parent in which
Vyteris or its parent, as the case may be, is not the surviving entity; (ii) the
occurrence of a Liquidity Event; (iii) any Person or "GROUP" (as such terms are
defined in Sections 13(d) and 14(d) of the Exchange Act) becomes the "BENEFICIAL
OWNER" (as defined in Rule 13d-5 under the Exchange Act, except that a person
shall be deemed to have "BENEFICIAL OWNERSHIP" of all securities that such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than fifty
percent (50%) of the total voting power of the issued and outstanding voting
capital stock of Vyteris normally entitled to vote in the election of directors
of Vyteris; (iv) during any consecutive two (2) year period, individuals who at
the beginning of such period constituted the Board of Directors of Vyteris
(together with any new directors whose election by the stockholders of Vyteris
was approved by a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of Vyteris then in office; or (v) a sale,
exchange, transfer or other disposition, whether voluntary or involuntary, to
another Person of all or substantially all (A) the assets of Vyteris or (B) the
assets relating to the manufacture, marketing, sale or distribution of the

                                       -3-
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Products; PROVIDED, HOWEVER, for purposes of clause (v) of this definition,
"sale, exchange, transfer or other disposition" shall not include (1) the
Permitted Encumbrance, or (2) the granting by Vyteris of a lien, security
interest, pledge or other encumbrance in favor of a bona-fide lender as security
for indebtedness for borrowed money of Vyteris to such lender so long as Vyteris
complies with the provisions of Section 2.2(a)(ix) hereof.

                        "CLAIM" shall have the meaning ascribed to it in Section
6.1(b) hereof.

                        "COMMERCIAL START DATE" shall mean the first to occur
of: (a) the date of the first commercial sale of the Product by B. Braun or its
Affiliates to a third party in the USA Territory for commercial use with humans;
or (b) ninety (90) days after (i) Vyteris has the obtained the necessary Agency
approvals and clearances for the manufacture, marketing, distribution and/or
sale of the Products in the USA Territory and (ii) an authorized officer of
Vyteris shall have delivered a written certification to B. Braun indicating that
Vyteris is able to manufacture and supply Products to B. Braun pursuant to and
in accordance with the provisions of Section 3 hereof.

                        "COMMON STOCK" shall mean shares of common stock of
Vyteris, having a par value of $.0001 per share, established under and pursuant
to the Certificate of Incorporation of Vyteris in effect as of the date hereof.

                        "COMPETITIVE PRODUCT" shall mean, collectively, any
transdermal topical anesthesia product, the primary purpose of which is to
prevent or eliminate pain resulting from dermal penetration or incision.

                        "CONFIDENTIAL INFORMATION" shall mean and include,
collectively, all intellectual property such as, but not limited to, algorithms,
approvals, certifications, chemical compounds, conceptual expressions,
copyrights, data, designs, developments, formulae, ideas, improvements,
inventions, know-how, patent applications, and all related foreign applications,
continuations, continuations-in-part and divisional applications, prototypes,
supply sources, tests and test results and trade secrets, as well as any and all
information that is received by either party hereto (which, for purposes of this
definition and the provisions of Section 7.2 hereof, shall be referred to herein
as the "RECEIVING PARTY") from the disclosing party hereto (which, for purposes
of this definition and the provisions of Section 7.2 hereof, shall be referred
to herein as the "DISCLOSING PARTY"), that is designated by the disclosing party
as confidential and, if in written form or otherwise embodied in a tangible
article, is marked "CONFIDENTIAL" or is designated as being confidential in
writing by the disclosing party within thirty (30) days of the disclosing
party's disclosure to the receiving party, or if disclosed orally is confirmed
to be confidential in a writing marked "CONFIDENTIAL" by the disclosing party
within thirty (30) days from the date of such oral disclosure; PROVIDED,
HOWEVER, notwithstanding the foregoing, Confidential Information shall not
include information of the type described in Section 7.2(c) hereof.

                        "CONTRACT YEAR" shall mean the period beginning on the
first day of the first calendar month after the Commercial Start Date and
continuing until the last day of the twelfth (12th) calendar month thereafter
(i.e. the first Contract Year) and each subsequent twelve (12) calendar month
period during the Term.

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                        "CONTRACTED CUSTOMER" shall have the meaning ascribed to
it in Section 6.4(c).

                        "DEFAULT" shall have the meaning ascribed to it in
Section 6.3(b) hereof.

                        "DELIVERY DATE" shall mean the date on which the
Products are received by B. Braun at the United States facility designated by B.
Braun in a purchase order submitted pursuant hereto.

                        "DEVELOPMENT PLAN" shall mean a description of the work
to be performed by Vyteris in connection with, among other things, the
development of the Products (including, without limitation, the preparation and
submission of the NDA Filing and the 510(k) Filing) and the obtaining of all
Agency approvals and clearances for the manufacture, marketing, distribution
and/or sale of the Products in the USA Territory, all as described on EXHIBIT
"1.2(A)" attached hereto and made a part hereof, which Development Plan may be
modified and amended from time to time upon the mutual written agreement of the
parties hereto.

                        "DOLLARS" and "$" shall mean Dollars in lawful currency
of the USA.

                        "EFFECTIVE DATE" shall mean the date of this Agreement.

                        "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

                        "EXCUSABLE DEVELOPMENT FAILURE" shall mean any failure
by Vyteris to perform any of the Product development obligations set forth in
the Development Plan within the time period required thereby that is directly
attributable to: (i) normal and customary delays encountered by Vyteris in
connection with its efforts to obtain all Agency approvals required in order to
manufacture, market, sell and distribute Products in the USA, provided that
Vyteris has exercised reasonable diligence in connection therewith including,
without limitation delays associated with (A) responding to questions, comments
and inquiries from the FDA with respect to the NDA Filing, and (B) receipt of
the FDA's response to the NDA Filing that are not caused by Vyteris; or (ii) a
fact or circumstance beyond the direct control of Vyteris and not within the
reasonable contemplation of Vyteris as of the Effective Date or addressed in the
Development Plan; PROVIDED, HOWEVER, an Excusable Development Failure shall not
include a failure by Vyteris to perform Product development obligations
resulting from Vyteris having insufficient capital, whether equity or debt, to
perform such obligations.

                        "EXCUSABLE SUPPLY FAILURE" shall have the meaning
ascribed to it in Section 6.3(b)(i) hereof.

                        "EXCUSABLE SUPPLY FAILURE NOTICE" shall have the meaning
ascribed to it in Section 6.3(b)(i) hereof.

                        "FDA" shall mean the United States Food and Drug
Administration, and any successor agency.

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                        "FDCA" shall mean the Federal Food, Drug and Cosmetic
Act, as amended from time to time.

                        "510(K) CLEARANCE" shall mean the FDA cleared 510(k)
Filing and all modifications, amendments or supplements thereto.

                        "510(K) FILING" shall mean the premarket notification
submitted to the FDA for and with respect to the Product, including any and all
information and documents included therein, attached thereto or incorporated by
reference therein, as well as all correspondence to and/or from the FDA related
thereto.

                        "FORCE MAJEURE EVENT" shall have the meaning ascribed to
it in Section 7.3(a) hereof.

                        "FOREIGN SHORTFALL AMOUNT" shall have the meaning
ascribed to it in Section 3.1(e) hereof.

                        "FOREIGN TERRITORY" shall mean, collectively, the
territory comprising the entire world, other than the USA Territory.

                        "INDUSTRIAL PROPERTY" shall mean and include,
collectively, all intellectual property rights (whether or not patented or
patentable) such as, but not limited to, algorithms, approvals, certifications,
chemical compounds, conceptual expressions, copyrights, data, designs, formulae,
ideas, improvements, inventions, know-how (whether or not publicly known or a
trade secret), patents and patent applications (including the Patent Rights),
prototypes, supply sources, tests and test results, ETC., together with that
portion of all media (whether in human or machine readable form) containing any
expression of such intellectual property rights, which directly or indirectly
relate to the development, registration, manufacture or use of the Products.

                        "KNOWLEDGE" shall mean, when used in reference to
Vyteris under Section 5.1 hereof, the actual knowledge of those officers,
directors and other members of the management of Vyteris identified on EXHIBIT
"1.2(B)" attached hereto and made a part hereof, based on reasonable inquiry of
the officers, directors, employees, outside accountants, attorneys and
institutional investors of Vyteris.

                        "LICENSED PROPERTY" shall mean, collectively, (i) the
Patent Rights, (ii) the License Rights, (iii) the Technology, and (iv) the NDA,
the NDA Filing, the 510(k) Clearance, and the 510(k) Filing.

                        "LICENSE RIGHTS" shall mean, collectively, the exclusive
license rights granted by BD&C to Vyteris under the BD&C License Agreement with
respect to BD&C's patent application Serial No. 09/584,453, "MEDICAMENT-LOADED
TRANSDERMAL RESERVOIR AND METHOD FOR ITS FORMULATION," and any corresponding
foreign patents and patent applications claiming priority thereto, which License
Rights are more fully described on EXHIBIT "1.2(C)" attached hereto and made a
part hereof.

                        "LIQUIDITY EVENT" shall mean, collectively, any
voluntary or involuntary liquidation, dissolution or winding-up of the affairs
of Vyteris or other similar event.

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                        "MARKETING PLAN" shall mean a description of the work to
be performed by B.Braun in connection with its efforts to market and sell the
Products in the USA Territory, all as described on EXHIBIT "1.2(D)" attached
hereto and made a part hereof, which Marketing Plan may be modified and amended
from time to time upon the mutual written agreement of the parties hereto or at
the request of B.Braun and with the consent of Vyteris (such consent not to be
unreasonably withheld).

                        "MDR" shall mean the medical device reporting
regulations codified in Title 21, Part 803 of the CFR.

                        "MEASUREMENT PERIOD" shall mean, for purposes of the
B.Braun Revenue Share Percentage Adjustment provisions of Section 3.5(e) hereof,
(i) each and every three (3) month period during the first and second Contract
Years (commencing with the initial three (3) month period during the first
Contract Year) and (ii) each and every six (6) month period during each
subsequent Contract Year (commencing with the initial six month period during
the third Contract Year).

                        "MILESTONE PAYMENT" shall mean the payment required to
be made by B.Braun to Vyteris pursuant to Section 2.3(a) hereof.

                        "MINIMUM AVERAGE SELLING PRICE" shall mean, for and with
respect to any Measurement Period, [*].

                        "MINIMUM DISTRIBUTION EFFORT" shall have the meaning
ascribed to it in Section 2.1(c) hereof.

                        "MINIMUM PRODUCT PURCHASE REQUIREMENTS" shall mean, with
respect to any applicable Contract Year, (i) for the Foreign Territory, the
volume of Product purchases set forth on Exhibit "1.2(E)" attached hereto and
made a part hereof, (ii) for the USA Territory, the volume of Product purchases
set forth on Exhibit "1.2(E-1)" attached hereto and made a part hereof, and
(iii) for and with respect to B. Braun's right to extend the Term under Section
6.2(b) hereof, the volume of Product purchases set forth on Exhibit "1.2(E-2)"
attached hereto and made a part hereof.

                        "NDA" shall mean the NDA Filing, in the form approved by
the FDA, and all modifications, amendments or supplements thereto.

                        "NDA FILING" shall mean, collectively, (i) the new drug
application submitted to the FDA for and with respect to the Product, including
any and all amendments, supplements, post-marketing data, and other information
and documents included therein, attached thereto or incorporated by reference
therein, as well as all correspondence to and/or from the FDA, related thereto
and (ii) any and all individual investigational new drug applications filed with
the FDA, together with all submissions, amendments and supplements to the FDA,
all data generated thereunder and all correspondence to and/or from the FDA
related thereto.

                        "NET SALES" shall mean, collectively, for any applicable
period, (i) the aggregate amount collected by either applicable party hereto or
its Affiliates in connection with

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the sale of the disposable iontophoretic patch Products by such party (exclusive
of sales made by such party to its Affiliates for resale, which, upon resale,
shall be included in Net Sales of such party hereunder), LESS (ii) freight,
special packaging and duties, sales, use, excise, value added and other taxes
(except for taxes based upon the net income of such party) and reasonable and
customary discounts, rebates, chargebacks, administrative fees paid to group
purchasing organizations, returns and allowances given or taken, as appropriate,
related to such sales of the disposable iontophoretic patch Products by such
party and its Affiliates.

                        "NEW TOPICAL ANESTHESIA PRODUCT" shall have the meaning
ascribed to it in Section 7.1(a) hereof.

                        "PATENT RIGHTS" shall mean, all issued U.S. and foreign
patents, pending U.S. and foreign patent applications of Vyteris or its
Affiliates (or in which Vyteris or its Affiliates have any right, title or
interest) and any U.S. or foreign patent applications hereinafter filed by
Vyteris or its Affiliates (or in which Vyteris or its Affiliates have any right,
title or interest) relating in any way, directly or indirectly, to the Products
or the methods of use of the Products, including any continuations,
continuations-in-part, divisionals, extensions, reexaminations, reissues or
renewals thereof. Patent Rights shall include, without limitation, the United
States and foreign patents and patent applications set forth on EXHIBIT "1.2(F)"
attached hereto.

                        "PERMITTED ENCUMBRANCE" shall have the meaning ascribed
to it in Section 5.1(d) hereof.

                        "PERSON" shall mean, collectively, an individual, a
corporation, a partnership, a joint venture, a limited liability company, a
trust or unincorporated organization, a joint stock company or other similar
organization, a government or any political subdivision thereof, or any other
legal entity.

                        "PHARMANET" shall mean Pharmanet Inc., a corporation
that is an independent clinical organization serving as agent for Vyteris in
connection with regulatory and other submissions to the FDA with respect to the
Products.

                        "PPM" shall mean the Private Placement Memorandum dated
as of March 4, 2002 prepared by Spencer Trask Ventures, Inc. on behalf of
Vyteris with respect to the issuance by Vyteris of Series C Convertible
Preferred Stock therein described, a true, correct and complete copy of which
has heretofore been furnished to B.Braun.

                        "POST-TERMINATION PERIOD" shall have the meaning
ascribed to it in Section 6.4(c) hereof.

                        "PRICING SCHEDULE" shall mean the pricing schedule for
the sale of the Products by Vyteris to B.Braun hereunder as set forth on EXHIBIT
"1.2(G)" attached hereto and made a part hereof.

                        "PRIMARY FOREIGN TERRITORY MARKETS" shall have the
meaning ascribed to it in Section 2.1(c) hereof.

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                        "PRODUCT" and "PRODUCTS" shall mean, individually or
collectively (as appropriate), the transdermal lidocaine delivery system more
particularly described on EXHIBIT "1.2(H)" attached hereto and made a part
hereof (including, without limitation, the disposable iontophoretic patches used
in connection therewith and the electrodes, printed circuitry, packaging, drug
reservoirs and electric connectors which are a part thereof), together with the
Product Developments.

                        "PRODUCT DEVELOPMENTS" shall have the meaning ascribed
to it in Section 2.1(f) hereof.

                        "PRODUCT ORDER FORECAST" shall have the meaning ascribed
to it in Section 3.1(b) hereof.

                        "PRODUCT STEERING COMMITTEE" shall mean a committee
comprised of four (4) individuals, including two (2) representatives designated
and appointed from time to time by each of Vyteris and B.Braun in their sole
discretion, the purpose of which shall be to meet from time to time as and to
the extent necessary to evaluate and make joint decisions on behalf of B.Braun
and Vyteris regarding the development of the Products, Agency submissions and
approvals, marketing and sales efforts with respect to the Products and other
issues bearing on the commercialization of the Products under and as
contemplated by this Agreement; PROVIDED, HOWEVER, the Product Steering
Committee shall have no right or authority to modify, amend or otherwise change
any provision of this Agreement.

                        "PURCHASE PRICE" and "PURCHASE PRICES" shall mean,
individually or collectively, as appropriate, the purchase price or purchase
prices at which the Products are sold by Vyteris to B.Braun hereunder, as
determined by reference to the Pricing Schedule.

                        "PURCHASED SAMPLES" shall have the meaning ascribed to
it in Section 3.2(f) hereof.

                        "QSR" shall mean the quality system regulation as set
forth in Title 21, Part 820 of the CFR.

                        "REMEDIAL DEVELOPMENT PLAN" shall have the meaning
ascribed to it in Section 2.2(b) hereof.

                        "SALES LITERATURE" shall have the meaning ascribed to it
in Section 3.2(c) hereof.

                        "SECURITIES PURCHASE AGREEMENT" shall mean,
collectively, the Subscription Agreement and the Second Round Shares Purchase
and Registration Rights Agreement dated the date hereof between Vyteris and
B.Braun, pursuant to which B.Braun has agreed to purchase, concurrently with the
execution hereof, Five Hundred (500,000) shares of Common Stock at a purchase
price of One Dollar ($1.00) per share and (ii) Vyteris has granted B. Braun an
option to purchase an additional 370,370 shares of Common Stock at a purchase
price of One Dollar and Thirty-Five Cents ($1.35) per share of Common Stock, all
on the terms and subject to the conditions set forth therein, together with any
amendments, restatements, modifications or supplements thereof or thereto.

                                       -9-
<PAGE>

                        "SPECIFICATIONS" shall mean, collectively, the
specifications for the Products set forth on EXHIBIT "1.2(I)" attached hereto
and made a part hereof and any amendments, restatements, modifications or
supplements thereof or thereof, which B.Braun has the right to review and
approve pursuant to the provisions of Section 2.2(a)(iv) hereof.

                        "SUB MARKETS" shall have the meaning ascribed to it in
Section 2.1(c) hereof.

                        "SUPPLY CONTINUATION PLAN" shall have the meaning
ascribed to it in Section 6.3(b)(i) hereof.

                        "SYSTEMIC PAIN MANAGEMENT PRODUCT" shall have the
meaning ascribed to it in Section 7.1(b) hereof.

                        "TECHNOLOGY" shall mean and include, collectively, all
Industrial Property, documentation and data directly or indirectly related to
the Products or used in connection with its or their development, testing,
regulatory approval, manufacture and/or sale, together with all improvements,
enhancements, developments and derivatives relating or pertaining thereto.

                        "TERM" shall mean the term of this Agreement, as
specified in Section 6.2 hereof.

                        "TERRITORY" shall mean, collectively, (i) the Foreign
Territory and (ii) the USA Territory.

                        "TRADEMARKs" shall mean, collectively, the trademarks,
service marks and related intellectual property rights which Vyteris owns or has
the exclusive right to license, as appropriate, as more fully described on
EXHIBIT "1.2(J)" attached hereto and made a part hereof.

                        "TRIGGERING EVENt" shall mean the failure by Vyteris to
manufacture and supply Products to B.Braun in accordance with the provisions of
this Agreement, which failure has resulted in a Default by Vyteris under and in
accordance with, and subject to the procedures established by, Section 6.3(b)(i)
hereof or (ii) the occurrence of any Default under Section 2.2(b) hereof.

                        "USA SHORTFALL AMOUNT" shall have the meaning ascribed
to it in Section 3.1(f) hereof.

                        "USA TERRITORY" shall mean, collectively, the territory
comprising the United States of America and its territories and possessions.

                        "VYTERIS" shall have the meaning ascribed to it in the
heading of this Agreement.

                                      -10-
<PAGE>

                        "VYTERIS PARTIES" shall have the meaning ascribed to it
in Section 6.1(c) hereof.

                        "VYTERIS NET SALES REPORT" shall have the meaning
ascribed to it in Section 3.5(d) hereof.

                        "VYTERIS REVENUE SHARE PAYMENT" shall have the meaning
ascribed to it in Section 3.5(c) hereof.

                        "VYTERIS REVENUE SHARE PERCENTAGE" shall mean the
applicable percentage set forth on Exhibit "1.2(K)" attached hereto and made a
part hereof.

                1.3 OTHER DEFINITIONS. Any capitalized term used in this
Agreement and defined in a Section of this Agreement other than Sections 1.1 or
1.2 hereof shall have the meaning ascribed to it in such Section of this
Agreement.

                SECTION 2. GRANT OF LICENSE; PRODUCT DEVELOPMENT; MILESTONE AND
OTHER PAYMENTS; EQUITY INVESTMENT BY B. BRAUN IN VYTERIS.

                2.1 GRANT OF LICENSE; PRODUCT DEVELOPMENT; TRADEMARKS.

                        (a)     Subject to the provisions of Sections 2.1(b),
2.1(c), 2.1(d), 3.1(e), and 3.1(f) hereof, and the other terms and conditions
set forth in this Agreement, Vyteris hereby (i) appoints B.Braun to serve as the
exclusive distributor for Vyteris of, and grants to B.Braun the exclusive right
to, directly and indirectly market, sell and distribute the Products in the
Territory (the right to distribute includes the right to market, sell, display,
advertise and otherwise promote the Products) during the Term and (ii) grants to
B.Braun during the Term and the Post-Termination Period (and any extension
thereof pursuant to Section 6.5 hereof), and subject to the other terms and
conditions of this Agreement (including, without limitation, the revenue-sharing
obligations under Section 3.5 hereof and the provisions of Section 2.1(b)
hereof), an exclusive worldwide license in and to the Licensed Property to make
(and have made), use, practice, import, offer to sell, sell, distribute,
improve, enhance, develop, and derive the Products.

                        (b)     Notwithstanding anything contained herein to the
contrary, the license granted by Vyteris to B.Braun pursuant to the provisions
of clause (ii) of Section 2.1(a) hereof is and shall constitute a present,
absolute and unconditional exclusive worldwide license, as therein described,
except as otherwise provided in such clause (ii); provided, however, B.Braun
covenants and agrees that it shall refrain from using or exploiting, and shall
not use or exploit, such license in any way unless and until a Triggering Event
shall have occurred, in which event: (i) the rights of B.Braun in and to such
license shall no longer be subject to the covenants and restrictions contained
in this Section 2.1(b), it being understood and agreed, however, that nothing
contained herein shall be deemed to affect the rights of B.Braun under clause
(i) of Section 2.1(a) hereof; (ii) Vyteris shall promptly deliver, or cause to
be delivered to B.Braun, copies of all files, documents, data, information,
records, and written materials in the possession or under the control of Vyteris
that relate or pertain to the Licensed Property and the Products so as to enable
B.Braun to fully exploit the license described in clause (ii) of Section 2.1(a)
hereof (including, without limitation, all such files, documents, data,
information, records, and materials necessary for B.Braun to manufacture the
Products); and (iii) certain rights of

                                      -11-
<PAGE>

Vyteris shall terminate and certain provisions of this Agreement shall be
modified in the manner set forth in Section 6.5 hereof.

                        (c)     Notwithstanding the foregoing, but subject to
the terms and conditions set forth in this Section 2.1(c), Section 2.1(d) hereof
and Section 2.1(e) hereof, at any time after the third anniversary of the
Commercial Start Date, Vyteris shall have the right to market, sell and
distribute Products in: (i) those secondary market segments in the Territory
("Sub Markets") described in Exhibit 2.1 in which B.Braun has not achieved a
meaningful market presence with respect to the marketing, sale and distribution
of Products; and/or (ii) those primary market segments consisting of hospital
care and outpatient care facilities in those countries in the Foreign Territory
in which B.Braun has not commenced and continued to sell the Products to such
facilities ("Primary Foreign Territory Markets"). Vyteris shall provide B.Braun
with written notice of its desire to exercise rights under this Section 2.1(c),
which notice shall contain a detailed description of: (x) the Sub Markets and/or
the Primary Foreign Territory Markets, together with the related Territory
covered thereby, in which Vyteris desires to market, sell and distribute
Products; and (y) the manner in which Vyteris (or its agents or representatives)
intends to solicit business in the applicable Sub Markets and/or the applicable
Primary Foreign Territory Markets. Vyteris shall also promptly provide, or cause
to be promptly provided, to B.Braun any and all other information reasonably
requested by B.Braun in connection with the foregoing. B.Braun shall review the
notice (and related information) provided to it by Vyteris in good faith
pursuant to this Section 2.1(c) and, within thirty (30) days following B.
Braun's receipt of such notice (and related information), advise Vyteris whether
or not B.Braun intends to engage within the next six (6) months in, as
appropriate, (i) meaningful activities to market, sell and distribute Products
in the applicable Sub Markets referred to in the notice from Vyteris and/or (ii)
the commencement and/or continuation of the sale of the Products in the country
in which the applicable Primary Foreign Territory Market referred to in the
notice from Vyteris is located (the activities and efforts described in the
foregoing clauses (i) and (ii), as appropriate, being collectively referred to
herein as the "Minimum Distribution Effort").

                        (d)     If B.Braun advises Vyteris that it does not
intend to engage in the Minimum Distribution Effort in the applicable Sub Market
and/or the country in which the applicable Primary Foreign Territory Market is
located, as appropriate, or fails to respond to the notice delivered by Vyteris
under Section 2.1(c) hereof within the thirty (30) day period provided therein:
(i) with respect to the applicable Sub Market, Vyteris shall thereafter have the
right to market, sell and distribute Products in such Sub Market on a
non-exclusive basis, the exclusive license of B.Braun to market, sell and
distribute Products in such Sub Market shall be converted to a non-exclusive
license (with no other amendments or modifications thereto), and B.Braun shall
retain all of its rights in and to the Vyteris Revenue Share Payments due in
connection with Net Sales of Vyteris in such Sub Market; or (ii) with respect to
the country in which the applicable Primary Foreign Territory Market is located,
Vyteris shall thereafter have the right to market, sell and distribute Products
on an exclusive basis in such country, the exclusive license of B.Braun to
market, sell and distribute Products in such country shall be terminated, and
B.Braun shall have no further duties or obligations under Section 3.2(a) with
respect to such country.

                        (e)     For each such Sub Market or Primary Foreign
Territory Market for which B.Braun provides notice to Vyteris pursuant to
Section 2.1(c) hereof that it intends to

                                      -12-
<PAGE>

engage in the Minimum Distribution Effort, it shall provide to Vyteris a
detailed plan setting forth the manner and proposed schedule on which it intends
to engage in the Minimum Distribution Effort, including projected minimum sales
levels. B.Braun shall also promptly provide, or cause to be promptly provided,
to Vyteris any and all other information reasonably requested by Vyteris in
connection with the foregoing. Such plan shall be subject to the approval by
Vyteris, which approval shall not be unreasonably withheld, delayed or
conditioned. B.Braun shall thereafter diligently perform in accordance with the
plan to market the Products in the applicable Sub Market or country in which the
applicable Primary Foreign Territory Market is located. If B.Braun does not meet
the minimum sales levels set forth in the plan for reasons other than a breach
by Vyteris of this Agreement, in and with respect to an applicable Sub-market or
country in which an applicable Primary Foreign Territory Market is located
Vyteris shall thereafter have the right to market, sell and distribute Products
in such Sub Market and/or country on a non-exclusive basis, the exclusive
license of B.Braun to market, sell and distribute Products in such Sub Market or
country shall be converted to a non-exclusive license (with no other amendments
or modifications thereto), and B.Braun shall retain all of its rights in and to
the Vyteris Revenue Share Payments due in connection with Net Sales of Vyteris
in such Sub Market or country. In the event of a dispute between Vyteris and
B.Braun concerning agreement on a mutually-acceptable plan required under this
Section 2.1(e), or whether B.Braun has met its minimum sales obligations under
any such plan, the parties shall arbitrate such dispute before a single
arbitrator, pursuant to and in accordance with Section 7.3(i) hereof.

                        (f)     In the event that during the Term any invention,
development, modification, enhancement or improvement relating or pertaining to
the Products (all of the foregoing being collectively referred to herein as a
"Product Development") shall be made by or on behalf of, or otherwise acquired
or licensed by, Vyteris, (i) Vyteris shall promptly disclose the Product
Development to B.Braun, together with such relevant data, information and
documentation relating or pertaining to the Product Development in the manner
necessary for B.Braun to utilize the Product Development in a manner
contemplated hereby, and (ii) such Product Development shall be made available
to B.Braun and be deemed to be part of the rights granted to B.Braun hereunder,
subject, in all respects, to the terms and conditions of this Agreement.

                        (g)     In the event that during the Term any Product
Development shall be made by or on behalf of B.Braun, (i) B.Braun shall promptly
disclose such Product Development to Vyteris, together with such relevant data,
information and documentation relating or pertaining to such Product Development
in a manner necessary for Vyteris to utilize the Product Development in a manner
contemplated hereby and (ii) B.Braun hereby grants to Vyteris a perpetual,
worldwide, royalty-free, fully-paid, non-exclusive right and license to the
Product Development to make, have made, offer for sale, sell, use and import any
Product Development; PROVIDED, HOWEVER, the rights of Vyteris in and to such
Product Developments made by or on behalf of B.Braun shall be subject, in all
respects to the other terms and conditions of this Agreement.

                        (h)     Vyteris hereby grants to B.Braun an exclusive,
non-transferable, royalty-free license to display, and use the Trademarks
without alteration or modification solely with respect to B. Braun's advertising
and marketing of the Products purchased, or to be purchased, during the Term and
the Post-Termination Period and not for any other purpose.

                                      -13-
<PAGE>

B.Braun acknowledges the right, title and interest of Vyteris in the Trademarks
and agrees that any goodwill generated by B. Braun's use or display of the
Trademarks will inure to the benefit of Vyteris. B.Braun further acknowledges
that neither this Agreement nor the use by B.Braun of the Trademarks shall
create any right, title or interest in or to the Trademarks by B.Braun. B.Braun
shall submit all proposed uses of the Trademarks to Vyteris for its prior
approval, which approval shall not be unreasonably withheld, conditioned or
delayed, and B.Braun further agrees that the nature and quality of all proposed
uses of the Trademarks under the terms of this Agreement shall conform to
standards reasonably established from time to time by Vyteris and notice of
which is furnished by Vyteris to B.Braun. B.Braun agrees to cooperate with
Vyteris in efforts by Vyteris to facilitate the control of such nature and
quality, to permit reasonable inspection of B. Braun's uses of the Trademarks
and to provide Vyteris with details regarding such uses as reasonably requested
by Vyteris. B.Braun agrees to use the Trademarks only in the form and manner
approved by Vyteris, subject to the other provisions hereof. B.Braun agrees not
to use the Trademarks in combination with any other trademark or service mark
without prior written and signed authorization from Vyteris. This Agreement is
not intended to convey and does not convey to B.Braun the right to display or
use any trademarks or service marks of Vyteris other than the Trademarks.

                2.2 PRODUCT DEVELOPMENT OBLIGATIONS OF VYTERIS; AND RELATED
COVENANTS.

                        (a)     Vyteris represents, warrants, covenants and
agrees to and with B.Braun that:

                                (i) it has reviewed and approved of the
        Development Plan and all development and related tasks required to be
        performed by it thereunder;

                                (ii) it shall use commercially reasonable
        efforts to complete all of the tasks set forth in the Development Plan
        in accordance with the time periods set forth therein;

                                (iii) it shall provide B.Braun with an adequate
        opportunity to review and provide suggestions and proposed modifications
        to the NDA Filing and the 510(k) Filing to be made by Vyteris in
        accordance with the Development Plan or otherwise pursuant to this
        Agreement and, in connection therewith, it shall in good faith endeavor
        to incorporate reasonable suggestions and proposed modifications to the
        NDA Filing and the 510(k) Filing proposed by B.Braun as and to the
        extent permitted by applicable laws, rules and regulations;

                                (iv) it shall provide B.Braun with an adequate
        opportunity to review and provide suggestions and proposed modifications
        to all features, the functions, and the appearance (including, without
        limitation, labeling, packaging and graphics) of the Product and the
        Specifications therefor and, in connection therewith, it shall in good
        faith endeavor to incorporate reasonable suggestions and proposed
        modifications to the Product and the Specifications as and to the extent
        permitted by applicable laws, rules and regulations;

                                      -14-
<PAGE>

                                (v) it shall provide B.Braun with advance
        written notice if it believes that it will be unable to perform any of
        the tasks set forth in the Development Plan within the time periods
        provided thereby, which notice shall, when feasible, be furnished to
        B.Braun at least thirty (30) days in advance of the scheduled task
        completion date, or if not feasible, as promptly as Vyteris can provide
        such notice;

                                (vi) as soon as possible, but in any event not
        later than twenty (20) days following the close of each calendar month,
        it shall furnish to B.Braun a status report regarding the Product
        development obligations of Vyteris under the Development Plan, in a
        format reasonably acceptable to B.Braun;

                                (vii) it shall provide B.Braun with prompt
        written notice of any breach or default by either Vyteris or BD&C under
        the BD&C License Agreement, together with a detailed description
        thereof, and shall take any and all action necessary to cure, or cause
        to be cured, such breach or default to ensure that the License Rights of
        Vyteris thereunder remain in full force and effect;

                                (viii) it shall provide B.Braun with prompt
        written notice of any breach or default by Vyteris under any agreement,
        document or instrument evidencing, relating or pertaining to the
        Permitted Encumbrance, (or any lien, security interest, pledge or
        encumbrance referred to in Section 2.2(a)(ix) hereof) together with a
        detailed description thereof, and shall take any and all action
        necessary to cure, or cause to be cured, such breach or default;

                                (ix) it shall provide B.Braun with at least
        fifteen (15) days' advance written notice of any lien, security
        interest, pledge or other encumbrance on the Licensed Property, or any
        portion thereof, and, as a condition thereto, shall cause the holder of
        such lien, security interest, pledge or other encumbrance to enter into
        an agreement with B.Braun, in form and substance reasonably satisfactory
        to B.Braun, under which such holder agrees (A) that its lien, security
        interest, pledge or other encumbrance is under and subject to the rights
        of B.Braun hereunder and (B) not to disturb, interfere or impair any
        right of B.Braun hereunder;

                                (x) it shall promptly furnish to B.Braun, upon
        B. Braun's request, any and all other information relating or pertaining
        to the Product development obligations under the Development Plan as
        B.Braun may reasonably request from time to time; and

                                (xi) it shall furnish B.Braun with at least
        thirty (30) days' advance written notice of any Change in Control
        Transaction to which it will be a party.

                        (b)     Vyteris shall promptly notify B.Braun in writing
when Vyteris becomes aware that it will fail or be unable to perform any of the
Product development obligations set forth in the Development Plan within the
time period required thereby, together with a description of the circumstances
giving rise to such failure. If such failure constitutes an Excusable
Development Failure and Vyteris provides B.Braun with reasonably satisfactory
evidence thereof with the aforesaid notice, such failure shall not constitute a
Default and Vyteris

                                      -15-
<PAGE>

shall, within thirty (30) days from B. Braun's receipt of such notice, provide
B.Braun with a written plan setting forth the actions Vyteris shall take to
remedy the Excusable Development Failure to meet the obligations in, and/or to
modify the requirements of the Development Plan, including the estimated times
and costs to perform the obligations under such plan (the "Remedial Development
Plan") consistent with the goals and objectives of the development project
herein. The Remedial Development Plan shall be subject to the review and
approval by B.Braun, which review and approval shall not be unreasonably
withheld, conditioned or delayed. In the event that Vyteris fails to perform any
of its obligations under the Remedial Development Plan to B. Braun's reasonable
satisfaction, B.Braun shall have the right to provide written notice of such
failure to Vyteris. If such failure remains uncured for sixty (60) days
following such notice from B.Braun, B.Braun may thereafter: (i) declare Vyteris
to be in Default under this Agreement without regard to any further notice or
cure period otherwise provided hereunder; and (ii) exercise any and all rights
and remedies available to B.Braun under this Agreement as a result of such
Default. In the event of a dispute between Vyteris and B.Braun concerning
agreement on a mutually acceptable Remedial Development Plan, the parties shall
arbitrate such dispute before a single arbitrator in accordance with Section
7.3(i) hereof. Any failure by Vyteris to perform any of the Product development
obligations set forth in the Development Plan within the time period required
thereby which does not constitute an Excusable Development Failure shall, at B.
Braun's option, by a Default if such failure is not cured within thirty (30)
days following written notice from B. Braun to Vyteris of such failure.

                        (c)     In connection with the obligations of Vyteris
under this Section 2.2, Vyteris shall also provide eighty (80) hours of training
per Contract Year to sales representatives and marketing personnel of B.Braun
concerning the use of the Products, such training to be at such times and
locations designated by B.Braun subject to approval by Vyteris, which approval
shall not be unreasonably withheld. Any additional training time requested by
B.Braun shall be provided by Vyteris to B.Braun, for which Vyteris shall invoice
B.Braun and B.Braun shall pay Vyteris the actual cost to Vyteris of providing
such additional training. All reasonable travel and hotel accommodation costs
associated with such training shall be borne by B.Braun. All other costs
associated with such training, together with any materials, samples or equipment
required for such training, shall be borne by Vyteris.

                        (d)     Notwithstanding anything contained herein to the
contrary, it is understood and agreed that Vyteris shall only be required to
pursue and obtain Agency approvals set forth in the Development Plan for the
marketing and sale of the Products in the USA Territory and shall have no duty
or obligation to pursue and obtain any Agency approvals in the Foreign
Territory; PROVIDED, HOWEVER, upon B. Braun's request at any time and from time
to time during the Term, Vyteris shall provide cooperation and assistance to
B.Braun in connection with B. Braun's efforts, at its own cost and expense, to
pursue and/or obtain any Agency Approval in any country of the Foreign
Territory; it being understood and agreed that such cooperation and assistance
shall include, without limitation, providing B.Braun with access to, and copies
of, all data and information, including clinical studies, stability data,
material qualifications, Specifications, Product labeling, validation data, and
quality systems data and information developed by or for Vyteris in connection
with the NDA Filing and the 510(k) Filing, but only to the extent that such data
and information are within the direct or indirect control of Vyteris and the
disclosure of such data and information to B.Braun is within the legal rights of
Vyteris; it being understood that, for purposes of the foregoing, data and
information in the possession or

                                      -16-
<PAGE>

control of Pharmanet shall be deemed to be within the control of Vyteris.
Vyteris shall retain the right, but not the obligation, to pursue and obtain
Agency approval in any country of the Foreign Territory in which B.Braun has not
pursued such approval. In the event B.Braun obtains Agency approval to market,
sell and distribute Products in a country of the Foreign Territory, to the
extent Vyteris is permitted under this Agreement to market, sell or distribute
Products in such country, B.Braun shall cooperate and assist Vyteris, at the
cost and expense of Vyteris, in connection with efforts by Vyteris to obtain, in
its own name, the right and ability to market, sell and distribute Products in
such country so long as such cooperation and assistance does not interfere,
impair or adversely affect the rights of B.Braun in such country. To the extent
necessary or beneficial, the parties shall utilize the Product Steering
Committee to ensure proper communication and coordination with respect to
efforts to obtain any desired Agency Approval.

                2.3 MILESTONE PAYMENT.

                        (a)     For and in consideration of the covenants and
agreements of Vyteris herein, B.Braun covenants and agrees to pay to Vyteris an
amount equal to Three Hundred Thousand Dollars ($300,000) upon execution and
delivery of this Agreement (the "Milestone Payment").

                        (b)     The Milestone Payment shall be paid by wire
transfer of immediately available funds to such account or accounts as Vyteris
may designate in writing to B.Braun at least one (1) day prior to the scheduled
Milestone Payment.

                2.4 EQUITY INVESTMENT BY B.BRAUN. In connection with and as a
condition to the agreement by Vyteris to complete the transactions described
herein and contemplated hereby, B.Braun shall make an investment in Vyteris in
the aggregate amount of Five Hundred Thousand Dollars ($500,000), on the terms
and subject to the conditions of the Securities Purchase Agreement.

                SECTION 3. MANUFACTURE, SUPPLY AND DISTRIBUTION OF PRODUCTS.

                3.1 MANUFACTURE AND SUPPLY OF PRODUCTS; MINIMUM PRODUCT PURCHASE
REQUIREMENTS.

                        (a)     On the terms and subject to the conditions
hereinafter set forth, Vyteris shall manufacture or have manufactured, and
supply to B.Braun, and B.Braun shall purchase exclusively from Vyteris, B.
Braun's requirements for the Products during the Term and the Post-Termination
Period.

                        (b)     Vyteris shall notify B.Braun in writing within
three (3) business days of its receipt of all Agency approvals and clearances to
sell the Products in the USA Territory. Within ten (10) calendar days following
receipt of such notice, B.Braun shall submit an initial binding purchase order
for the Products to be delivered within such reasonable time period to which the
parties may agree (but in any event not later than one hundred eighty (180) days
from the date of such notice), together with a binding purchase order for
Products to be delivered for the next succeeding calendar quarter. Thereafter,
B.Braun shall submit binding purchase orders to Vyteris for the Products not
less than one hundred twenty (120) days prior to

                                      -17-
<PAGE>

the commencement of each calendar quarter for the Products to be delivered
during such calendar quarter, together with a rolling non-binding forecast of
orders (the "Product Order Forecast") of Products for the succeeding three (3)
calendar quarters during the Term and Post-Termination Period. Each purchase
order shall specify (i) the name and quantities of Products to be purchased, and
(ii) the desired Delivery Dates and shipping instructions with respect thereto.
Except for the information specified in clauses (i) and (ii) of the immediately
preceding sentence, the purchase and sale of the Products shall be governed
solely by this Agreement and any additional or contrary terms or provisions
contained in any purchase order or similar form or invoice or acknowledgment
shall be void and have no force or effect. Notwithstanding anything contained
herein to the contrary, each purchase order submitted by B. Braun shall be for a
minimum quantity of Products equal to at least seventy-five percent (75%) of the
quantity of Products set forth in the most recent Product Order Forecast
furnished by B.Braun under this Section 3.1(b) for such calendar quarter.

                        (c)     Notwithstanding the provisions of Sections
3.1(a) and 3.1(b) hereof, provided that Vyteris shall have used commercially
reasonable efforts to manufacture and supply the quantity of Products ordered by
B.Braun, Vyteris shall have no liability to B.Braun for any failure, nor shall
it constitute a Default hereunder, to fail to supply Products under any purchase
order submitted by B.Braun to Vyteris for any applicable calendar quarter to the
extent that such purchase order: (i) exceeds one hundred twenty-five percent
(125%) of the amount of Products forecasted by B.Braun in the most recent
Product Order Forecast submitted by it to Vyteris for the applicable calendar
quarter; or (ii) during the three (3) year period commencing on the Commercial
Start Date, exceeds the amounts set forth in the Capacity Plan attached hereto
as Exhibit 3.1 attached hereto and made a part hereof.

                        (d)     Each purchase order shall constitute a contract
consisting of the terms of the order and the terms of this Agreement and the
parties shall comply in all respects with the obligations set forth therein,
including, without limitation, the obligation of Vyteris to deliver the Products
on the Delivery Dates set forth in the purchase order. It is understood and
agreed that the Product Steering Committee shall be utilized by the parties
hereto to ensure that the parties hereto coordinate the ordering of Products,
the forecasting of Product orders under the Product Order Forecast and
manufacturing of Products in accordance with the provisions of this Agreement;
PROVIDED, HOWEVER, notwithstanding anything contained in this Agreement to the
contrary, the Product Steering Committee shall have no right or authority to
modify, amend, supplement or otherwise change any of the provisions of this
Agreement without the written consent of the parties hereto.

                        (e)     During each Contract Year commencing with the
third Contract Year, B.Braun agrees to submit purchase orders for the Minimum
Product Purchase Requirements applicable to the Foreign Territory. In the event
that B.Braun fails to submit purchase orders for the Minimum Product Purchase
Requirements during any Contract Year for the Foreign Territory, as required by
this Section 3.1(e) (the amount by which the actual quantity of Products ordered
is less than the required minimum orders being referred to herein as the
"Foreign Shortfall Amount"), provided such failure is not as a result of a
breach of this Agreement by Vyteris or a Force Majeure Event, B.Braun shall pay
to Vyteris, within sixty (60) days following the close of the applicable
Contract Year, an amount equal to forty percent (40%) multiplied by an amount
equal to the Foreign Shortfall Amount multiplied by the Purchase

                                      -18-
<PAGE>

Price(s). Within ninety (90) days after the end of any Contract Year, B.Braun
may advise Vyteris in writing that it elects to convert that portion of the
exclusive rights granted under Section 2.1(a) hereof which relate to the sale of
the Products in the Foreign Territory to a non-exclusive right with all other
terms and conditions of this Agreement remaining in full force and effect and
unmodified (including, unless otherwise modified pursuant to the provisions of
Section 3.1(f) hereof, the exclusive rights which relates to the sale of
Products in the USA Territory). Upon conversion under this Section 3.1(e),
B.Braun shall have no further obligation in any subsequent Contract Year to
purchase the Minimum Product Purchase Requirements in the Foreign Territory.

                        (f)     During each Contract Year, B.Braun agrees to
submit purchase orders for the Minimum Product Purchase Requirements applicable
to the USA Territory. In the event that B.Braun fails to submit purchase orders
for the Minimum Product Purchase Requirements during any Contract Year for the
USA Territory, as required by this Section 3.1(f) (the amount by which the
actual quantity of Products ordered is less than the required minimum orders
being referred to herein as the "USA Shortfall Amount"), provided such failure
is not as a result of a breach of this Agreement by Vyteris or a Force Majeure
Event, B.Braun shall pay to Vyteris, within sixty (60) days following the close
of the applicable Contract Year, an amount equal to forty percent (40%)
multiplied by an amount equal to the USA Shortfall Amount multiplied by the
Purchase Price. Within ninety (90) days after the end of any Contract Year,
B.Braun may advise Vyteris in writing that it elects to convert that portion of
the exclusive rights granted under Section 2.1(a) hereof which relate to the
sale of the Products in the USA Territory to a non-exclusive right with all
other terms and conditions of this Agreement remaining in full force and effect
and unmodified (including, unless otherwise modified pursuant to the provisions
of Section 3.1(e) hereof, the exclusive rights which relates to the sale of
Products in the Foreign Territory). Upon conversion under this Section 3.1(f),
B.Braun shall have no further obligation in any subsequent Contract Year to
purchase the Minimum Product Purchase Requirements in the USA Territory.

                        (g)     Except as otherwise provided in and permitted in
accordance with the provisions of Section 2.1 hereof, Vyteris covenants and
agrees that it shall not, directly or indirectly, supply Products to any Person
other than B.Braun for sales of Product in any Territory for which the grant is
exclusive to B.Braun under this Agreement.

                3.2 Distribution of Products; Sales Literature; Samples.

                        (a)     B.Braun shall use commercially reasonable
efforts to distribute and promote the sale of the Products within the Territory.
In the performance of such obligation, B.Braun shall:

                        (i) maintain such sales personnel and facilities with
        respect to the Products as B.Braun reasonably determines to be adequate;
        and

                        (ii) use its commercially reasonable efforts to solicit
        new customers and to maintain existing customers for the Products.

                                      -19-
<PAGE>

                        (b)     B.Braun represents, warrants, covenants and
agrees to and with Vyteris that:

                        (i) it has reviewed and approved the Marketing Plan and
        all marketing and related tasks required to be performed by it
        thereunder;

                        (ii) it shall use commercially reasonable efforts to
        complete all of the tasks set forth in the Marketing Plan in accordance
        with the time periods set forth therein; and

                        (iii) during the Term and in furtherance of its duties
        and obligations under this Section 3.2, it shall not market or sell any
        Competitive Product in any part of the Territory in which B.Braun then
        has exclusive license rights under Section 2.1(a) hereof.

                        (c)     On the Effective Date and on the first day of
each calendar quarter thereafter, Vyteris shall provide B.Braun with two (2)
copies of each piece of sales, marketing or promotional literature, if any,
created or used by Vyteris in connection with the marketing and sale of the
Products (the "Sales Literature"). Vyteris hereby grants to B.Braun the
non-exclusive, royalty free right during the Term and Post-Termination Period
to: (i) reproduce the Sales Literature; (ii) prepare and reproduce derivative
works based upon the Sales Literature; (iii) distribute copies of the Sales
Literature and such derivative works; and (iv) otherwise use the Sales
Literature for the marketing and sale of the Products. Vyteris hereby represents
and warrants to B.Braun that the information contained in any Sales Literature
will be true, accurate and complete in all material respects, and shall comply
with all applicable laws, rules and regulations. B.Braun hereby represents and
warrants that its use of the Sales Literature and any derivative works thereof
shall be in full and complete compliance with the provisions of Section 2.1(h)
hereof.

                        (d)     Before B.Braun shall print or use any
advertising or other sales materials related to the Products other than the
Sales Literature, B.Braun shall submit a copy of the material for review and
approval by Vyteris, which approval shall not be unreasonably withheld,
conditioned or delayed. Vyteris shall respond to such proposed advertising or
other sales materials no later ten (10) calendar days after receipt of such
proposed advertising or other sales materials. If Vyteris fails to respond
within such period, Vyteris shall be deemed to have approved such advertising or
sales material.

                        (e)     Vyteris covenants and agrees that it shall
promptly submit, or cause to be promptly submitted, to the FDA any and all
advertising, sales, packaging, labeling and other materials related to the
Products which B.Braun intends and is permitted to use pursuant to the
provisions of Sections 3.2(d) or 3.3(b) hereof, as and to the extent required in
accordance with all applicable laws, rules and regulations.

                        (f)     Vyteris shall provide samples of the Products to
B.Braun, for its use in marketing Products to customers. Vyteris shall provide
such samples at no cost to B.Braun, in quantities up to but not exceeding the
amounts set forth in the schedule in Exhibit "3.2" attached hereto and made a
part hereof. Any additional samples needed by B.Braun shall be purchased by it
at the Purchase Price (the "Purchased Samples").

                                      -20-
<PAGE>

                3.3 PRODUCT SPECIFICATIONS.

                        (a)     Except as mandated by applicable laws, rules,
regulations, or Agency requirements, no modification, change, or enhancement
shall be made by Vyteris to the Products without the prior written consent of
B.Braun, which consent shall not be unreasonably withheld or delayed; provided
that if B.Braun fails to respond to any proposed modification, change, or
enhancement from Vyteris within thirty (30) days following receipt of such
proposed modification, change or enhancement, B.Braun shall be deemed to have
consented to such proposed modification, change or enhancement. As and to the
extent permitted by applicable laws, rules and regulations, Vyteris hereby
agrees to promptly modify, change or enhance the Products at B. Braun's
reasonable request to address any complaints or concerns raised by an Agency or
reasonable complaints or concerns raised by B.Braun customers, provided that
Vyteris approves such modification, change or enhancement, which approval by
Vyteris shall not be unreasonably withheld or delayed. Any modification, change
or enhancement approved and made in accordance with this Section 3.3(a) shall
constitute a Product Development as provided in Section 2.1(f) hereof.

                        (b)     As and to the extent permitted by applicable
laws, rules and regulations, the Products shall be supplied to B.Braun
assembled, packaged, and labeled with artwork provided and approved by B.Braun.
As and to the extent permitted by applicable laws, rules and regulations,
B.Braun shall have the right, at its sole expense, to modify and change product
labeling upon sixty (60) days prior written notice to Vyteris.

                3.4 PURCHASE PRICES; PAYMENT OF PURCHASE PRICE.

                        (a)     Products shall be purchased by B.Braun from
Vyteris, and sold by Vyteris to B.Braun, at the Purchase Prices.

                        (b)     Vyteris shall bear all federal, state and local
taxes based upon or measured by its net income derived under this Agreement. Any
other tax, however denominated and howsoever measured, imposed upon the purchase
and sale by B. Braun of the Products or upon its storage, inventory, sale,
transportation, delivery, use or consumption shall be the responsibility of
B.Braun.

                        (c)     Vyteris shall invoice B.Braun concurrently with
any shipment of Products and B.Braun shall make full payment to Vyteris, at the
address specified on the invoice, no later than forty-five (45) days from the
later of: (i) B. Braun's receipt of the invoice for the Product ordered; or (ii)
B. Braun's receipt of the Products to which the invoice relates.

                3.5 REVENUE SHARE AGREEMENT.

                        (a)     Within forty-five (45) days following the close
of each calendar quarter during the Term and the Post-Termination Period,
B.Braun shall pay to Vyteris an amount equal to (i) (A) the B. Braun Revenue
Share Percentage multiplied by (B) the Net Sales of B.Braun for and with respect
to the immediately preceding calendar quarter, minus (ii) the sum of (A) the
aggregate amount paid by B.Braun to Vyteris in respect of the disposable
iontophoretic patch Products pursuant to Section 3.4 hereof, the sale of which
are taken into account in the calculation of Net Sales under clause (i)(B) and
(B) the aggregate amount paid by

                                      -21-
<PAGE>

B.Braun to Vyteris in respect of iontophoretic controller and component Products
pursuant to Section 3.4 hereof which were sold in combination with the
disposable iontophoretic patch Products and at a single sale price for both the
iontophoretic patch and controller Products, the sales of which are taken into
account in the calculation of Net Sales under (i) (B)(the payment due and owing
from B.Braun to Vyteris under this Section 3.5(a) being referred to herein as
the "B.Braun Revenue Share Payment"); PROVIDED, HOWEVER, notwithstanding
anything contained herein to the contrary, in the event that the calculation of
the B. Braun Revenue Share Payment results in a negative number for any
applicable calendar quarter, then (y) no payment shall be due and owing by B.
Braun to Vyteris in respect of such B. Braun Revenue Share Payment for the
applicable calendar quarter and (z) Vyteris shall pay to B. Braun, within
forty-five (45) days of Vyteris' receipt of the B.Braun Net Sales Report for the
applicable calendar quarter and in the manner required by Section 3.5(d) hereof,
an amount equal to the difference between (1) the amount calculated under clause
(ii) of this Section 3.5(a) for the applicable calendar quarter and (2) the
amount calculated under clause (i) of this Section 3.5(a) for the applicable
calendar quarter. Notwithstanding the foregoing, the aggregate amount of paid by
B. Braun to Vyteris for Purchased Samples of iontophoretic patch Products shall
not be included in the amount calculated under clause (ii)(A) above. In
determining the aggregate amount paid by B. Braun to Vyteris in respect of the
disposable iontophoretic patch Products under clause (ii)(A) above, B. Braun
shall use the same accounting method generally used by B. Braun at the time of
such calculation to determine the cost of goods sold for other purchased
finished goods inventory.

                        (b)     The B.Braun Revenue Share Payment shall be: (i)
paid in Dollars ($) to Vyteris at its address set forth in Section 7.3(b)
hereof; and (ii) accompanied by a written report (a "B.Braun Net Sales Report"),
in form and substance reasonably acceptable to Vyteris, setting forth all sales
and related data and information from which B. Braun's calculation of Net Sales
was made.

                        (c)     Within forty-five (45) days following the close
of each calendar quarter during the Term and the Post-Termination Period,
Vyteris shall pay to B.Braun an amount equal to (i) (A) the Vyteris Revenue
Share Percentage multiplied by (B) the Net Sales of Vyteris for and with respect
to the immediately preceding calendar quarter (the payment due and owing from
B.Braun to Vyteris under this Section 3.5(c) being referred to herein as the
"Vyteris Revenue Share Payment").

                        (d)     The Vyteris Revenue Share Payment shall be: (i)
paid in Dollars ($) to B.Braun at its address set forth in Section 7.3(b)
hereof; and (ii) accompanied by a written report (a "Vyteris Net Sales Report"),
in form and substance reasonably acceptable to B.Braun, setting forth all sales
and related data and information from which Vyteris's calculation of Net Sales
was made.

                        (e)     In the event that the Average Selling Price is
less than the Minimum Average Selling Price for any Measurement Period, Vyteris
shall have the right, upon written notice to B. Braun within fifteen (15) days
following the payment of the B. Braun Revenue Share Payment by B. Braun for the
period comprising the most recent completed Measurement Period, (the "Completed
Measurement Period"), to cause B. Braun to enter into good faith discussions and
negotiations regarding a fair and equitable upward adjustment to the B. Braun
Revenue Share Percentage (a "B. Braun Revenue Share Percentage Adjustment") for

                                      -22-
<PAGE>

the Measurement Period immediately following such Completed Measurement Period.
No B. Braun Revenue Share Percentage Adjustment shall be effective and binding
upon the parties hereto unless the B. Braun Revenue Share Adjustment has been
agreed to in writing by both B. Braun and Vyteris; PROVIDED, HOWEVER, if B.
Braun and Vyteris are unable to agree upon a fair and equitable B. Braun Revenue
Share Percentage Adjustment within forty-five (45) days following the
commencement of discussions and negotiations with respect thereto, B. Braun and
Vyteris agree, at the written request of Vyteris, to submit the matter to
binding arbitration in which a single arbitrator having sufficient industry
experience and qualifications and reasonably satisfactory to both B. Braun and
Vyteris, shall be authorized and directed to determine a fair and equitable B.
Braun Revenue Share Percentage Adjustment. Such determination by the arbitrator
shall be based upon such factors that the arbitrator deems relevant in
connection therewith including, without limitation, the gross profit margin of
Vyteris prior to any request for a B. Braun Revenue Share Percentage Adjustment
hereunder and the gross profit margin of Vyteris after giving effect to the
changes in pricing for the Products that resulted in the B. Braun Revenue Share
Percentage Adjustment request by Vyteris hereunder. If B. Braun and Vyteris are
unable to agree upon a mutually satisfactory arbitrator to resolve their
disagreement regarding a fair and equitable B. Braun Revenue Share Percentage
Adjustment, such arbitrator shall be selected pursuant to and in accordance with
the procedures established by the American Arbitration Association. Any
agreement between B. Braun and Vyteris with respect to a B. Braun Revenue Share
Percentage Adjustment pursuant hereto, whether by mutual agreement or in
accordance with the arbitration procedures established hereby, shall be set
forth in an addendum to this Agreement, which shall be reasonably satisfactory
to B. Braun and Vyteris. Notwithstanding anything contained in this Section
3.5(e) to the contrary, (i) a B. Braun Revenue Share Percentage Adjustment shall
remain in effect only for the Measurement Period immediately following the
Completed Measurement Period for which Vyteris provided notice, and (ii) after
the expiration of such Measurement Period, the B. Braun Revenue Share Percentage
shall immediately and automatically revert to the B. Braun Revenue Share
Percentage set forth in this Agreement (without regard to any adjustment thereto
made under this Section 3.5(e)). Nothing contained in this Section 3.5(e) or
elsewhere in this Agreement shall, in any manner or respect, restrict or affect
the ability of B. Braun to establish the prices at which it sells Products in
the Territory; it being understood and agreed that B. Braun shall have the sole
and exclusive right, in its sole discretion, to establish such prices.

                3.6 DELIVERY; TITLE; PACKAGING AND LABELING.

                        (a)     All shipments of Products shall be made F.O.B.
Fairlawn, New Jersey. Vyteris shall arrange shipments to ensure that the
Products are received on the Delivery Date set forth in a purchase order. Title
to the Products and risk of loss with respect thereto shall pass to B.Braun upon
B. Braun's receipt of the Products. B.Braun shall be responsible for the cost of
all freight, shipping and handling, and insurance in connection with all
deliveries.

                (b)     In connection with the delivery of the Products by
Vyteris to B.Braun hereunder, Vyteris covenants and agrees to furnish the
following information to B.Braun concurrently with each shipment of Products:

                                      -23-
<PAGE>

                        (i) During the first Contract Year, at B. Braun's
request, Vyteris shall furnish to B.Braun copies of the batch records and
certificates of analysis with respect to the Products being delivered;

                        (ii) During each subsequent Contract Year, Vyteris shall
furnish to B.Braun a certificate of analysis in the form of Exhibit "3.6"
attached hereto and made a part hereof with respect to the Products being
delivered; and

                        (iii) Any and all information relating or pertaining to
the information required to be furnished under clauses (i) and (ii) above as
B.Braun may reasonably request at any time and from time to time.

                3.7 ACCEPTANCE.

                        (a)     B.Braun shall have the right to reject any
shipment (or portion thereof) of Products which do not conform, in all respects,
with the Specifications.

                        (b)     After receipt of any Product, B.Braun shall have
forty-five (45) days to examine such Product to determine if it conforms to the
Specifications and if it is free from defects in material and workmanship, and,
on the basis of such examination, to accept or reject such shipment (or portion
thereof). Any Products not rejected within such forty-five (45) day period shall
be deemed accepted by B.Braun. Any claims for failure to so conform or for such
defects shall be made in writing by B.Braun to Vyteris, indicating the
non-conforming characteristics of the Products. The acceptance or deemed
acceptance of the Products under this Section 3.7(b) shall not be deemed a
waiver or limitation in any manner or respect of the representations and
warranties made by Vyteris hereunder with respect to such Products.

                        (c)     With respect to any Product which has been
rejected by B.Braun, Vyteris shall, at its expense, replace the Product as soon
as practical and promptly reimburse B.Braun for insurance, duties, freight
charges and other costs incurred by B.Braun with respect to such rejected
Product.

                3.8 PRODUCT WARRANTIES; INSPECTION RIGHTS; AND OTHER
REPRESENTATIONS AND COVENANTS.

                        (a)     Vyteris hereby represents and warrants to
B.Braun that Products delivered under this Agreement shall (i) be free from
defects in design, material and workmanship and in compliance, in all respects,
with the Specifications, (ii) not be adulterated or misbranded within the
meaning of the FDCA or within the meaning of any applicable state or municipal
law in which the definitions of adulteration and misbranding are substantially
the same as those contained in the FDCA, (iii) be new, unused and fit for the
purposes intended thereby, and (iv) be manufactured in accordance with the
applicable provisions of the cGMP and /or QSR.

                        (b)     Vyteris hereby represents and warrants that both
Vyteris and the facilities at which the Products will be manufactured are, or
will be, registered with the FDA pursuant to and in accordance with the
applicable provisions of Title 21, Parts 207 and 807.

                                      -24-
<PAGE>

                        (c)     Vyteris represents and warrants that it has
prepared, or will prepare, the NDA Filing and the 510(k) Filing pursuant to and
in all material respects in accordance with all applicable laws, rules and
regulations (and related Agency requirements applicable thereto) and, without
limiting the generality of the foregoing, to the best of the knowledge,
information and belief of Vyteris, the NDA Filing and the 510(k) Filing include
all data and information required under and pursuant to the applicable
provisions of Title 21 CFR Parts 314,312 and 807.

                        (d)     Vyteris represents and warrants that its
facilities are in substantial compliance with all applicable laws, rules and
regulations and that Vyteris will take the actions set forth in Exhibit 3.8
attached hereto and made a part hereof in an effort to obtain a satisfactory
pre-approval inspection by the district office of the FDA that will enable such
office to make a recommendation to the Center of Drug Evaluation and Research
that the NDA Filing be approved.

                        (e)     Vyteris represents, warrants and covenant to
B.Braun that it shall, at all times, comply in all material respects with all
applicable laws, rules and regulations and standards applicable to manufacturing
and labeling of the Products, and B.Braun represents, warrants and covenant to
Vyteris that it shall, at all times, comply in all material respects with all
applicable laws, rules and regulations and standards applicable to the
marketing, distribution and sale of the Products.

                        (f)     Upon and after the receipt of the required
Agency approval and clearance to market and sell the Products in the USA
Territory, Vyteris represents and warrants that the Products will be included
under either the NDA or the 510(k) Clearance, or both, as applicable. Vyteris
shall be responsible for compliance with all Agency requirements relating to the
NDA Filing and 510(k) Filing and shall maintain the NDA and the 510(k) Clearance
for the Products during the Term and the Post-Termination Period. Vyteris
covenants and agrees to provide B.Braun for its review and comment any proposed
modifications, supplements, changes or revision to the foregoing approvals and
clearances prior to any submission of such modifications, supplement, change or
revision to such approvals and clearances.

                        (g)     B.Braun shall have the right, at its own
expense, and at reasonable times and intervals, and in a reasonable manner, to
conduct periodic inspections of the facilities at which the Products are
manufactured to determine if the Products are manufactured in accordance with
the Specifications, and in compliance in all material respects with the
applicable provisions of the cGMP and QSR.

                        (h)     Vyteris shall furnish to B.Braun, upon request
by B.Braun, information regarding any Agency audits of the facility(ies) at
which the Products are manufactured, inspectional observations (Form FDA 483),
warning letters, or recall notices received that relate directly to the Products
supplied by Vyteris hereunder. Vyteris will immediately notify B.Braun and
forward written copies of any future inspectional observations (Form FDA 483),
warning letters or recall notices for the Products received or produced by
Vyteris or the entity that manufactures the Product.

                                      -25-
<PAGE>

                        (i)     Vyteris shall comply in all material respects
with all applicable MDR and ADR requirements. A copy of each report submitted by
Vyteris to FDA pursuant to the MDR or ADR requirements shall be delivered to
B.Braun at least two (2) business days prior to its submission to the FDA.

                        (j)     Within two (2) years after the Effective Date,
Vyteris shall file for, or take such other steps as are required to formally
commence the process for seeking, certification by a notified body that the
facilities at which the Products are manufactured are in compliance with the
Medical Device Directives such that Vyteris may be granted a "CE" mark to allow
B.Braun to market and sell the Products in the European Economic Community.
Vyteris and B.Braun shall thereafter cooperate and use best efforts to ensure
that such certification is granted. B.Braun and Vyteris shall share equally all
costs of filing and other governmental fees associated with seeking CE
certification for a Product. The preceding sentence shall not be construed in
any manner to require B. Braun to bear any costs or expense associated with
Vyteris obtaining certifications of compliance of the facilities at which the
Products are manufactured.

                        (k)     During the Term and the Post-Termination Period,
Vyteris shall furnish B.Braun with copies of any and all correspondence
submitted by or on behalf of Vyteris relating or pertaining to the Products to
the FDA and/or any other Agency, within five (5) days following such submission
by Vyteris.

                        (l)     All representations and warranties made by the
parties in this Section 3.8, and elsewhere in this Agreement, shall survive the
parties' execution and delivery of, and performance under, this Agreement

                3.9 PRODUCT COMPLAINTS AND RECALLS; ADVERSE DRUG EXPERIENCE
REPORTS.

                        (a)     B.Braun shall be responsible for interfacing
with its customers regarding all Product complaints and inquiries. All
documentation and information received by B. Braun concerning such complaints
and inquiries shall be promptly provided by B. Braun to Vyteris. B.Braun shall
cooperate fully with Vyteris to conduct reasonable investigations to evaluate
the complaint or inquiry. B.Braun shall be responsible for contacting its
customers for the purpose of such investigations. Vyteris shall provide
reasonable technical support to B.Braun for investigating complaints. Any
investigation conducted by B.Braun shall be completed within ten (10) days after
receipt of the complaint and all results of the investigation shall be promptly
forwarded to Vyteris. Vyteris shall be solely responsible for the filing of any
reports pursuant to the MDR or ADR requirements. If Vyteris receives any
information regarding adverse reactions or defects of the Products, Vyteris
shall promptly inform B.Braun thereof. Each party shall reasonably cooperate
with the other in sharing any information that may constitute an adverse
experience or complaint related to the Products and shall designate a
representative responsible for the exchange of such information.

                        (b)     B.Braun shall have the right to reasonably
declare any recall of, or field corrective action to, any Products supplied by
Vyteris after consultation with Vyteris. In the event of any such recall or
field corrective action directly attributable to a breach of the representations
and warranties provided by Vyteris hereunder, Vyteris shall be responsible for
the costs and expenses incurred by B.Braun in connection therewith.

                                      -26-
<PAGE>

                SECTION 4. CURRENCY, RECORDS, INSPECTION RIGHTS AND RELATED
MATTERS.

                4.1 CURRENCY. All payments made pursuant to this Agreement shall
be in Dollars ($). To the extent Net Sales are made in currencies other than
Dollars ($), such Net Sales shall, for purposes of this Agreement, be converted
to Dollars ($) by reference to the appropriate exchange rate in effect on the
last business day of the applicable calendar quarter, as published in the WALL
STREET JOURNAL (Eastern Edition) (or any successor publication).

                4.2 RECORDS; EXAMINATION RIGHTS. Each party shall at all times
during the Term and the Post-Termination Period maintain complete and accurate
books and records with respect to any and all transactions relating and
pertaining to this Agreement (including, without limitation, Net Sales). In
connection therewith, each party shall have the right, at its expense and upon
not less than fourteen (14) days' advance written notice to the other party, to
inspect and examine the books and records of such party relating and pertaining
to Net Sales and B.Braun Revenue Share Payments or Vyteris Revenue Share
Payments, as the case may be, for and with respect to the immediately preceding
three (3) year period (to the extent not previously examined by a party
hereunder) for the sole and exclusive purpose of verifying the accuracy of the
calculation of such Revenue Share Payments during such period; PROVIDED,
however, (i) any inspection and examination by a party under this Section 4.2
shall be conducted during normal business hours by the party's accountant (who
shall be reasonably acceptable to the other party), (ii) such accountant shall,
prior to entering the premises for such purpose, be required to execute and
deliver a confidentiality agreement (in form and substance reasonably
satisfactory to the other party), and (iii) no more than one inspection and
examination may be conducted by a party under this Section 4.2 during any
Contract Year. The party conducting the audit shall bear all expenses of such
audit, except as hereinafter set forth. In the event that an examination
pursuant hereto reveals an error in the payment of royalties due hereunder, such
error shall be corrected by the refund from or payment to the party, as
appropriate, of the difference in immediately available funds. In the event that
an audit conducted pursuant hereto reveals an underpayment of more than five
percent (5%), the party whose books and records are being audited and that bears
responsibility for the underpayment shall pay the reasonable costs of conducting
such audit.

                                      -27-
<PAGE>

                SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.

                5.1 REPRESENTATIONS AND WARRANTIES OF VYTERIS. Vyteris
represents and warrants to B.Braun as follows:

                        (a)     Vyteris is a corporation organized and validly
existing under the laws of the State of Delaware and has all requisite corporate
power and authority to enter into and legally perform its obligations under this
Agreement without any approvals not heretofore obtained or contemplated hereby.

                        (b)     When executed and delivered, this Agreement
shall constitute the valid and binding obligation of Vyteris, legally
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy or insolvency laws.

                        (c)     The execution and delivery of, and performance
under, this Agreement will not violate or contravene any provision of any
existing law, rule or regulation or decree of any court, governmental authority,
bureau or agency having jurisdiction over Vyteris or of the articles or
certificate of incorporation or by-laws of Vyteris or of any mortgage,
indenture, security agreement, contract, license (including the BC&D License
Agreement), undertaking or agreement to which Vyteris is a party or by which any
of the Licensed Property is subject.

                        (d)     Vyteris is the sole owner (or licensee with
respect to the License Rights) of the entire right, title and interest in and
to, and has the sole and exclusive right, without any restrictions, to license
the Licensed Property, and there are no outstanding assignments, grants,
licenses, sublicenses, liens, security interests, pledges, encumbrances, claims,
obligations or agreements, affecting Vyteris, Affiliates of Vyteris, or any of
the Licensed Property, whether written, oral or implied, which are inconsistent
with the terms of this Agreement, except for the security interest in the Patent
Rights heretofore granted by Vyteris as security for convertible promissory
notes of Vyteris, as more fully described on Exhibit "5.1(d)" attached hereto
and made a part hereof (the "Permitted Encumbrance").

                        (e)     All right, title and interest relating or
pertaining to the Permitted Encumbrance is under and subject to the rights of
B.Braun under this Agreement and the holder(s) of the Permitted Encumbrance have
acknowledged the foregoing and agreed not to disturb, interfere or impair any
right of B.Braun under this Agreement pursuant to and in accordance with the
provisions of the agreement more fully described on Exhibit "5.1(e)" attached
hereto and made a part hereof.

                        (f)     Vyteris knows of no circumstances and has not
committed and will not commit any acts, that are inconsistent with the terms or
purposes of this Agreement or which infringe or lessen any of the Patent Rights,
the Technology or other Licensed Property intended to be licensed to B.Braun
hereunder. The foregoing shall not, however, be interpreted to prevent Vyteris
from amending claims of pending or later filed patent applications with the
Patent Rights as it deems necessary to define patentable subject matter.

                                      -28-
<PAGE>

                        (g)     Vyteris does not own or control any patent
applications, patents or other restrictive rights, or other potential
restrictive rights, other than the Patent Rights and Technology that would be
infringed by or otherwise interfere with B. Braun's ability to import, make,
have made, use, offer to sell, or sell any goods comprising or incorporating a
transdermal lidocaine delivery system.

                        (h)     To the best of the knowledge, information and
belief of Vyteris, (i) except as disclosed on Exhibit "5.1(h)" attached hereto
and made a part hereof, no third party claim of invalidity or enforceability, in
whole or in part, has been asserted against or with respect to the Patent Rights
and (ii) the manufacture, market and sale of the Products by B. Braun will not
infringe any intellectual property rights of any third party.

                        (i)     To the best of the knowledge, information and
belief of Vyteris, after reasonable inquiry of its outside patent counsel as to
its existing knowledge, information and belief, the Patent Rights are valid and
enforceable.

                        (j)     (i) The BD&C License Agreement is in full force
and effect on the date hereof; (ii) neither Vyteris nor BD&C is in default under
the BD&C License Agreement; (iii) Vyteris has the right to license the License
Rights to B.Braun under and pursuant to the provisions of this Agreement and is
not required to provide notice to or obtain the consent of BD&C in connection
therewith; (iv) no event, circumstance or condition has occurred or exists as of
the date hereof which could impair any of the License Rights (including, without
limitation, the ability of B.Braun to exploit the License Rights in the manner
contemplated hereby); and (v) a true, correct and complete copy of the BD&C
License Agreement has been delivered on this date by Vyteris to B.Braun, which
has been certified by an authorized officer of Vyteris.

                        (k)     Except as otherwise disclosed in the PPM or any
Supplements thereto provided to B.Braun, no actions, suits or proceedings before
any court or governmental department or agency are pending or, to the best of
the knowledge, information and belief of Vyteris, threatened (i) against Vyteris
with respect to any of the transactions contemplated by this Agreement or (ii)
against or affecting Vyteris or any of the Licensed Property (or any other
properties or assets of Vyteris) that, if adversely determined, could reasonably
be expected to have a material adverse effect upon the financial condition of
Vyteris or the ability of Vyteris to perform its duties and obligations under
this Agreement.

                        (l)     To the best of the knowledge, information and
belief of Vyteris, except as set forth on Exhibit 5.1(l) (i) all of the
statements, data, and information contained in the PPM were accurate and
complete, in all material respects as of March 4, 2002, and are accurate and
complete, in all material respects as of the date hereof, and (ii) all of the
statements, data, and information contained in the Supplement to the PPM dated
June 25, 2002 were accurate and complete, in all material respects as of June
25, 2002, and are accurate and complete, in all material respects, as of the
date hereof.

                        (m)     Vyteris ratifies and confirms the truth,
accuracy and completeness of all other representations and warranties contained
in this Agreement (including, without limitation, the representations and
warranties relating and pertaining to the Products set forth in Section 3.8
hereof).

                                      -29-
<PAGE>

                        (n)     Neither this Agreement nor any Exhibit hereto
contains any untrue statement of material fact or omits to state a material fact
required to be stated in order to make such statement or document not
misleading.

                5.2 REPRESENTATIONS AND WARRANTIES OF B.BRAUN. B.Braun
represents and warrants to Vyteris as follows:

                        (a)     B.Braun is a corporation organized and validly
existing under the laws of Commonwealth of Pennsylvania and has all requisite
corporate power and authority to enter into and legally perform its obligations
under this Agreement without any approvals not heretofore obtained or
contemplated hereby.

                        (b)     When executed and delivered, this Agreement
shall constitute the valid and binding obligation of B.Braun, legally
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy or insolvency laws.

                        (c)     The execution and delivery of, and performance
under, this Agreement will not violate or contravene any provision of any
existing law, rule or regulation or decree of any court, governmental authority,
bureau or agency having jurisdiction over B.Braun or of the articles of
incorporation or by-laws of B.Braun or of any mortgage, indenture, security
agreement, contract, license, undertaking or agreement to which B.Braun is a
party or by which any of its properties or assets are subject.

                        (d)     No actions, suits or proceedings before any
court or governmental department or agency are pending or, to the best of the
knowledge, information and belief of B.Braun, threatened (i) against B. Braun
with respect to any of the transactions contemplated by this Agreement or (ii)
against or affecting B.Braun or any of its properties or assets that, if
adversely determined, could reasonably be expected to have a material adverse
effect upon the financial condition of B.Braun or the ability of B.Braun to
perform its duties and obligations under this Agreement.

                5.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the parties hereto in Sections 5.1 and
5.2 shall be deemed to be continuing in nature and shall survive the execution,
delivery and performance of this Agreement.

        SECTION 6. INSURANCE, INDEMNIFICATION, TERM, TERMINATION RIGHTS.

                6.1 INSURANCE; INDEMNIFICATION.

                        (a)     During the Term and for a period of six (6)
years after the expiration of the Post-Termination Period, each party shall
obtain and/or maintain, at its sole cost and expense, product liability
insurance that satisfies the following requirements:

                        (i) the insurance shall name the other party as an
        additional insured and shall insure the other party against all
        liability related to the Products (whether the liability arises from a
        party's own conduct or by virtue of its participation in this
        Agreement), including liability for bodily injury, property damage,
        wrongful death, but

                                      -30-
<PAGE>

        excluding liability for infringement of any third party patent or other
        intellectual property right;

                        (ii) the insurance shall be in amounts, respectively,
        that are reasonable and customary in the United States of America for
        pharmaceutical manufacturing companies of comparable size and
        activities, but in no event less than Five Million Dollars ($5,000,000)
        per occurrence and Twenty-Five Million Dollars ($25,000,000) in the
        aggregate; and

                        (iii) Each party shall furnish to the other party
        certificates evidencing this insurance and shall provide the other party
        at least thirty (30) days' prior written notice of cancellation or
        material modification of such insurance, all of which shall be
        satisfactory, in form and substance, to such party.

                        (b)     Vyteris hereby indemnifies and agrees to defend
and hold B.Braun and BBM AG, and their respective affiliates, officers,
directors, agent and employees (individually and collectively, "B.Braun
Parties") harmless from and against any and all damages, liabilities, penalties,
losses or expenses including, without limitation, legal fees, arising out of or
relating to any claims, actions, demands or proceedings asserted by a third
party (individually and collectively, a "Claim") which results from or arises
out of (i) the breach of any warranty, representation or agreement of Vyteris in
this Agreement, (ii) any infringement claims relating to the manufacture, use,
marketing, distribution or sale of the Products or the Licensed Property, (iii)
the death of, or bodily injury to, any Person on account of the use of any of
the Products, excluding, however, those Claims for which B.Braun has provided
indemnification under clause (iv) of Section 6.1(c) hereof, or (iv) a product
recall or field correction of any Product by any Agency or B.Braun (other than a
recall that is due to or results from the manner in which B.Braun markets and
sells the Products).

                        (c)     B.Braun hereby indemnifies and agrees to defend
and hold Vyteris, its officers, directors, managers, agents and employees and
their successors and assigns (individually and collectively, "Vyteris Parties")
harmless from and against any and all damages, liabilities, penalties, losses or
expenses including without limitation, legal fees arising out of or relating to
any third party Claim resulting from or arising out of (i) the breach of any
warranty, representation or agreement of B.Braun in this Agreement including,
without limitation, any such breach relating to the marketing, sale or
distribution of any Product by B.Braun, (ii) the death of, or bodily injury to,
any Person on account of the use of any of the Products resulting from the
manner in which B.Braun markets or sells the Products, (iii) a product recall or
field correction of any Product by any Agency due to or resulting from the
manner in which B.Braun markets, sells or labels the Product; or (iv) the
manufacture, use, distribution or sale of the Products manufactured by B.Braun
in connection with the efforts undertaken by or on behalf of B.Braun to exploit
the license granted by Vyteris to B.Braun under Section 2.1(a)(ii) hereof after
the occurrence of a Triggering Event other than (A) Claims that any such
manufacture, use distribution or sale of Products and the use of the Licensed
Property by B.Braun in connection therewith constitutes an infringement on the
patent rights, intellectual property rights or proprietary rights of the
claimant or a misappropriation of trade secrets of the claimant, or (B) Claims
resulting from any breach of the representations and warranties made by Vyteris
in this Agreement.

                                      -31-
<PAGE>

                        (d)     Upon receiving notice of any Claim under this
Section 6.1, the indemnified party shall notify the indemnifying party in
writing within ten (10) business days following receipt of the notice; PROVIDED,
HOWEVER, that the right of an indemnified party to be indemnified hereunder in
respect of Claims shall not be adversely affected by a failure to give such
notice, unless, and then only to the extent that an indemnified party is
materially prejudiced thereby.

                        (e)     The indemnifying party shall undertake and
control the defense thereof by reputable counsel chosen by it, subject to the
approval of the indemnified party, which consent shall not be unreasonably
withheld or delayed. The indemnified party shall be entitled to retain separate
co-counsel at its sole cost and expense and participate in the defense of a
claim; PROVIDED, HOWEVER, the indemnifying party shall be responsible for the
reasonable cost and expense of counsel to the indemnified party if, in the
reasonable opinion of the indemnified party, representation of the interests of
both the indemnified party and the indemnifying party could reasonably be
expected to create a conflict of interest and written notice thereof is
furnished by the indemnified party to the indemnifying party. If any Claim is
asserted and the indemnifying party fails to contest and defend such Claim
within a reasonable period of time after the indemnified party's notice is
given, then the indemnified party may take such reasonable action in connection
therewith as the indemnified party deems necessary or desirable, including
controlling the defense of such claim, subject to the provisions of Section
6.1(f) hereof, and retaining counsel of its own choosing with the reasonable
costs and expenses of such defense being borne by the indemnifying party. The
reimbursement for all reasonable costs and expenses incurred by an indemnified
party pursuant to this Section 6.1(e) shall be paid as and when incurred within
thirty (30) days after receipt of an invoice therefor.

                        (f)     If requested by the indemnifying party, the
indemnified party agrees to cooperate with the indemnifying party and its
counsel. The indemnified party shall not settle or compromise such claim without
the prior written consent of the indemnifying party, which consent shall not be
unreasonably withheld. At the request of the indemnifying party, the indemnified
party shall settle a Claim; PROVIDED, HOWEVER, that (i) such settlement involves
only the payment of monetary damages and no injunctive relief binding on the
indemnified party, and such monetary damages are paid by the indemnifying party,
(ii) the indemnified party does not admit any liability, and (iii) the
indemnified party is released from all further liability with respect to such
Claim.

                        (g)     The obligations of the parties hereto under this
Section 6.1 shall survive any termination or expiration of this Agreement until
the expiration of all applicable statutes of limitation that could apply to any
actions, claims, proceedings or demands that could be asserted by a third party.

                6.2 TERM.

                        (a)     Subject to the terms of Section 6.3 hereof, this
Agreement shall commence on the date hereof and shall remain in full force and
effect for a term of ten (10) years from the Commercial Start Date (the "Initial
Term"). Each party shall notify the other in writing at least twelve (12) months
prior to the expiration of the Initial Term of their respective interest, if
any, in extending this Agreement beyond the Initial Term. If both parties
express interest in

                                      -32-
<PAGE>

extending this Agreement beyond the Initial Term, the parties agree to negotiate
in good faith an extension to the Agreement.

                        (b)     Notwithstanding the provisions of Section 6.2(a)
hereof, B.Braun shall have the right, in its sole discretion, to extend this
Agreement beyond the Initial Term (an "Extension Period") for an additional term
of five (5) years or such other period as may be agreed to in writing by the
parties, on the same terms and conditions as set forth herein by providing
written notice to Vyteris prior to the expiration of the Term, so long as
B.Braun has purchased Products during the Initial Term in an aggregate amount
equal to at least the Minimum Product Purchase Requirements for the Initial
Term.

                        (c)     If for any reason other than as a result of a
Default by B.Braun under this Agreement, the Commercial Start Date does not
commence on or before August 1, 2006, B.Braun shall have the right, for a period
of sixty (60) days thereafter, to terminate this Agreement, without liability or
obligation to Vyteris, upon written notice to Vyteris.

                6.3 TERMINATION.

                        (a)     Notwithstanding the provisions of Section 6.2
hereof, a non?defaulting party shall have the option, in addition to all other
legal and equitable rights and remedies available to it hereunder, to terminate
this Agreement effective immediately, or upon the expiration of any applicable
cure period, in the event of a "Default" by the other party (as defined below)
if written notice of the defaulting activity has been given to the party in
default.

                        (b)     The term "Default" shall mean any of the
following events:

                        (i)     A failure by Vyteris to supply B.Braun with
Products pursuant to and in accordance with the provisions of Section 3.1 hereof
that is not cured within thirty (30) days following receipt by Vyteris of
written notice from B.Braun of such failure; PROVIDED, HOWEVER, if (A) such
failure occurs during the first four (4) years following the Commercial Start
Date and results from circumstances beyond the reasonable control of Vyteris and
not directly or indirectly as a result of obligations of Vyteris to supply
Products to Persons other than B.Braun (an "Excusable Supply Failure"), and (B)
Vyteris provides B.Braun with written notice and evidence, in form and substance
reasonably satisfactory to B.Braun, that the failure is an Excusable Supply
Failure within fifteen (15) days following receipt by Vyteris from B.Braun of
such failure (an "Excusable Supply Failure Notice"), then Vyteris shall have the
right, which shall be exercised in the notice from Vyteris to B.Braun provided
pursuant to this paragraph (B), to extend the thirty (30) day cure period set
forth in this Section 6.3(b)(i) in accordance with the following procedure: (1)
Vyteris shall furnish to B.Braun a written plan (the "Supply Continuation Plan")
within thirty (30) days following B. Braun's receipt of the Excusable Supply
Failure Notice setting forth the actions that Vyteris shall take to cure the
Excusable Supply Failure as soon as commercially possible following the
occurrence of the failure giving rise to the notice from B.Braun to Vyteris
under this Section 6.3(b)(i), (2) the Supply Continuation Plan shall be subject
to the review and approval by B.Braun, which shall not be unreasonably withheld,
conditioned or delayed, (3) following B. Braun's review and approval of the
Supply Continuation Plan, no amendments, modifications or

                                      -33-
<PAGE>

changes shall be made thereto without the prior written consent and approval of
B.Braun, it being understood and agreed that B.Braun shall in good faith
consider, but shall have no obligation to approve, any reasonable request by
Vyteris for such an amendment, modification or change so long as the rights and
interests of B.Braun are not adversely affected thereby, and (4) Vyteris shall
not be considered in Default under this Section 6.3(b)(i) as a result of the
Excusable Supply Failure if the Supply Continuation Plan is approved by B.Braun
and Vyteris fulfills all of its supply and related obligations under the Supply
Continuation Plan within the time periods provided thereby. Vyteris shall use
its best efforts to cure any Excusable Supply Failure. Vyteris shall be
considered in Default under this Section 6.3(b)(i) if Vyteris fails to perform
any of its obligations under the Supply Continuation Plan in a manner reasonably
satisfactory to B.Braun and such failure is not cured by Vyteris to the
reasonable satisfaction of B.Braun within fifteen (15) days following receipt by
Vyteris of written notice of such failure by B.Braun;

                        (ii)    excluding events covered by clause (i) of this
        Section 6.3(b) above a failure by Vyteris or B.Braun to comply with or
        perform any material provision of this Agreement or the Securities
        Purchase Agreements and such failure remains uncured for thirty (30)
        days following written notice of the defaulting activity from the
        non-defaulting party to the defaulting party; or

                        (iii)   a party is unable to pay its debts as they
        mature, is the subject of a petition in bankruptcy whether voluntary or
        involuntary or of any other proceeding under bankruptcy, insolvency or
        similar laws, makes an assignment for the benefit of creditors, is named
        in, or its property is subject to, a suit for the appointment of a
        receiver.

                        (c)     Vyteris recognizes, acknowledges and agrees that
the exclusive license rights granted by Vyteris to B.Braun pursuant to the
provisions of Section 2.1(a) hereof, notwithstanding the provisions of Section
2.1(b) hereof, are granted and exist as of this date and may be retained by
B.Braun under Section 365(n)(1)(B) of the Bankruptcy Code in the event that
Vyteris or a trustee on its behalf elects, and is permitted, to reject this
Agreement as an executory contract under Section 365(a) of the Bankruptcy Code.

                6.4 EFFECT OF TERMINATION.

                        (a)     Subject to the provisions of Sections 6.4(c) and
6.5(a) hereof, upon expiration or termination of this Agreement for whatever
reason, B.Braun shall cease use, in any manner or for any purpose, directly or
indirectly, of any Trademark used to identify the Products or any marks or
symbols deceptively similar thereto, as well as of all Sales Literature,
advertising and promotional labeling and materials relative to the Products.

                        (b)     The expiration or termination of this Agreement
shall not affect B. Braun's obligation to pay any amount accruing to Vyteris
under the provisions of this Agreement while it was in effect or the obligation
of Vyteris to pay any amount accruing to B.Braun under the provisions of this
Agreement while it was in effect. Any termination of this Agreement pursuant to
Section 6.3(a) hereof shall not affect the parties' liabilities to each other
for breach of this Agreement.

                                      -34-
<PAGE>

                        (c)     During the Post-Termination Period, B.Braun
shall have the non-exclusive right to continue to purchase the Products at the
Purchase Prices and on the other terms and conditions contained in the Agreement
for sale by B.Braun to those customers to whom B.Braun had entered into
contracts to sell Products prior to the expiration or termination of this
Agreement (a "Contracted Customer"). The "Post-Termination Period" shall mean
the period that commences on the expiration or termination date of this
Agreement and concludes, with respect to sales to each Contracted Customer, on
the date that is the first to occur of: (i) the expiration or termination of the
contract with such Contracted Customer; or (ii) four (4) years after such
expiration or termination date of this Agreement.

                6.5 TRIGGERING EVENT. Notwithstanding anything contained in this
Agreement to the contrary, upon the occurrence of a Triggering Event and a
decision by B.Braun to exploit the license granted by Vyteris to B.Braun under
Section 2.1(a)(ii) hereof as permitted by Section 2.1(b) hereof:

                        (a)     The license granted by Vyteris to B.Braun under
Section 2.1(a)(ii) hereof and the rights granted by Vyteris to B.Braun under
Section 2.1(h) hereof shall be for a perpetual term subject, however, to all
other conditions of this Agreement (as modified by this Section 6.5), including,
without limitation, the revenue share provisions of Section 3.5(a) hereof.

                        (b)     The rights of Vyteris under Sections 2.1(c),
2.1(d), 2.1(e), 2.1(g), 3.1(e), 3.1(f), 3.2(b)(iii), 3.2(d) and 3.5(e) hereof
shall cease and terminate and be of no further force or effect.

                        (c)     The obligations of B.Braun under Section 2.1(g),
3.1(a), 3.2(b)(iii), 3.2(d) and 3.5(e) hereof shall cease and terminate and be
of no further force or effect.

                        (d)     Vyteris shall transfer, assign and convey all of
its right, title and interest in and to the NDA, the NDA Filing, the 510(k)
Clearance and/or the 510(k) Filing, to the extent permitted under applicable
laws, rules and regulations, if and to the extent such transfer, assignment and
conveyance, in the reasonable opinion of B.Braun, is necessary for B.Braun to
fully exploit and realize upon the license granted by Vyteris to B.Braun under
Section 2.1(a)(ii) hereof.

                        6.6     CHANGE IN CONTROL TRANSACTION. In the event that
Vyteris is a party to a Change in Control Transaction in which Vyteris or the
business or assets of Vyteris that is subject to the Change in Control
Transaction is acquired or becomes subject to the control, directly or
indirectly, of a competitor of B.Braun engaged in the business of developing,
manufacturing, marketing or selling medical products or services following the
Change in Control Transaction, then at B. Braun's option (which shall be
exercised by serving on Vyteris written notice of such exercise of rights), (i)
the rights of Vyteris under Sections 2.1(c), 2.1(d), 2.1(e), 2.1(g),
3.2(b)(iii), 3.2(d) and 3.5(e) hereof shall cease and terminate and be of no
further force or effect, (ii) the obligations of B.Braun under Sections 2.1(g),
2.4, 3.2(b)(iii), 3.2(d), and 3.5(e) hereof, shall cease and terminate and be of
no further force or effect, (iii) the cure and related rights of Vyteris
contained in the proviso to Section 6.3(b)(i) hereof (including, without
limitation, the right of Vyteris to claim an Excusable Supply Failure, issue an
Excusable Supply Failure Notice and submit a Supply Continuation Plan in
connection with a failure by Vyteris to

                                      -35-
<PAGE>

supply B.Braun with Products pursuant to and in accordance with the provisions
of Section 3.1 hereof) shall cease and terminate and be of no further force or
effect, (iv) the provisions of this Agreement shall be deemed to be modified and
amended to take into account the provisions of this Section 6.6 and (v) at the
request of B. Braun, Vyteris shall enter into a modification and amendment to
this Agreement to reflect the foregoing, which modification and amendment shall
be reasonably satisfactory, in form and substance, to B. Braun and Vyteris.

                SECTION 7. RIGHTS OF FIRST REFUSAL; CONFIDENTIALITY, COVENANTS
AND MISCELLANEOUS PROVISIONS.

                7.1 RIGHTS OF FIRST REFUSAL.

                        (a)     If prior to the commencement of or during the
Term Vyteris develops or invents any non-invasive transdermal drug delivery
system (including a Competitive Product) that is used as a topical anesthesia
which is not a Product Development and which it desires to market, sell and
distribute to third parties (a "New Topical Anesthesia Product"), Vyteris shall
provide B.Braun with prompt written notice of the New Topical Anesthesia
Product, which notice shall include: (i) a detailed description of the New
Topical Anesthesia Product (including, without limitation, a description of any
and all Industrial Property and other technology used in connection therewith),
and (ii) a detailed description and summary of the research and development
costs incurred by Vyteris as of the date of such notice relating solely and
exclusively to the New Topical Anesthesia Product and a description and summary
of such additional research and development costs that Vyteris projects that it
will incur after the date of such notice. B.Braun shall have the right and
option (but not the obligation), which right shall be exercised by written
notice to Vyteris within thirty (30) days after its receipt of the notice from
Vyteris referred to in the immediately preceding sentence and any other
information that B.Braun may request with respect to the New Topical Anesthesia
Product in connection therewith, to market, sell and distribute the New Topical
Anesthesia Product in the Territory on the same terms and conditions as are
contained in this Agreement (including, without limitation, the grant of an
exclusive license in and to all Industrial Property and other technology
relating and pertaining to the New Topical Anesthesia Product); provided,
however, that B.Braun and Vyteris shall negotiate in good faith the (x) B.Braun
Revenue Share Percentage for Net Sales of the New Topical Anesthesia Product by
B.Braun, and (y) amount and percentage to be paid by B.Braun to Vyteris for
research and development costs that have been or will be incurred by Vyteris
relating to the New Topical Anesthesia Product and referred to in clause (ii) of
the first sentence of this Section 7.1(a), which payment shall be made
concurrently with the exercise of B. Braun's rights hereunder with respect to
research and development costs already incurred by Vyteris and within thirty
(30) days after a request therefor by Vyteris (and detailed description thereof)
with respect to research and development costs incurred thereafter. In the event
that the parties are unable to reach agreement with respect to the amounts and
percentages referred to in the preceding clauses (x) and (y), they shall submit
the issues to binding arbitration by a single arbitrator having industry
experience, in which the arbitrator is authorized to determine such amounts and
percentages so as to ensure an appropriate level of profitability to each party
necessary to sustain a viable business, based on industry standards and
comparables. Such arbitrator shall be chosen by mutual agreement of the parties,
or, failing such agreement, in accordance with the procedures of the American
Arbitration Association. In the event that B.Braun elects not to exercise its
rights under this Section 7.1(a) with respect to any New Topical Anesthesia
Product, B.Braun shall retain its rights under this Section 7.1(a) with respect
to any other New Topical Anesthesia Product. In the event that B.Braun elects to
exercise its rights under this Section 7.1(a) with respect to any New

                                      -36-
<PAGE>

Topical Anesthesia Product, the parties hereto shall enter into a new license,
development and distribution agreement with respect thereto incorporating the
terms and conditions herein set forth.

                        (b)     Prior to entering into any contract, agreement,
understanding or arrangement (verbal or written) with respect to the sale,
transfer, licensing, marketing, exploitation and/or distribution of any type of
drug delivery system used for the treatment of systemic pain management
manufactured, developed or acquired by Vyteris, and the patents, intellectual
property, technology or other rights, ideas, concepts or interests derived
therefrom or relating thereto (each such new systemic pain management product
for the delivery of a specific drug a "Systemic Pain Management Product"),
Vyteris shall first furnish written notice to B.Braun setting forth, in
reasonable detail, the desire of Vyteris to exploit, or cause the exploitation
of, each such Systemic Pain Management Product. Vyteris shall thereafter, if
B.Braun requests, consider in good faith, on a non-exclusive basis
simultaneously with discussions with any interested third party, any proposal by
B.Braun regarding the terms and conditions of an agreement under which, if
agreed, B.Braun would be granted the exclusive right to exploit such Systemic
Pain Management Product. Vyteris shall not be obligated to negotiate exclusively
with B.Braun for any time period, and shall have the right, following the
provision of notice to B.Braun under this Section 7.1(b), in its sole
discretion, to enter into an agreement with a third party at any time.

                7.2 CONFIDENTIALITY AND RELATED COVENANTS.

                        (a)     During the Term and for a period of five (5)
years thereafter, each receiving party agrees to hold in confidence, and to
refrain from using, distributing, disseminating, or disclosing to others, any
Confidential Information of the other party, or from making or causing to be
made, or selling or distributing, any product embodying Confidential Information
of the disclosing party, except for the purposes described in this Agreement, as
contemplated hereby or as otherwise permitted by the disclosing party.

                        (b)     Distribution of Confidential Information by the
receiving party after receipt thereof shall be limited to those employees of the
receiving party who have agreed to keep such information confidential pursuant
to the provisions hereof (the "Recipients"). The receiving party shall have the
obligation of assuring that its Recipients are aware of the confidential nature
of such information and that its Recipients are subject to no less stringent
nondisclosure and nonuse obligations with respect to any such Confidential
Information. Each receiving party shall be liable to the disclosing party for
any failure by its Recipients to adhere to the covenants and restrictions in
this Section 7.2.

                        (c)     The restrictions set forth in this Section 7.2
shall not apply to information that: (i) the receiving party proves was derived
from information in the public domain; (ii) becomes a part of the public domain
through no fault of the receiving party; (iii) the receiving party proves was in
its possession prior to the disclosure of the information by the disclosing
party; (iv) the receiving party acquires the information outside of the
relationship

                                      -37-
<PAGE>

between the parties to this Agreement from a third party that is under no
obligation of confidence to a disclosing party; or (v) is proven to be
independently developed by a receiving party.

                        (d)     In the event that the receiving party becomes
legally compelled (such as by order of court, administrative agency or other
governmental body) to disclose Confidential Information of the disclosing party,
the receiving party shall provide the disclosing party with prompt written
notice of such order or obligation, and to the extent possible, an opportunity
to seek a protective order or other appropriate means to preserve the
confidentiality of the Confidential Information. In the event no such order is
issued or no such challenge is undertaken or such challenge is unsuccessful,
only that portion of the Confidential Information which is legally required to
be disclosed shall be disclosed. The receiving party agrees that such disclosure
shall not cause any of the Confidential Information that was not required to be
disclosed to fall within any exception set forth in Section 7.2 hereof.

                        (e)     Notwithstanding anything contained herein to the
contrary, the covenants and agreements of the parties hereto contained in this
Section 7.2 shall survive for a period of five (5) years following the
termination or expiration of this Agreement.

                        (f)     The parties hereto expressly agree that a breach
of any of the terms and conditions of this Section 7.2 would result in
irreparable damage to the non-breaching party and money damages may be an
insufficient remedy. Accordingly, in the event of a breach or threatened breach
by either party hereto, or by any agent or advisors of either party hereto of
any of the provisions of this Section 7.2, and in addition to any other remedy
provided herein or by law or in equity, the non-breaching party shall be
entitled to appropriate injunctive relief in any court of competent
jurisdiction.

                7.3 MISCELLANEOUS.

                        (a)     Force Majeure. If either party is prevented from
complying, either totally or in part, with any of the terms or provisions of
this Agreement, by reason of a fire, flood, explosion, storm, strike, lockout or
other labor trouble, riot, war, terrorist actions, rebellion, or accidents (a
"Force Majeure Event"), then, upon written notice by the party liable to perform
to the other party, the requirements of this Agreement or such of its provisions
as may be affected (excluding, however, any obligation to pay money) and to the
extent so affected, shall be suspended during the period of such Force Majeure
Event; provided, that the party asserting a Force Majeure Event shall bear the
burden of establishing the existence of the Force Majeure Event by clear and
convincing evidence, shall use its best efforts to remove the Force Majeure
Event, shall continue performance with the utmost dispatch whenever such causes
are removed, and shall notify the other party of the Force Majeure Event not
more than ten (10) calendar days from the time of the event; PROVIDED, HOWEVER,
that the party not asserting the Force Majeure Event shall have the right, upon
payment of all sums due and owing under this Agreement, to terminate the
Agreement upon written notice to the party asserting force majeure if the Force
Majeure Event continues for more than one hundred twenty (120) days.

                        (b)     Notices. All written notices or other written
communications required under this Agreement shall be deemed properly given when
provided to the parties entitled thereto by personal delivery (including
delivery by commercial services such as

                                      -38-
<PAGE>

messengers and airfreight forwarders), by electronic means (such as by
electronic mail, telex or facsimile transmission) or by mail sent registered or
certified mail, postage prepaid at the following addresses (or to such other
address of a party designated in writing by such party to the others):

         Vyteris:

                               Vyteris Inc.
                               13-01 Pollitt Drive
                               Fair Lawn, NJ  07410
                               Attn:  PresidentE-mail:

                               Lowenstein Sandler, P.C.
                               65 Livingston Avenue
                               Roseland, N.J.  07068
                               Attn:  Peter H. Ehrenberg, Esquire

         B.Braun:

                               B.Braun Medical Inc.
                               824 Twelfth Avenue
                               Bethlehem, PA  18018-0027
                               Attn:  General Counsel
                               E-mail:  charles.dinardo@bbmus.com

All notices given by electronic means shall be confirmed by delivering to the
party entitled thereto a copy of said notice by certified or registered mail,
postage prepaid, return receipt requested. All written notices shall be deemed
delivered and properly received upon the earlier of two (2) days after mailing
the confirmation notice or upon actual receipt of the notice provided by
personal delivery or electronic means.

                        (c)     Subject Headings. The subject headings of the
paragraphs of this Agreement are included solely for purposes of convenience and
reference only, and shall not be deemed to explain, modify, limit, amplify or
aid in the meaning, construction or interpretation of any of the provisions of
this Agreement.

                        (d)     Amendments. Except as otherwise specified
herein, no supplement, modification or amendment of any term, provision or
condition of this Agreement (including this Section) shall be binding or
enforceable unless evidenced in a writing executed by the parties hereto.

                        (e)     Entire Agreement and Waiver. This Agreement
contains the entire agreement between the parties hereto and supersedes all
prior and contemporaneous agreements, arrangements, negotiations and
understandings between the parties hereto, relating to the subject matter
hereof. There are no other understandings, statements, promises or inducements,
oral or otherwise, contrary to the terms of this Agreement. No representations,
warranties, covenants or conditions, express or implied, whether by statute or
otherwise, other than as set forth herein,

                                      -39-
<PAGE>

have been made by any party hereto. No waiver of any term, provision, or
condition of this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or shall constitute, a waiver of any other
provision hereof, whether or not similar, nor shall such waiver constitute a
continuing waiver, and no waiver shall be binding unless executed in writing by
the party making the waiver.

                        (f)     Successors and Assigns. Neither party hereto may
assign either this Agreement or any of its rights hereunder without the written
consent of the other party hereto first obtained (which consent shall not be
unreasonably withheld) and any attempted assignment without such written consent
shall be void and confer no rights upon any third party. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective representatives, successors and
permitted assigns. Notwithstanding the foregoing, (i) B.Braun shall have the
right, upon advance notice to but without any requirement to obtain the consent
of Vyteris, to assign and delegate its rights and obligations under this
Agreement to a United States-based Affiliate of B.Braun, and (ii) subject to
Section 6.6 hereof, either party may assign and delegate its duties under this
Agreement, upon advance notice to but without any requirement to obtain the
consent of the other party, to a purchaser or successor-in-interest to its
business in connection with a merger, consolidation or sale of all or
substantially all of such party's assets.

                        (g)     Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

                        (h)     Applicable Law. This Agreement shall be governed
by and construed and enforced in accordance with and subject to the law of the
Commonwealth of Pennsylvania without regard to conflict of laws principles.

                        (i)     Disputes/Cure/Arbitration. The parties shall
attempt in good faith to resolve any controversy or claims arising out of or
relating to this Agreement or any breach hereof promptly through negotiations
between their senior executives who have authority to settle the same. If the
matter is not resolved through negotiation within sixty (60) days of notice by a
party to the others of the controversy or claim, the parties shall attempt in
good faith to resolve the controversy or claim through a non-binding mediation
in Philadelphia County, Pennsylvania, under the Commercial Mediation Rules of
the American Arbitration Association. If the matter is not resolved through
mediation within sixty (60) days of initiation of such procedure, or if any
party fails or refuses to participate in the mediation, the controversy or claim
shall be finally settled by binding arbitration to be conducted as follows:

                        (i)     The arbitration shall be conducted in
        Philadelphia County, Pennsylvania, in accordance with the Commercial
        Arbitration Rules and Supplementary Procedures for International
        Commercial Arbitration of the American Arbitration Association. Process
        may be served in the manner in which notices may be given as provided in
        Section 7.3(b) hereof.

                                      -40-
<PAGE>

                        (ii)    There shall be three (3) arbitrators who shall
        be selected by agreement of the parties, or failing agreement on the
        selection; they shall be selected in the manner determined by the
        American Arbitration Association.

                        (iii)   The arbitration panel shall determine the
        matters in controversy in accordance with the internal laws of the
        Commonwealth of Pennsylvania, without giving effect to the principles of
        conflict of laws thereof. Any award in such arbitration shall be final
        and binding upon the parties, and judgment upon the award rendered by
        the arbitrators may be entered in any court having jurisdiction thereof.
        Any award shall be promptly payable in Dollars ($).

                        (j)     Custom. The parties to this Agreement shall have
the right at all times to enforce the provisions contained in this Agreement,
and in all other agreements and documents required or provided for herein, in
strict accordance with the terms thereof, notwithstanding any custom or practice
in the area or any conduct or continuing conduct on the part of either party
hereto to the contrary unless expressly agreed to in writing. The failure of
either party hereto, at any time or from time to time, to enforce any of its
rights under any provision herein, strictly in accordance with the same, shall
not be construed as varying the terms hereof, in any way or manner, contrary to
the specific provisions of this Agreement or be construed as modifying or
waiving such provision.

                        (k)     Relationship of Parties. The relationship
between Vyteris and B.Braun as established by this Agreement is that of
independent contractors. As such, subject to the provisions of this Agreement,
Vyteris and B.Braun each will conduct their respective business at their own
initiative, responsibility and expense, and each will have no authority to incur
any obligation on behalf of the other.

                        (l)     Confidentiality. In addition to the covenants
set forth in Section 7.2 hereof, the parties hereto agree that the existence,
terms and conditions of this Agreement are confidential and shall not be
disclosed by any party hereto to any other Person without the prior written
consent of the disclosing party first obtained except that the receiving party
shall have the right to disclose such information to professional advisors,
lenders, financial advisors, potential investors or acquirers, any potential
suppliers or other vendors to whom such disclosure is reasonably necessary for
the purpose of establishing creditworthiness, obtaining advice or such other
purposes as may be necessary and proper, of the receiving party provided such
parties are aware of the confidential nature of such information and agree to
keep such information confidential to the same extent as required of the
receiving party hereunder; PROVIDED, HOWEVER, a party (a "Disclosing Party")
shall provide the other party advance written notice of any disclosure of the
other party's confidential information to be made by the Disclosing Party
pursuant hereto and, upon the other party's request after a determination by the
other party that such disclosure could adversely affect its business interests,
shall require the recipient of any such information to enter into a standard and
customary confidentiality agreement containing terms and conditions which are
reasonably acceptable to the other party. Neither party shall issue any press
release or public statement regarding this Agreement or the subject matter
hereof without the prior written approval of the other party, which shall not be
unreasonably withheld, conditioned or delayed.

                                      -41-
<PAGE>

                        (m)     Reformation/Severability. If any provision of
this Agreement (including, without limitation, the covenants and agreements set
forth in Section 7.2 hereof) is declared invalid by any tribunal, then such
provision shall be deemed automatically adjusted to the minimum extent necessary
to conform to the requirements for validity as declared at such time and, as so
adjusted, shall be deemed a provision of this Agreement as though originally
included herein. In the event that the provision invalidated is of such a nature
that it cannot be so adjusted, the provision shall be deemed deleted from this
Agreement as though such provision had never been included herein. In either
case, the remaining provisions of this Agreement shall remain in effect.

                        (n)     Limitation of Liability. EXCEPT AS OTHERWISE SET
FORTH IN SECTION 6.1 (b) and (c) HEREOF, ABSENT A WILLFUL OR INTENTIONAL BREACH
OF THIS AGREEMENT, NEITHER PARTY BE LIABLE TO THE OTHER FOR INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES INCLUDING WITHOUT LIMITATION, LOST
BUSINESS, PROFITS OR DAMAGES ARISING FROM OR CONNECTED WITH LOST, DAMAGED OR
ALTERED DATA OR LOSS OF GOODWILL.

                        (o)     Schedules/Exhibits. The following Schedules and
Exhibits (as attached hereto and as and when amended) are incorporated into, and
are an integral part of, this Agreement:

                                      -42-
<PAGE>

Exhibit 1.2(A)     Development Plan

Exhibit 1.2(B)     Knowledge of Vyteris

Exhibit 1.2(C)     Description of License Rights

Exhibit 1.2(D)     Marketing Plan

Exhibit 1.2(E)     Minimum Product Purchase Requirements (Foreign Territory)

Exhibit 1.2(E-1)   Minimum Product Purchase Requirements (USA Territory)

Exhibit 1.2(E-2)   Minimum Product Purchase Requirements required to extend Term

Exhibit 1.2(F)     Patent Rights

Exhibit 1.2(G)     Pricing Schedule

Exhibit 1.2(H)     Product Description

Exhibit 1.2(I)     Specifications

Exhibit 1.2(J)     Trademarks

Exhibit 1.2(K)     Vyteris Revenue Share Percentage

Exhibit 2.1        Sub-Markets

Exhibit 3.1        Capacity Plan

Exhibit 3.2        Samples

Exhibit 3.5(e)     Minimum Average Selling Price

Exhibit 3.6        Form of Certificate of Analysis

Exhibit 3.8        Pre-Approval Inspection Plan

Exhibit 5.1(d)     Permitted Encumbrance

Exhibit 5.1(e)     Agreement with Holder(s) of Permitted Encumbrance

Exhibit 5.1(h)     Pending Patent Rights Proceedings

Exhibit 5.1(l)     Exceptions to PPM

                                      -43-
<PAGE>

                IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written by
persons duly authorized.

                            VYTERIS, INC.

                            By:/s/ Vince Decaprio
                               -------------------------------------------------
                                     Name:  Vince DeCaprio
                                     Title:  President

                            B. B. BRAUN MEDICAL INC.

                            By:  /s/ Brad Lane
                               -------------------------------------------------
                                     Name:  Brad Lane
                                     Title:  Director of Marketing, Pain Control

                                      -44-
<PAGE>

                                 EXHIBIT 1.2(A)
                                DEVELOPMENT PLAN

The plan outlined below represents target dates as of the Agreement date.
Incremental changes to the plan are expected and will be communicated in a
timely manner to both parties.

<TABLE>
<CAPTION>
<S>                                                                            <C>
--------------------------------------------------------------------- -------------- ----------- -------------
TASK                                                                    DURATION       START        FINISH
--------------------------------------------------------------------- -------------- ----------- -------------
                                                                           [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
NDA/FDA/510(k)                                                             [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Correct formatting issues cited by FDA                            [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
QC/QA all clinical study datasets                                          [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Verify compliance of NDA to electronic                            [*]          [*]          [*]
         submission guidance
--------------------------------------------------------------------- -------------- ----------- -------------
         Revalidate statistical analyses of all clinical
         data                                                              [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         File the NDA with the FDA                                         [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         File the 510(k) with the FDA                                      [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Patch Materials Development                                                [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Complete development of hydrogel and
         conductive ink coating processes                                  [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Write and approve Development Reports                             [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Patch Mfg Process Development                                              [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Complete three 21K-Patch Scale-Up Runs                            [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Optimize the CPAL-12 machine                                      [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Controller Development                                                     [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Approve revised controller design                                 [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Prepare drawings and specifications                               [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Select vendor(s) for controller components                        [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Assemble components and test first 1000
         controllers                                                       [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Materials Qualification/Vendor Contracts                                   [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Conduct vendor qualifications for custom
         materials                                                         [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
         Negotiate supply agreements with customer
         material vendors                                                  [*]          [*]          [*]

--------------------------------------------------------------------- -------------- ----------- -------------
Validation Programs (Facility, Manufacturing,
Analytical                                                                 [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Methods, and Network                                                       [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Quality Systems/cGMP compliance/Training                                   [*]          [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Commercialization Schedule***                                                                        [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Ready for Preapproval Inspection***                                                                  [*]
--------------------------------------------------------------------- -------------- ----------- -------------
NDA Declared "Approvable" (assume 14 mo.
Review)***                                                                                           [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Labeling Receives Final Approval from FDA***                                            [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                            <C>

Labels Made and Patches Labeled***                                                      [*]          [*]
--------------------------------------------------------------------- -------------- ----------- -------------
Commercial Launch of Product (Commercial Start
Date)***                                                                                             [*]
</TABLE>

***Assumptions. Actual dates will depend on actions of regulatory bodies
including the Food and Drug Administration

                                       -2-
<PAGE>

                                 EXHIBIT 1.2(B)

All individuals identified as being part of the management of Vyteris in the
PPM, as follows:

         Vincent DeCaprio, Ph.D.              Vice Chairman, President

         Michael McGuinness                   Chief Financial Officer and
                                              Treasurer

         James Garrison                       Vice President, Business
                                              Development

         George Baskinger                     Manager of Regulatory Compliance
                                              and Quality Management

         Donald Farley                        Chairman of the Board

                                       -3-
<PAGE>

                                 EXHIBIT 1.2(C)

                          DESCRIPTION OF LICENSE RIGHTS

mark rights, service names and service name rights, brand names and brand name
rights. inventions, processes, formulae, copyrights and copyright rights, trade
dress, product names, logos, slogans, designs, trade secrets, know how,
industrial models, proprietary data. methodologies, computer programs and
software (including all source codes but excluding shrink-wrapped software) and
related 'documentation, technical information, manufacturing, engineering and
technical drawings, know-how, inventions, works of authorship, and all pending
applications for and registrations of patents, trademarks, service marks and
copyrights, now owned or licensed by Becton and developed in respect of the
Becton Iontophoresis R&D Program (including all intellectual property listed on
Schedule 3.06 hereto), including all forms (e.g., electronic media, computer
disks) in which such items are recorded; provided, however, that "Transferred
Intellectual Property" shall not include any intellectual property licensed to
NEWCO pursuant to Section 2.01(c)(ii) hereof.

(aaa) "Transitional Services Agreement" means the agreement to facilitate the
orderly transfer of Iontophoresis Systems to NEWCO to be entered into by Becton
and NEWCO substantially in the form of Exhibit G hereto, as such may be amended
from time to time.

(bbb) "Upfront Payment" means a cash payment received by NEWCO in connection
with the execution of any agreement relating to the commercial development,
promotion, manufacture, marketing, sale or distribution of any lontophoresis
Product that is designated as pre-paid royalties, including payments that either
(i) may later be credited against royalties due to NEWCO on net sales of such
Iontophoresis Product pursuant to such agreement or (ii) are intended to be a
lump-sum payment in lieu of royalties that would otherwise be payable to NEWCO
on sales of such Iontophoresis Product pursuant to such agreement; provided,
however, that "Upfront Payment" shall not include research grants or contract
research fees received by NEWCO.

(ccc) "VMA Plan" has the meaning set forth in Section 8.09 hereof, substantially
in the form of Exhibit H hereto.

(ddd) "WARN" means the Worker Adjustment Retraining and Notification Act, as
amended.

2.      TRANSACTIONS AND CLOSING.

2.01.   Terms of Contemplated Transactions. Upon the terms and subject to the
conditions set forth in this Agreement, the parties hereby agree that
immediately prior to (in respect to clause (a) below) or at the time of (in
respect to clauses (b) through (g) below) the Closing:

                                       -4-
<PAGE>

(a)     NEWCO shall have filed Certificates of Designations with the Secretary
of State of the State of Delaware establishing the terms of (i) the Series A
Preferred Stock substantially in the form of Exhibit I-1 hereto and (ii) the
Series B Preferred Stock (as defined in Section 4.08 hereof) substantially in
the form of Exhibit I-2 hereto;

(b)     Becton shall convey, transfer and deliver to NEWCO the Contributed
Assets, free and clear of all Liens (other than Permitted Liens), and NEWCO will
assume and agree to pay, perform and/or discharge the Assumed Liabilities;

(c)     (i)      Becton shall assign to NEWCO all direct or indirect right,
title and interest of Becton in, to and under the Transferred Intellectual
Property pursuant to the Intellectual Property Assignments, free and clear of
all Liens (other than Permitted Liens), and, subject to Sections 6.01 and 6.02
hereof, NEWCO and Becton hereby agree that NEWCO grants to Becton a perpetual,
worldwide, royalty free, fully-paid, non-exclusive right and license to the
Transferred Intellectual Property solely to make, have made, offer for sale,
sell, use and import any products or systems other than Iontophoresis Systems.
This license granted pursuant to this Section 2.01(c)(i) shall be assignable and
transferable only in the event of: (A) the transfer or sale of Becton's business
to which such license pertains, (B) Becton's merger or consolidation with or
acquisition by another Person or (C) the transfer or sale to a wholly-owned
subsidiary.

        (ii)    Effective immediately after Closing, Becton shall grant to NEWCO
a perpetual, worldwide, exclusive right and license to the intellectual property
identified on Schedule 2.01(c)(ii) hereto, as well as under any corresponding
foreign patents and applications claiming priority thereto, solely to make, have
made, offer for sale, sell, use and import Iontophoresis Systems. No royalty in
addition to the Royalties provided under Section 8.05 hereof shall be charged to
NEWCO for the right and license granted under this Section 2.01(c)(ii). The
license granted pursuant to this Section 2.01(c)(ii) shall be assignable and
transferable only in the event of (A) the transfer or sale of NEWCO's business
to which such license pertains, (B) NEWCO's merger or consolidation with or
acquisition by another Person or (C) the transfer or sale to a wholly-owned
subsidiary.

        (iii)   In connection with the transactions described in Sections
2.01(c)(i) and (ii) hereof, NEWCO shall agree to make the Royalty payments to
Becton pursuant to, and in accordance with, Section 8.05 hereof.

(d)     Spencer Trask Specialty Group and/or its Affiliates shall provide at
least $9,000,000 in cash to NEWCO in exchange for the issuance by NEWCO of
3,000,000 restricted shares of Series B Preferred Stock and 6,000,000 restricted
shares of Common Stock, which shares shall, upon issuance, be duly authorized,
fully paid and non-assessable shares of the capital stock of NEWCO;

(e)     In exchange for the conveyance, transfer, delivery and assignment of the
Contributed Assets contemplated by Section 2.01(b) hereof, NEWCO shall issue
333,333 restricted shares of Series A Preferred Stock and 666,667 restricted
shares of Common

                                       -5-
<PAGE>

Stock to Becton, which shares shall, upon issuance, be duly authorized, fully
paid and non-assessable shares of the capital stock of NEWCO;

(f)     Becton and NEWCO shall execute and deliver the Sublease and the
Transitional Services Agreement; and

(g)     NEWCO, Becton, Spencer Trask Specialty Group and any other holder(s) of
NEWCO capital stock shall execute and deliver the Stockholders Agreement.

2.02.   Closing. The closing (the "Closing") of the Contemplated Transactions
will take place at the offices of Kirkpatrick & Lockhart LLP, 1251 Avenue of the
Americas, 45th Floor, New York, New York 10020, on November 10, 2000, or on such
other date and at such

                                       -6-
<PAGE>

                              SCHEDULE 2.01(C)(II)

                                LICENSE TO NEWCO

[*]

                                       -7-
<PAGE>

1 Becton Drive
Franklin Lakes, New Jersey D7417 td: 201.847.6800
www.bd.com

March 19, 2002

Indispensable to
James M. Garrison, VP, Business Development
13-01 Pollitt Drive
Fair Lawn, New Jersey 07410

Re: BDTS - Drug Delivery Technologies Dear Jim:

        In accordance with your discussion earlier today with Allen Wark, this
letter will clarify and confirm the fact that the license granted under
Paragraph 2.01(c)(ii) of the Transaction Agreement among Becton, Dickinson and
Company ("BD"), Spencer Trask Specialty Group, LLC, Spencer Trask Ventures, Inc.
and Drug Delivery Technologies, Inc., now known as Vyteris, Inc. ("Vyteris")
dated November 10, 2000, includes the right to grant sublicenses to Vyteris'
customers to offer for sale, sell, use or import lontophoresis Systems made by
or for Vyteris.

Please do not hesitate to contact me if you have any questions.

                                           Very truly yours,

                                           /s/ David Highet, Esq.
                                           ----------------------
                                           David W. Highet, Esq.
                                           Vice President and Chief Intellectual
                                           Property Counsel St (201) 847-5317
                                           (201) 848-9228
                                           AW W\Doc#51334
                                           Becton. Dickinson and Company

                                       -8-
<PAGE>

                                 EXHIBIT 1.2(D)

                                 MARKETING PLAN

MARKET PLAN SUMMARY

VYTERIS(R) TRANSDERMAL
LIDOCAINE DELIVERY SYSTEM

AUGUST 2002

CONFIDENTIAL

                                       -9-
<PAGE>

OUTLINE

o        Introduction

o        Product Overview

o        Market Overview

         o        Current Landscape

         o        Target Opportunities

         o        Competitive Situation

o        Selling Strategies

         o        Salesforce Deployment

         o        Pricing

         o        Product Complements

         o        Training

         o        Unit/Revenue Projections

                                      -10-
<PAGE>

OUTLINE

o        Promotional Strategies

         o        Product Identity

         o        Tradeshows

         o        Direct mail

         o        Advertising

         o        Internet

         o        Public Relations

         o        Literature/Sales Aides

o        Product Management

o        Distribution

         o        Packaging

         o        Channels

         o        International

                                      -11-
<PAGE>

INTRODUCTION

o       Following an extensive technology evaluation started March 2001, B.
        Braun Medical desires to distribute the transdermal lidocaine delivery
        system from Vyteris, Inc. The evaluation revealed a product concept
        which fits well within the current scope of B. Braun products and call
        points. In addition, the technology compliments B. Braun's focus on
        providing customers a broad offering of safety related infusion
        products.

o       The following Market Plan Summary describes the pre-launch and launch
        activities associated with introduction of the lidocaine delivery
        system.

                                      -12-
<PAGE>

PRODUCT OVERVIEW

o       The transdermal lidocaine delivery system from Vyteris provides
        non-invasive delivery of lidocaine using the process of iontophoresis.
        The product provides a safe, innovative method to eliminate pain
        associated with needle puncture.

o       The initial target group is pediatrics, however, market research shows a
        high probability of rapid product expansion into other areas of the
        hospital. In addition, substantial opportunities exist in the outpatient
        market.

                                      -13-
<PAGE>

PRODUCT OVERVIEW

IONTOPHORESIS:

o       Defined as non-invasive, controlled, programmable transdermal delivery
        of charged drug molecules with the aid of low electric current

o       Advantages & Capabilities

        o       Expands the range of drugs available for transdermal delivery

        o       Enhanced skin transport

        o       Rapid onset/offset

        o       Controllable & programmable

        o       Smooth & continuous plasma level

                                      -14-
<PAGE>

PRODUCT OVERVIEW

o       Product Name = to be determined

o       Lidocaine (w/epinephrine)

o       Active area is 5cm2 circle

o       Onset time = 10 minutes

o       Depth of anesthesia = 6-10 mm

o       Duration of anesthesia = ~30 min

o       Controller

        o       wearable, reusable up to 100 times

        o       simple to use, pre-programmed

o       Patch

        o       single use, disposable, pre-filled

                                      -15-
<PAGE>

MARKET OVERVIEW

CURRENT LANDSCAPE:

o       The transdermal lidocaine delivery system will aide healthcare workers
        in complying with new standards on pain management included in the
        2000-2001 Joint Commission standards manuals:

        "JCAHO SURVEYORS HAVE BEGUN ASSESSING COMPLIANCE SINCE THE NEW STANDARDS
        TOOK EFFECT JANUARY 1, 2001. JCAHO S NEW PAIN MANAGEMENT STANDARDS WERE
        WELCOMED BY CLINICIANS, PAIN EXPERTS, PATIENTS, AND THEIR FAMILIES WHO
        HAVE SEEN PAIN GO UNTREATED OR UNDERTREATED FOR DECADES."

                                      -16-
<PAGE>

MARKET OVERVIEW

CURRENT LANDSCAPE:

o       The transdermal lidocaine delivery system will also healthcare workers
        in complying with the new joint consensus guidelines released from the
        American Pain Society and American Academy of Pediatrics in September
        2001:

        "Local anesthetics and strategies to soothe and minimize distress should
        be considered even for simple procedures, such as venipuncture."

                                      -17-
<PAGE>

MARKET OVERVIEW

CURRENT LANDSCAPE:

o       Recent published studies support the concept of iontophoresis as a
        superior means for decreasing pain:

        AANA JOURNAL, June 2001- "iontophoresis is the superior method for
        decreasing pain associated with peripheral IV cannulation".

        REGIONAL ANESTHESIA AND PAIN MEDICINE, June 2001- "evaluation of the
        depth of anesthesia reveals that IP is superior to the other techniques
        studied".

                                      -18-
<PAGE>

MARKET OVERVIEW

[*]

                                      -19-
<PAGE>

MARKET OVERVIEW

[*]

                                      -20-
<PAGE>

SELLING STRATEGIES

[*]

                                      -21-
<PAGE>

SELLING STRATEGIES

SALESFORCE DEPLOYMENT:

In order to focus on the primary product applications and call points previously
discussed, B. Braun will utilize it's current distributor network to cover areas
outside the Hospital, ASC, Home Health, Oncology Centers and EMS as follows:

--------------------------- ------------------------- --------------------------
   CURRENT DISTRIBUTION          APPROX. NUMBER               CALL POINTS
--------------------------- ------------------------- --------------------------
         McKesson               450 Primary Care          Physician's Office
--------------------------- ------------------------- --------------------------
        Alliegence              260 Primary Care          Physician's Office
--------------------------- ------------------------- --------------------------
            PSS                 650 Primary Care          Physician's Office
--------------------------- ------------------------- --------------------------
       Henry Schein              95 Telesellers           Physician's Office
                                250 Primary Care
--------------------------- ------------------------- --------------------------

                                      -22-
<PAGE>

SELLING STRATEGIES

PRODUCT COMPLEMENTS:

o       B. Braun offers a wide variety of IV infusion products which will help
        pull-through transdermal patch sales. The following are currently sold
        by both the ITS and CCTM salesforces:

        o       IV Catheters

        o       IV Start Kits

        o       Huber Needles

        o       PICC's

        o       Infusion Pumps

        o       Infusion Sets

                                      -23-
<PAGE>

SELLING STRATEGIES

[*]

                                      -24-
<PAGE>

PROMOTIONAL STRATEGIES

PRODUCT IDENTITY:

o       A product trade name will be established following completion of a
        signed agreement between Vyteris and B. Braun. A branding company will
        be employed to help identify and finalize a product trademark. It is
        anticipated the trademark will be displayed on packaging, the controller
        and possibly on the patch. Primary product identity will focus on the
        trade name with secondary focus on the company name (B. Braun). Vyteris
        and it's technology brands will be incorporated into B. Braun branding
        strategies.

                                      -25-
<PAGE>

PROMOTIONAL STRATEGIES

TRADESHOWS:

o       Tradeshow attendance will be a major focus, both in the pre-launch and
        post-launch phases. Activities associated with some, but not all
        tradeshows, will include pre-show direct mail, tradeshow booth graphics,
        literature, promotional give-away and educational symposiums. The
        following are anticipated tradeshows to be attended:

        o       American Academy of Pediatrics (AAP)

        o       Oncology Nursing Society (ONS)

        o       Intravenous Nursing Society (INS)

        o       Society of Pediatric Nurses (SPN)

        o       American Association of Nurse Anesthetists (AANA)

        o       Others as identified

        o       Will be focus product at minimum two pediatric shows during 1st
                year of launch

                                      -26-
<PAGE>

PROMOTIONAL STRATEGIES

[*]

                                      -27-
<PAGE>

PROMOTIONAL STRATEGIES

ADVERTISING:

o       In conjunction with ad agency, appropriate advertising channels will be
        identified and implemented. Primary activity will take place in the
        post-launch period. Potential options are as follows:

        o       Professional journals associated with target groups
                (Pediatricians, Nurses, etc.)

        o       Consumer magazines targeted at parents

        o       Physician's office informational pamphlets

                                      -28-
<PAGE>

PROMOTIONAL STRATEGIES

INTERNET:

o       Will establish a separate product website tied to the B. Braun homepage.
        Content will focus on promotion and product information. In addition,
        will contact appropriate professional societies (ONS, INS, SPN, AANA,
        etc.) to explore opportunities to help sponsor their websites in return
        for a link to the B. Braun homepage.

                                      -29-
<PAGE>

PROMOTIONAL STRATEGIES

PUBLIC RELATIONS:

o       Will work with current PR firm or acceptable substitute to generate
        press releases, video news release (if necessary) and other appropriate
        deliverables as identified by B. Braun and PR firm.

                                      -30-
<PAGE>

PROMOTIONAL STRATEGIES

LITERATURE / SALES AIDES:

o       Appropriate sales brochures will be developed utilizing B. Braun
        Graphics Department and/or ad agency. Sales aides such as demo kits,
        instructional CD's and promotional giveaways will also be developed and
        implemented.

                                      -31-
<PAGE>

PRODUCT MANAGEMENT

[*]

                                      -32-
<PAGE>

DISTRIBUTION

PACKAGING:

o       Following completion of agreement between B. Braun and Vyteris,
        packaging configurations will be determined. It is anticipated that both
        companies will provide input into final packaging options.

                                      -33-
<PAGE>

DISTRIBUTION

[*]

                                      -34-
<PAGE>

DISTRIBUTION

INTERNATIONAL:

o       Following U.S. product launch, current plans include international
        distribution by [*] (dependent upon capacity constraints). All orders to
        B. Braun international subsidiaries will be shipped from U.S. warehouse
        locations. B. Braun is represented in all major international markets.

                                      -35-
<PAGE>

B. BRAUN ACTIVITY TIMELINE

[*]

                                      -36-
<PAGE>

SELLING STRATEGIES

[*]

                                      -37-
<PAGE>

SELLING STRATEGIES

                                       [*]

                                      -38-
<PAGE>

                                 EXHIBIT 1.2(E)

            Minimum Product Purchase Requirements (Foreign Territory)

The Minimum Product Purchase Requirements for the Foreign Territory shall be
established pursuant to and in accordance with the provisions of this Exhibit
"1.2(E)." During the sixty (60) day period following the expiration of the
second Contract Year, the parties shall negotiate in good faith the amount of
the Minimum Product Purchase Requirements for the Foreign Territory for one or
more Contract Years. Any agreement reached by the parties with respect thereto
shall be reduced to writing and incorporated into this Agreement as an amended
and restated Exhibit "1.2(E)." If, however, the parties are unable to agree upon
the amount of the Minimum Product Purchase Requirements for the Foreign
Territory for a given Contract Year within such sixty (60) day period, either
party shall have the right, upon written notice to the other party, to submit
the matter to [IMS, Inc.] or any successor entity ("IMS") for determination, in
which event (i) IMS shall determine the Minimum Product Purchase Requirements
for the next succeeding Contract Year as soon as possible following such
submission based upon and determined by reference to such factors as IMS shall
deem relevant, (ii) the determination by IMS pursuant thereto shall be final and
binding upon the parties, and (iii) each of Vyteris and B.Braun shall pay
one-half of any costs or fees charged by IMS in connection with the foregoing.

Notwithstanding anything contained herein to the contrary, no further
amendments, modifications, adjustments or changes shall be made to the volume of
Product purchases representing the Minimum Product Purchase Requirements for the
foreign Territory in effect at the time of the occurrence of a Change in Control
Transaction described in Section 6.6 hereof; it being understood and agreed that
such volume of Product purchases shall constitute the Minimum Product Purchase
Requirements for the Foreign Territory following such Change in Control
Transaction without any further changes thereto.

                                      -39-
<PAGE>

                                EXHIBIT 1.2(E-1)
              MINIMUM PRODUCT PURCHASE REQUIREMENTS (USA TERRITORY)

The following is the minimum number of units of iontophoretic patch Products
required to be ordered by B. Braun during the first Four Contract Years to
maintain exclusivity in accordance with Section 3.1(f) of the Agreement.

------------------ --------------- -------------- -------------- ---------------
Contract Year 1    Q1              Q2             Q3             Q4
------------------ --------------- -------------- -------------- ---------------
                   133,500         144,500        173,000        185,000
------------------ --------------- -------------- -------------- ---------------
Total                                                            636,000
------------------ --------------- -------------- -------------- ---------------

------------------ --------------- -------------- -------------- ---------------
Contract Year 2    Q1              Q2             Q3             Q4
------------------ --------------- -------------- -------------- ---------------
                   247,500         255,000        305,000        332,500
------------------ --------------- -------------- -------------- ---------------
Total                                                            1,140,000
------------------ --------------- -------------- -------------- ---------------

------------------ --------------- -------------- -------------- ---------------
Contract Year 3    Q1              Q2             Q3             Q4
------------------ --------------- -------------- -------------- ---------------
                   398,750         498,750        498,750        498,750
------------------ --------------- -------------- -------------- ---------------
Total                                                            1,995,000
------------------ --------------- -------------- -------------- ---------------

------------------ --------------- -------------- -------------- ---------------
Contract Year 4    Q1              Q2             Q3             Q4
------------------ --------------- -------------- -------------- ---------------
                   748,125         748,125        748,125        748,125
------------------ --------------- -------------- -------------- ---------------
Total                                                            2,992,500
------------------ --------------- -------------- -------------- ---------------

For the fifth and subsequent Contract Years, the parties shall commence
good-faith negotiations of the Minimum Product Purchase Requirement for the USA
Territory at least six (6) months in advance of each Contract Year. If B. Braun
and Vyteris are unable to agree upon the Minimum Product Purchase Requirements
for the USA Territory within sixty (60) days prior to the commencement of such
Contract Year, either party shall have the right to submit the matter to binding
arbitration in which a single arbitrator having sufficient industry experience
and qualifications and reasonably satisfactory to B.Braun and Vyteris, shall be
authorized and directed to determine the Minimum Product Purchase Requirement
for such Contract Year. Such determination by the arbitrator shall be based upon
such factors that the arbitrator deems relevant in connection therewith
including, without limitation, the market for the Products in the USA Territory,
B.Braun's current sales in the USA Territory, and the competitive or alternative
products available in the USA Territory. If B. Braun and Vyteris are unable to
agree upon a mutually satisfactory arbitrator to resolve their disagreement,
such arbitrator

                                      -40-
<PAGE>

shall be selected pursuant to and in accordance with the procedures established
by the American Arbitration Association.

Notwithstanding anything contained herein to the contrary, no further
amendments, modifications, adjustments or changes shall be made to the volume of
Product purchases representing the Minimum Product Purchase Requirements for the
USA Territory in effect at the time of the occurrence of a Change in Control
Transaction described in Section 6.6 hereof; it being understood and agreed that
such volume of Product purchases shall constitute the Minimum Product Purchase
Requirements for the USA Territory following such Change in Control Transaction
without any further changes thereto.

                                      -41-
<PAGE>

                                EXHIBIT 1.2(E-2)

                      MINIMUM PRODUCT PURCHASE REQUIREMENTS

                             Required to Extend Term

               30,000,000 disposable iontophoretic patch Products

                                      -42-
<PAGE>

                                 EXHIBIT 1.2(F)

                                  PATENT RIGHTS

U.S. Patent No. 6,377,847 - Iontophoretic Drug Delivery Device and Reservoir and
Method of Making Same. (Expiration Date: April 23, 2020)

U.S. Patent No. 5,246,418 - Iontophoresis System Having Features For Reducing
Skin Irritation (Expiration Date: September 21, 2013)

U.S. Patent No. 5,873,850 -- Locking and Disfiguring Mechanism for an
Iontophoretic System (Expiration Date: February 23, 2019)

U.S. Patent No. 6,402,732 - Iontophoretic Drug Delivery Device Having High
Efficiency DC to DC Energy Conversion Circuit (Expiration Date: June 11, 2020)

U.S. Patent No. 6,385,488 - Circuits for Increasing the Reliability of an
Iontophoretic System (Expiration Date: May 20, 2019)

                            U.S. Patent Applications

U.S. Application No. 09/718,135 - Iontophoretic Drug Delivery Device Having
High-Efficiency DC-To-DC Energy Conversion Circuit - Response To Office Action
Filed 8/20/02

U.S. Application No. 10/127,333 -Method of Increasing the Reliability of
Iontophoresis System - Response to Missing Parts Due 9/9/02 with 2 Mo. Extension

U.S. Application No. 10/085,428 - Iontophoretic Drug Delivery Device and
Reservoir and Method Of Making Same - Awaiting Next Office Action

U.S. Application No. 09/610,563 - Shelf Storage Stable Iontophoresis
Reservoir-Electrode and Iontophoretic System Incorporating The
Reservoir-Electrode - Response To Office Action Filed 7/15/02

U.S. Application No. 09/897,698 - Shelf Storage Stable Iontophoresis
Reservoir-Electrode and Iontophoretic System Incorporating The
Reservoir-Electrode - Response To Office Action Filed 7/15/02

U.S. Application No. 09/584,453 - Medicament-Loaded Transdermal Reservoir and
Method For Its Formation - Pending. Application owned by Becton Dickinson & Co.
Vyteris has exclusive rights for iontophoresis

                                      -43-
<PAGE>

                              Foreign Patent Rights

DE Patent No. P69225387.4 - Iontophoresis System Having Features For Reducing
Skin Irritation

FR Patent No. EP (FR) 0 547 482 - Iontophoresis System Having Features For
Reducing Skin Irritation

GB Patent No. EP (GB) 0 547 482 - Iontophoresis System Having Features For
Reducing Skin Irritation

IT Patent No. 49781/BE/98 - Iontophoresis System Having Features For Reducing
Skin Irritation

JP Patent No. 2026059 - Iontophoresis System Having Features For Reducing Skin
Irritation

                           Foreign Patent Applications

EP Application No. 96930652.1 - Iontophoretic Drug Delivery Device Having
High-Efficiency DC-to-DC Energy Conversion Circuit, Awaiting First Office
Action; AT, BE, CH, DE, DK, ES, FI, FR, GB, GR, IE, IT, LU, MO, NL, PO And SE
Designated

DE Application No. 10025027.0 - Method of Increasing the Reliability of
Iontophoresis System Published - Request Exam By 5/20/07

FR Application No. 00136639 - Method of Increasing the Reliability of
Iontophoresis System - New assignment sent to foreign associate (FA)

FR Application No. 0006312 - Method of Increasing the Reliability of
Iontophoresis System - Search Requested; New Assignment Sent To FA

FR Application No. 0013645 Method of Increasing the Reliability of Iontophoresis
System -New Assignment Sent to FA

JP Application No. 2000-147,822 - Method of Increasing the Reliability of
Iontophoresis System - Published - Request Exam By 5/19/07

CA Application No. 2,364,414 - Iontophoretic Drug Delivery Device and Reservoir
and Method of Making Same - Assignment Documents Sent To FA on 6/14/02

EP Application No. 942763.4 -Iontophoretic Drug Delivery Device and Reservoir
and Method Of Making Same - Foreign Associate Instructed To File Preliminary
Amendments On 3/19/02

                                      -44-
<PAGE>

JP Application No. 2001-501303 - Iontophoretic Drug Delivery Device and
Reservoir and Method Of Making Same - Power Of Attorney Sent To Foreign
Associate On 1/25/02; Request Exam By 6/9/07

WO Application No. PCT/US01/20886 - Shelf Storage Stable Iontophoresis
Reservoir-Electrode and Iontophoretic System Incorporating the
Reservoir-Electrode - Filed Response To Written Opinion On 6/21/02; Instructions
On Nationalization Needed By 11/15/02

CA Application No. 2230813 - Iontophoretic Drug Delivery Device Having
High-Efficiency DC-to-DC Energy Conversion Circuit Filed - Request Exam By
8/28/03

WO Application No. PCT/01US01/17385 - Medicament-Loaded Transdermal Reservoir
and Method For Its Formation - Pending; Application owned by Becton Dickinson &
Co. Vyteris has exclusive rights for iontophoresis; Deadline For Nationalization
Is 11/30/02

                                      -45-
<PAGE>

                                 EXHIBIT 1.2(G)

                                PRICING SCHEDULE
Lidocaine Patches:

-------------------------------------- ---------------------
                [*]                            [*]
-------------------------------------- ---------------------
                [*]                            [*]
-------------------------------------- ---------------------
                [*]                            [*]
-------------------------------------- ---------------------
                [*]                            [*]
-------------------------------------- ---------------------
                [*]                            [*]
-------------------------------------- ---------------------
                [*]                            [*]
-------------------------------------- ---------------------
                [*]                            [*]
-------------------------------------- ---------------------

(1)     The Purchase Prices for the iontophoretic patch Products are reflected
on an aggregate cumulative basis such that upon the purchase by B.Braun during
any Contract Year of that unit that represents the first unit of a subsequent
Purchase Price traunche each unit thereafter will be purchased at the Purchase
Price reflected in such traunche. For example, if prior to the commencement of
the third Contract Year, B.Braun has purchased since the Commercial Start Date
in the aggregate [*] Products, the first unit purchased by B.Braun in Contract
Year 3 shall be at a Purchase Price of [*].

The Purchase Prices for the controller and component Products shall equal the
lesser of: (a) the Purchase Prices set forth in the chart below, or (b) the
actual price at which Vyteris purchases the controller and component Products
from a third party or the actual manufacturing costs incurred by Vyteris in
connection with the manufactures of the controller and component Products, as
the case may be.

---------------------------------------------- ---------------------------------
Contract Year                                  Purchase Price
---------------------------------------------- ---------------------------------
First and Second Contract Year                                    [*]
---------------------------------------------- ---------------------------------

If B. Braun and Vyteris are unable to agree upon the Purchase Prices for the
iontophoretic patch and controller and component Products after the expiration
of the relevant periods set forth above, either party shall have the right to
submit the matter to binding arbitration in which a single arbitrator having
sufficient industry experience and qualifications and reasonably satisfactory to
B.Braun and Vyteris, shall be authorized and directed to determine the Purchase
Prices for the next two succeeding Contract Year. Such determination by the
arbitrator shall be based upon the price at which B.Braun is selling the
Products to end user customers in the Territory and the B.Braun Revenue Share
Percentage in effect at such time with the objective of establishing a Purchase
Price that would not require Vyteris to remit amounts to B.Braun under the
revenue share provisions of Section 3.5(a) of the Agreement. If B. Braun and
Vyteris are unable to agree upon a mutually satisfactory arbitrator to resolve
their disagreement, such arbitrator shall be selected pursuant to and in
accordance with the procedures established by the American Arbitration
Association.

                                      -46-
<PAGE>

                                 EXHIBIT 1.2(H)

                               PRODUCT DESCRIPTION

..

The Northstar Lidocaine Iontophoretic Drug Delivery System (Northstar System)
consists of the Northstar Lidocaine Iontophoretic Patch (Northstar Patch) Patch
containing [*] Lidocaine an [*] Epinephrine and the Northstar Iontophoretic
Controller (Northstar Controller). The Northstar System delivers lidocaine and
epinephrine simultaneously through a process known as iontophoresis to achieve
local dermal anesthesia.

Iontophoresis is based on the principle that a soluble salt or drug can be
transported across the skin barrier as a part of an electric current induced in
the skin. The quantity and distribution of delivered drug(s) is dependent on the
ion charge, molecular weight, intensity of the electric current, concentration
of the drug(s), and duration of current. At a nominal pH 4.5, lidocaine HCl and
epinephrine are both positively charged. In most iontophoretic systems,
iontophoresis is measured as total charge delivered in milliampere-minutes
(mA-min) units.

The Northstar Lidocaine Iontophoretic Drug Delivery System utilizes a
solid-state electronic controller and a pre-filled patch to form an
iontophoretic drug delivery system. As a result of this product design, the
Northstar Iontophoretic Controller (Northstar Controller) requires only an ON
button actuation to start the treatment and two indicators to inform the user of
the delivery status. The Northstar Controller is designed with a non-replaceable
battery that provides approximately 100 drug applications at [*].

The Northstar Patch is for one use only and disposable. The patch contains drug
and return reservoirs. The 5 cm2 circular drug reservoir delivers lidocaine and
epinephrine to the skin whereas the elongated return reservoir contains
electrolytes to complete the electrical circuit.

[*]

                                      -47-
<PAGE>

                                 EXHIBIT 1.2(I)

                                 SPECIFICATIONS

Vyteris, Inc.

--------------------------------------------------------------------------------
SPECIFICATION - PRODUCT

Title:        Patch, Lidocaine / Epinephrine     Document Number:  [*]

Location(s):  FL                                 Drawing Number:   [*]
--------------------------------------------------------------------------------

1       DESCRIPTION

The Iontophoretic anesthetic patch is a component in a combination product. The
patch contains a [*]of lidocaine hydrochloride and [*]epinephrine in the anode
hydrogel reservoir along with other materials such as electrodes, backing film,
transfer pads, adhesives, and a release cover. The patch is packaged in a foil
laminate pouch.

2       PRODUCT FUNCTION

The lidocaine/epinephrine patch is part of the Iontophoretic Vyteris, Inc.
system. The iontophoretic patch is placed in contact with the skin and connected
to the controller before being activated. The controller delivers a
pre-programmed current delivery profile to the patch which controls the delivery
of charged drug molecules to the patient.

3       PRODUCT CLAIMS

The lidocaine/epinephrine patch when connected to the controller provides local
dermal anesthesia on intact skin for patients 5 years and older.

4       FITNESS FOR USE

        [*]

                                      -48-
<PAGE>

--------------------------------------------------------------------------------
Vyteris Inc.
SPECIFICATION - PRODUCT

Title:       CONTROLLER-D, IONOPHORETIC, NORTHSTAR  Document Number:       [*]
                                                    Sales Drawing Number:  [*]
Location(s): FN

--------------------------------------------------------------------------------

1.0     DESCRIPTION:

        1.1 Multiple use, disposable, Iontophoretic Controller
        1.2 For use only with associated "NorthStar" iontophoretic patch,
        SP300017.

2.0     PRODUCT FUNCTION:

        2.1 Delivers a pre-programmed current profile to an iontophoretic
        anesthetic patch.

3.0     PRODUCT CLAIMS

        3.1 Provide a minimum of 99 uses under average patient load.
        3.2 Provide a numeric reading of the number of deliveries available
        before battery depletion.

[*]

                                      -49-
<PAGE>

                                 EXHIBIT 1.2(J)
                                   TRADEMARKS

Word mark "VYTERIS" -- application filed February 15th 2001
Serial Number 76\211,577
Published for Opposition July 23, 2002
Goods and Services: Drug delivery devices namely iontophoretic drug delivery
devices, electroosmotic drug delivery devices; electrotransport drug delivery
devices; passive drug delivery devices; drug delivery devices in the nature of
transdermal drug delivery devices and associated products in the nature of
medical patches, dose-control devices, drug delivery electrodes, drug
reservoirs, drug delivery controllers, and apparatus for generating an electric
current for delivery of drugs through the skin

Also filed for in Canada, Europe, and Japan

Logo -- Application filed June 20th, 2001
Serial Number 76\274,067
Goods and Services: Drug delivery devices namely iontophoretic drug delivery
devices, electroosmotic drug delivery devices; electrotransport drug delivery
devices; passive drug delivery devices; drug delivery devices in the nature of
transdermal drug delivery devices and associated products in the nature of
medical patches, dose-control devices, drug delivery electrodes, drug
reservoirs, drug delivery controllers, and apparatus for generating an electric
current for delivery of drugs through the skin

                                      -50-
<PAGE>

                                 EXHIBIT 1.2(K)
                        VYTERIS REVENUE SHARE PERCENTAGE

1.      The Vyteris Revenue Share Percentage shall be equal to [*] for Net Sales
of Vyteris countries that are part of the Foreign Territory in which B.Braun has
not engaged in Minimum Distribution Efforts.

2.      For Net Sales of Vyteris in Sub Markets or Primary Foreign Territory
Markets in which B.Braun has engaged in Minimum Distribution Efforts, the
Vyteris Revenue Share Percentage shall be determined by mutual agreement of the
parties prior to or when Vyteris begins marketing, selling and distributing
Products. If, however, the parties are unable to agree upon the Vyteris Revenue
Share Percentage hereunder, either party shall have the right to submit the
matter to binding arbitration pursuant to and in accordance with the provisions
of Section 7.3(i) of this Agreement, under which the arbitrators shall determine
the Vyteris Revenue Share Percentage so as to ensure Vyteris a reasonable return
on investment under the circumstances. Such determination by the arbitrators
shall be based upon such factors that the arbitrators deem appropriate
including, without limitation, the current market share of B.Braun in the
applicable country, the number of years that B.Braun has been marketing and
selling the Products in the country, the total sales by B.Braun of the Products,
and the expenses incurred by B.Braun in connection with the selling, marketing
and distribution of the Products.

                                      -51-
<PAGE>

                                   EXHIBIT 2.1
                                   SUB-MARKETS

The Sub-Markets are:

1.      Office-based markets excluding Dermatologists but including, without
limitation, General Practitioners, Family Practitioners, and Pediatricians

2.      Retail pharmacies, and

3.      Dermatologists.

                                      -52-
<PAGE>

                                   EXHIBIT 3.1
                                  CAPACITY PLAN

The following is Vyteris's Capacity Plan for Patches in the first three Contract
Years, as outlined on a quarterly basis:

----------------------- ------------- ------------ ------------- ---------------
Contract Year 1         Q1            Q2           Q3            Q4
----------------------- ------------- ------------ ------------- ---------------
                        510,000       510,000      510,000       510,000
----------------------- ------------- ------------ ------------- ---------------
Total:                                                           2,040,000
----------------------- ------------- ------------ ------------- ---------------

----------------------- ------------- ------------ ------------- ---------------
Contract Years 2 and 3  Q1            Q2           Q3            Q4
----------------------- ------------- ------------ ------------- ---------------
                        1,020,000     1,020,000    1,020,000     1,020,000
----------------------- ------------- ------------ ------------- ---------------
Total:                                                           4,080,000
----------------------- ------------- ------------ ------------- ---------------

Note: There is no capacity limitation on controllers

                                      -53-
<PAGE>

                                   EXHIBIT 3.2
                                     SAMPLES
Sample Quantities

Vyteris will provide B.Braun at Vyteris's expense the initial sampling quantity
of [*], no sooner than one month before anticipated Commercial Start Date.

                                      -54-
<PAGE>

                                 EXHIBIT 3.5(E)
                          MINIMUM AVERAGE SELLING PRICE

------------------------------------- ---------------------- -------------------
Aggregate quantity of                    Minimum Average          Projected
iontophoreticpatch Products               Selling Price         Selling Price
purchased by B.Braun during the
Term and Post-Termination Period
------------------------------------- ---------------------- -------------------
0-499,000                                     [*]                   [*]
------------------------------------- ---------------------- -------------------
500,000-999,999                               [*]                   [*]
------------------------------------- ---------------------- -------------------
1,000,000-1,999,999                           [*]                   [*]
------------------------------------- ---------------------- -------------------
2,000,000-2,999,999                           [*]                   [*]
------------------------------------- ---------------------- -------------------
3,000,000-4,999,999                           [*]                   [*]
------------------------------------- ---------------------- -------------------
5,000,000-6,999,999                           [*]                   [*]
------------------------------------- ---------------------- -------------------
Thereafter to be mutually agreed
upon
------------------------------------- ---------------------- -------------------

B.Braun hereby agrees to consult with Vyteris prior to implementing pricing
program that would result in the establishment of pricing parameters that are
less than the Projected Selling Price set forth above.

If B. Braun and Vyteris are unable to agree upon the Minimum Average Selling
Price for the iontophoretic patch Products after the sale by B.Braun of [*]
Products, either party shall have the right to submit the matter to binding
arbitration in which a single arbitrator having sufficient industry experience
and qualifications and reasonably satisfactory to B.Braun and Vyteris, shall be
authorized and directed to determine the Minimum Average Selling Pice for the
next two succeeding Contract Year. Such determination by the arbitrator shall be
based upon the price at which B.Braun is selling the iontophorectic patch
Products to end user customers, the expenses incurred by B.Braun in marketing,
distributing and selling the Products, the B.Braun Revenue Share Percentage
currently in effect and the actual manufacturing costs incurred by Vyteris in
manufacturing the iontophorectic patch Products. If B. Braun and Vyteris are
unable to agree upon a mutually satisfactory arbitrator to resolve their
disagreement, such arbitrator shall be selected pursuant to and in accordance
with the procedures established by the American Arbitration Association.

                                      -55-
<PAGE>

                                   EXHIBIT 3.6
                         FORM OF CERTIFICATE OF ANALYSIS

Subject to the consent of Vyteris, which consent shall not be unreasonably
withheld, B. Braun shall have the right to modify the form of Certificate of
Analysis to conform the Certificate of Analysis with the Specification and the
NDA.

                                      -56-
<PAGE>

                                   EXHIBIT 3.8
                          PRE-APPROVAL INSPECTION PLAN

The plan outlined below represents target dates as of the agreement date.
Incremental changes to the plan are expected and will be communicated in a
timely manner to both parties

<TABLE>
<CAPTION>
<S>                                                                            <C>
----------------------------------------------------------------- ------------ --------------- --------------
Task                                                                Duration       Start           Finish
----------------------------------------------------------------- ------------ --------------- --------------
Quality System Documents                                              [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Complete Manufacturing/Inventory Procedures                    [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Train & implement Manufacturing Procedures                     [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Complete Quality Assurance Procedures                          [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Train & implement new QA procedures                            [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Complete Equipment Procedures (laboratory/facilities)          [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Train and Implement Equipment Procedures                       [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
Validation                                                            [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Laboratory Computer/Network Validation                         [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Identify & hire validation expert                          [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Upgrade Vyteris to Windows 2000 platform                   [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Validation-design, execute, report & train                 [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Facility Validation                                            [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Identify/hire BMS software specialist                      [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Implement new software                                     [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Validation-design, execute, report & train                 [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Laboratory Analytical Method Validation                        [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Write 4 Method Validation Protocols                        [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Execute 4 validations                                      [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
       Manufacturing Validation                                       [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
           Write  IOQ/PQ  protocols for CPAL, Multivac, and           [*]           [*]             [*]
           Packaging Machine
----------------------------------------------------------------- ------------ --------------- --------------
           Execute Protocols for CPAL, Multivac, and Packaging        [*]           [*]             [*]
           Machine
----------------------------------------------------------------- ------------ --------------- --------------
GMP TRAINING (company wide)                                           [*]           [*]             [*]
----------------------------------------------------------------- ------------ --------------- --------------
</TABLE>

                                      -57-
<PAGE>

                                 EXHIBIT 5.1(D)
                      DESCRIPTION OF PERMITTED ENCUMBRANCE

Pursuant to an Intellectual Property Security Agreement, dated November 21,
2001, by and between Vyteris, Inc. (the "Company") and Spencer Trask Specialty
Group, LLC and The Donald F. Farley Inter Vivos Trust (collectively, the
"Lenders"), as the same has been and may be amended from time to time, the
Company granted a security interest in the Company property described below in
order to secure the timely payment, performance and satisfaction of loans made
by the Lenders to the Company: all trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks,
service mark applications, patents, patent applications, and any license
agreements with any other party, whether the Company is a licensee or licensor
thereunder, in each case as owned or existing as of the date of the
above-described Intellectual Property Security Agreement, or thereafter acquired
or arising.

                                      -58-
<PAGE>

                                 EXHIBIT 5.1(E)
  AGREEMENT WITH HOLDER(S) OF PERMITTED ENCUMBRANCE ACKNOWLEDGING THE PERMITTED
 ENCUMBRANCE IS UNDER AND SUBJECT TO THE PROVISIONS AND RIGHTS OF B.BRAUN UNDER
                                 THIS AGREEMENT.

        To:      B. Braun Medical Inc.

        From:    Spencer Trask Specialty Group, LLC

                 The Donald F. Farley Inter Vivos Trust

        Date:    September __, 2002

        Re:      License, Development and Distribution Agreement

        Spencer Trask Specialty Group, LLC, and The Donald F. Farley Inter Vivos
Trust (collectively, the "Lenders") are parties to an Intellectual Property
Security Agreement (the "Security Agreement"), dated as of November 21, 2001, as
amended, with Vyteris, Inc. (the "Company"), whereby the Company granted (and
shall continue to grant) a security interest in all Company trademarks, patents
and intellectual property licenses to secure the repayment of loans made by the
Lenders to the Company from time to time. A true, correct and complete copy of
the Security Agreement is attached hereto as Exhibit "A" and made a part hereof.

        The Lenders recognize that pursuant to the License, Development and
Distribution Agreement (the "License Agreement"), dated September __, 2002, by
and between the Company and B. Braun Medical Inc. ("BBMI"), inter alia, the
Company is granting to BBMI certain exclusive worldwide distribution rights and
certain exclusive worldwide license rights with respect to a transdermal
lidocaine delivery system and other intellectual property rights more fully
described therein (collectively referred to herein as the "System"). The Lenders
further recognize that, subject to the terms and conditions of the License
Agreement, if the Company becomes unable to manufacture the System, BBMI has
certain rights to manufacture or have manufactured that System so long as it
continues to meet its revenue sharing obligations (pursuant to the License
Agreement) to the Company or its successor(s) or assign(s). The Lenders
acknowledge that they have reviewed and approved the Company's execution and
delivery of, and performance under, the License Agreement notwithstanding any
provision contained in the Security Agreement or any promissory note, loan
agreement or other agreement, document or instrument executed by the Company in
favor of the Lenders (or either of them) in connection with the credit
transactions described in the Security Agreement or any other transaction
(collectively, the "Loan Documents").

        The Lenders hereby agree not to cause the Company (or its successor(s)
or assign(s)) to reject to the License Agreement nor to exercise their rights,
or take any action, under the Security Agreement or any other Loan Document, in
such a way that

                                      -59-
<PAGE>

would interfere, impair, defeat or diminish, in any manner or respect, BBMI's
ability under the License Agreement to manufacture, distribute, market or sell
(or to have manufactured, distributed, marketed and sold) the System in
accordance with the terms of the License Agreement or exercise any other rights
under and pursuant to the License Agreement.

        The Lenders recognize and acknowledge that BBMI would not enter into the
License Agreement or any related transaction described therein with the Company
unless the Lenders provided to BBMI the acknowledgments and agreements herein.
BBMI is relying upon the undisturbed and uninterrupted possession of the rights
and interests granted to it by the Company under the License Agreement. In that
regard, the Lenders covenant and agree to (i) take, or cause to be taken, any
further action (including, without limitation, executing and delivering
agreements, documents and instruments) that BBMI may reasonably request from
time to time to further evidence and confirm the acknowledgments and agreements
of the Lenders herein and (ii) provide BBMI with prompt written notice of any
default by the Company under the Loan Documents (unless the default is waived by
the Lenders).

        The Lenders jointly and severally represent and warrant to BBMI that:
(i) this letter agreement constitutes the valid and binding obligation of the
Lenders, legally enforceable against it in accordance with its terms; and (ii)
the execution and delivery of, and performance under, this letter agreement will
not violate any contract, agreement or arrangement to which either Lender is a
party or by which either Lender is bound. The Lenders have executed and
delivered this letter agreement intending to be legally bound.

Agreed to as of the date first set forth above:

Spencer Trask Specialty Group, LLC       The Donald F. Farley Inter Vivos Trust

By:/s/ [Signature of Authorized Person]  By:/s/ [Signature of Authorized Person]
   --------------------------------------   ------------------------------------
Name:  [Authorized Person]                      Name: [Authorized Person]
Title:  NonMember Manager                       Title: Grantor

                                      -60-
<PAGE>

                                 EXHIBIT 5.1(H)
                        PENDING PATENT RIGHTS PROCEEDINGS

Since the date of the Private Placement Memorandum "PPM", we have experienced
results in most of our European (EP) and Japanese (JP) patent challenges. As of
the date of this Agreement, we have resolved seven of the nine patent
oppositions listed in the "PPM."

<TABLE>
<CAPTION>
<S>                                                                            <C>
---------------------------- -------------------------- -------------------------- --------------------------
Opposition Filing Date       PATENT TITLE               PATENT NUMBER              STATUS
---------------------------- -------------------------- -------------------------- --------------------------
1999                         Iontophoresis ystem        EP 0 547 482               Still Pending
                             Having    Features for
                             Reducing Skin Irritation
---------------------------- -------------------------- -------------------------- --------------------------
2000                         Improved Iontophoretic     EP 0 783 346               Preliminary ruling in
                             Drug Delivery Device                                  favor of Vyteris
---------------------------- -------------------------- -------------------------- --------------------------
2000                         Molecules for              EP 0 552 878               Resolved-Process deemed
                             Iontophoretic Delivery                                unpatentable
---------------------------- -------------------------- -------------------------- --------------------------
1992                         Apparatus of               EP 0 185 520               Resolved-ruling in favor
                             Iontophoretic Delivery                                of Vyteris
---------------------------- -------------------------- -------------------------- --------------------------
1995                         Iontophoretic Drug         EP 0 522 092               Resolved-Alza appeal
                             Delivery  System with Two                             dismissed; ruling in
                             Stage Delivery Profile                                favor of Vyteris
---------------------------- -------------------------- -------------------------- --------------------------
1995                         Iontophoretic  Delivery    EP 0 528 789               Resolved-Alza Patent
                             Devices Utilizing                                     claims deems
                             Selectively Permeable                                 unpatentable
                             Membranes  on  the  Basis
                             of Either  Size or Change
                             of the Permeation Species
---------------------------- -------------------------- -------------------------- --------------------------
1997                         Molecules for              JP 2,506,543               Resolved-certain claims
                             Iontophoretic Delivery                                issued to Vyteris
---------------------------- -------------------------- -------------------------- --------------------------
1997                         User Activated             JP 2,542,792               Resolved-certain claims
                             Iontophoretic Device                                  issued to Vyteris
---------------------------- -------------------------- -------------------------- --------------------------
1998                         User activated             EP 0 586 666               Resolved-ruling in favor
                             Iontophoretic Device                                  of Vyteris
---------------------------- -------------------------- -------------------------- --------------------------
</TABLE>

                                      -61-
<PAGE>

                                 EXHIBIT 5.1(L)

                                EXCEPTIONS TO PPM
Update, as of September 5, 2002 ("Update'), to Supplement No. 1, dated June 25,
2002 ("Supplement") to Vyteris' Confidential Private Placement Memorandum dated
March 4, 2002 ("PPM")

RECENT DEVELOPMENTS

Food and Drug Administration (FDA) Filing

        We submitted our New Drug Application (NDA) to the FDA regarding our
lidocaine product on May 9, 2002. On July 8, 2002 we withdrew the NDA due to
data presentation issues. All such data presentation issues have been resolved
and the resubmission of the NDA is expected to occur in September 2002. The
resubmission date is dependent on when a meeting with the FDA can be held.

Planned Private Placement

        The private placement of $7 to $10 million of Series C Convertible
Preferred Stock ("Private Placement") was suspended due to Vyteris' withdrawal
of its NDA. On September 2, 2002 the Private Placement terminated. All funds
collected by the placement agent have been returned to the investors. Vyteris is
currently exploring alternative financing vehicles.

Convertible Promissory Notes

        Since June 25, 2002, Spencer Trask Specialty Group (STSG) has purchased
an additional $1.625 million principal amount of 8% Convertible Promissory Notes
(the "8% Convertible Notes") from Vyteris. Total principal amount of 8%
Convertible Promissory Notes outstanding as of August 31, 2002 is $7.875
million. The terms of these notes are identical to the terms of such notes
previously issued to STSG, as described the Memorandum and Supplement No. 1. The
8% Convertible Notes mature one-year from the dates of issue.

UPDATED RISK FACTORS

We have a history of operating losses and it is uncertain whether we will be
profitable in the future.

To date, we have not been profitable. We may never be profitable and, if we
become profitable, we may be unable to sustain profitability. We have incurred
operating losses since inception as we have been engaged primarily in clinical
testing and development activities. We reported a net loss of $15.4 million for
the period from inception (November 10, 2000) to June 30, 2002. Because it takes
years to develop, test and obtain

                                      -62-
<PAGE>

regulatory approval for drug delivery systems before we may commence
revenue-producing activities, we expect to continue to incur significant losses
for the foreseeable future.

Updated Securities Information

As of August 31, 2002, the following was outstanding:
-        6,749,917 Common Shares
-        333,333 shares of Series A Convertible, Redeemable Preferred Shares
-        3,000,000 shares of Series B Convertible, Redeemable Preferred Shares
-        Warrants to purchase 3,500,000 shares of Common Stock
-        Options to purchase 792,835 shares of Common Stock
-        $7.875 million principal amount of 8% Convertible  Promissory Notes,
         which are convertible into 6,300,000 shares of Common Stock

Updated Capitalization

The following table sets forth the capitalization of Vyteris as of
June 30, 2002.

Stockholders' Equity (Deficit):
------------------------------------------------------- ------------------------
Common Stock, par value $0.0001 per share;  30,000,000         $     675
authorized; 6,749,917 shares outstanding
------------------------------------------------------- ------------------------
Additional paid-in capital                                     7,164,526
------------------------------------------------------- ------------------------
Deferred compensation                                          (149,915)
------------------------------------------------------- ------------------------
Accumulated deficit                                         (15,351,829)
------------------------------------------------------- ------------------------
Total stockholders' equity (deficit)                         (8,336,543)
------------------------------------------------------- ------------------------
Preferred Stock, par value $0.0001 per share;
20,000,000 shares authorized:
------------------------------------------------------- ------------------------
Series A convertible, redeemable preferred stock;                333,333
333,333 shares issued and outstanding
------------------------------------------------------- ------------------------
Series B convertible, redeemable preferred stock;              2,917,640
3,000,000 shares issued and outstanding
------------------------------------------------------- ------------------------
Total preferred stock                                          3,250,973
------------------------------------------------------- ------------------------
Capital lease obligation                                          42,168
------------------------------------------------------- ------------------------
8% convertible promissory notes (1)                            5,976,044
------------------------------------------------------- ------------------------
Total Capitalization                                           $ 932,642
------------------------------------------------------- ------------------------

(1)     In July and August 2002, an additional $1.625 million principal amount
of 8% Convertible Promissory Notes were issued to STSG.

Updated Selected Financial Data

The following table sets forth certain selected financial information. This
information should be read in conjunction with the financial statements and
accompanying notes

                                      -63-
<PAGE>

attached to this Update. The statement of operations data for the period from
November 10, 2000 (inception) through June 30, 2002, as well as the balance
sheet data as of June 30, 2002, are derived from financial statements prepared
by management without audit or without its independent accountant review.

---------------------------------- ---------------------------------------------
                                           Period from November 10, 2000
                                      (inception) through June 30, 2002 (in
                                                    thousands)
---------------------------------- ---------------------------------------------
Statement of Operations Data:
---------------------------------- ---------------------------------------------
Revenues                                       $     408,000
---------------------------------- ---------------------------------------------
Operating expenses:
---------------------------------- ---------------------------------------------
  Research and development                        10,965,664
---------------------------------- ---------------------------------------------
  General and administrative                       4,813,844
---------------------------------- ---------------------------------------------
Total operating expenses                          15,779,508
---------------------------------- ---------------------------------------------
Interest income (expense), net                        19,679
---------------------------------- ---------------------------------------------
Net loss                                       $ (15,351,829)
---------------------------------- ---------------------------------------------

---------------------------------- ---------------------------------------------

--------------------------------------- ---------------------------------
                                          June 30, 2002 (in thousands)
--------------------------------------- ---------------------------------
Balance Sheet Data:
--------------------------------------- ---------------------------------
Cash and cash equivalent                          $       295
--------------------------------------- ---------------------------------
Equipment, net                                          1,967
--------------------------------------- ---------------------------------
Total assets                                            2,491
--------------------------------------- ---------------------------------
Total liabilities                                       7,577
--------------------------------------- ---------------------------------
Preferred stock                                         3,251
--------------------------------------- ---------------------------------
Total stockholders' equity (deficit)                   (8,337)
--------------------------------------- ---------------------------------

                                      -64-<PAGE>

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [*], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

                          FERRING PHARMACEUTICALS INC.

                                       And

                                  VYTERIS INC.

--------------------------------------------------------------------------------

                        LICENSE AND DEVELOPMENT AGREEMENT

--------------------------------------------------------------------------------

                                       1
<PAGE>

                                      INDEX

1.      DEFINITIONS

2.      DEVELOPMENT PROGRAM AND LICENSE

3.      LIAISON TEAM

4.      EXCHANGE OF INFORMATION

5.      LICENSE FEES

6.      PAYMENT TERMS

7.      PATENT PROSECUTION AND INFRINGEMENT

8.      INTELLECTUAL PROPERTY

9.      TERM AND TERMINATION

10.     WARRANTIES, REPRESENTATIONS, INDEMNIFICATION AND INSURANCE

11      ASSIGNMENT

12.     INDEPENDENT CONTRACTORS

13.     NOTICES

14.     ENTIRE AGREEMENT

15.     SEVERABILITY

16.     REGISTRATION

17      GOVERNING LAW

18      DISPUTE RESOLUTION

19.     EXECUTION IN COUNTERPART

                                       2
<PAGE>

This agreement (hereinafter "Agreement") made as of the ____  day of, 2004
BETWEEN

(1)     FERRING PHARMACEUTICALS INC, a company duly organized under the laws of
        State of Delaware and having its principal place of business at 400
        Rella Boulevard, Suite 300, Suffern, NY 10901 (hereinafter "Ferring")

AND

(2)     VYTERIS INC., a company duly organized under the laws of the State of
        Delaware and having its principal place of business at 13-01 Pollitt
        Drive, Fair Lawn, NJ 07410, USA (hereinafter "Vyteris")

WITNESSES THAT
WHEREAS:

(A)     Vyteris is the owner of all right, title and interest in certain Vyteris
        Patents identified in Appendix A hereto and Know-How relating to an
        iontophoretic drug delivery system that can be used for the [*] delivery
        of drugs; and

(B)     Ferring and Vyteris wish to jointly contribute to the development of a
        commercial product that uses the [*] delivery system for the delivery of
        [*], under the terms of the obligations and rights set forth herein;

NOW THEREFORE, in consideration of the covenants and obligations expressed below
and intending to be legally bound,

THE PARTIES HEREBY AGREE AS FOLLOWS:

1.      DEFINITIONS

1.01    "ADVERSE EVENT" means any untoward medical occurrence in a patient or
        clinical investigation subject to whom a pharmaceutical product has been
        administered, and which does not necessarily have to have a causal
        relationship with this treatment.

1.02    "AFFILIATE" means any corporation, firm or other entity whether de jure
        or de facto which directly or indirectly owns, is owned by or is under
        common control with a party to this Agreement to the extent of at least
        50% of the equity (or such less a percentage that is the maximum allowed
        to be owned by a foreign corporation in a particular jurisdiction

                                       3
<PAGE>

        having the right to vote on or direct the affairs of the entity) and any
        persons, firm, partnership, corporation or other entity actually
        controlled by, controlling or under common control with a party to this
        agreement.

1.03    "DEVELOPMENT PLAN" means the product development work plan created as a
        timeline that includes major non-clinical and clinical phases of
        development and study, manufacturing plans and regulatory milestones, as
        set forth in Appendix B.

1.04    "DEVELOPMENT PROGRAM" means the development work performed by Ferring
        and Vyteris pursuant to the Development Plan.

1.05    "DEVICE" means a delivery system consisting of an iontophoretic patch
        and a control unit for the iontophoretic administration of [*].

1.06    "EFFECTIVE DATE" means the date as of which this Agreement is effective
        which shall be the date first written above.

1.07    "FERRING BACKGROUND IP" means all Intellectual Property that is both (a)
        owned or controlled by Ferring (i) as of the Effective Date or (ii)
        during the term of the Development Program, but which is not developed
        or acquired by Ferring in the conduct of the Development Program; and
        (b) relates to the Product and could reasonably be used in the conduct
        of the Development Program.

1.08    "FERRING COLLABORATION IP" means all Intellectual Property created,
        made, developed, conceived or reduced to practice solely by the
        employees, consultants or agents of Ferring during, and in the conduct
        of, the Development Program.

1.09    "FERRING IP" means all Ferring Background IP and Ferring Collaboration
        IP.

1.10    "FORCE MAJEURE" means any significant unexpected event that is beyond
        the reasonable control of a party for which such party cannot reasonably
        have been expected to have taken account as of the Effective Date, which
        significantly delays the Development Plan beyond the timings that are
        set out in Appendix B and including, but without prejudice to the
        foregoing generality, events resulting from an act of God, lightning,
        fire, flood, earthquake, accumulation of snow or ice, lack of water
        arising from weather or environmental problems, strike, lock-out or
        other industrial disturbance, act of the public enemy, war declared or
        undeclared; threat of war; terrorist act; blockade, revolution, riot,

                                       4
<PAGE>

        insurrection, civil commotion, public demonstration, sabotage, act of
        vandalism, prevention from or hindrance in obtaining any raw materials,
        energy or other supplies, explosion, fault or failure of plant or
        machinery (which could not have been prevented by good industry
        practice); government restraint, act of legislature or a directive or
        requirement of the competent authority affecting a party or its
        subcontractor providing that such party or its subcontractor's lack of
        funds shall not be interpreted as a cause beyond such party's reasonable
        control.

1.11    [*]

1.12    "IMPROVEMENT" means any enhancement to Ferring IP or Vyteris IP, as the
        case may be, based on and arising from exposure to such Intellectual
        Property and made during the conduct of the Development Program,
        including enhancements made to such Improvements during the conduct of
        the Development Program.

1.13    "INFORMATION" means any and all:

        (a)     information relating to the business affairs, finances or
                commercial interests of a party which is disclosed pursuant to
                this Agreement in whatever form;

        (b)     Know-How;

        (c)     samples of Materials provided for testing;

        (d)     results of any tests performed with samples of Materials or
                Device;

        (e)     such other written information whether provided in printed,
                hand-written, electronic or any other form, either party deems
                confidential that is provided to the other party in writing and
                marked "Confidential" or which is the subject matter of oral
                discussions that will be summarized and agreed by the parties
                within thirty days after each discussion, such summaries also to
                be marked "Confidential".

1.14    "INTELLECTUAL PROPERTY" means, collectively, all intellectual property
        rights (whether or not patented or patentable) including, but not
        limited to, algorithms, approvals, certifications, chemical compounds,
        conceptual expressions, copyrights, trademarks, data, designs, formulae,
        ideas, improvements, inventions, Know-How, Patent Rights, prototypes,
        supply sources, tests and test results,., together with that portion of
        all media (whether in human or machine readable form) containing any
        expression of such

                                       5
<PAGE>

        intellectual property rights, which directly or indirectly relate to the
        development, registration, manufacture or use of the Product.

1.15    "JOINT COLLABORATION IP" means all Intellectual Property created, made,
        developed, conceived or reduced to practice jointly by the employees,
        consultants or agents of Vyteris and the employees, consultants or
        agents of Ferring during, and in the conduct of, the Development
        Program.

1.16    "KNOW-HOW" means technical and other information that is not in the
        public domain, including information comprising or relating to concepts,
        discoveries, data designs, formulae, ideas, information relating to
        Materials, inventions, methods, models, assays, research and/or
        development plans, procedures, designs for experiments and tests and
        results of experimentation and tests (including results of research or
        development), processes (including manufacturing processes,
        specifications and techniques) laboratory records, chemical,
        pharmacological, toxicological, clinical, analytical and quality control
        data, trial data, case report forms, data analyses, reports or summaries
        and information containing submissions to and information from ethics
        committees and Regulatory Authorities.

1.17    "LAUNCH" means the date on which a Product developed hereunder is
        offered for sale commercially to the medical community in the United
        States of America, other than by way of participation in or for use in a
        clinical trial.

1.18    "LIAISON TEAM" means those Vyteris and Ferring personnel designated in
        accordance with Section 3.01.

1.19    "MATERIALS" means any chemical or biological substance, device or
        delivery system, made available by one party to the other pursuant to
        this Agreement and including any:

        (a)     organic chemical or inorganic element or compound;

        (b)     protein including peptide or amino acid sequence, enzyme,
        antibody or protein conferring targeting properties and any fragment of
        a protein or a peptide enzyme or antibody;

        (c)     prodrug, drug or metabolite; or

        (d)     assay or reagent.

                                       6
<PAGE>

1.20.   "Months Cash" means the ratio which results from dividing (a) the
        average daily cash balances for the month plus any receivable from
        Ferring at month-end by (b) the monthly average of cash flow for that
        month and the preceding two months, which ratio shall be reported to
        Ferring within 10 calendar days of the end of the month, accompanied
        within a further five days by the month's financial statements.

1.21    "NET SALES" means the gross sales of the Product by Ferring, its
        Affiliates and its sublicensees to unrelated third party customers, less
        the following deductions (consistent with United States generally
        accepted accounting principles) to the extent and only to the extent
        such amounts were actually given or incurred and relate specifically to
        the Product (with pro-ration of such amounts so that the amount applies
        solely to the Product): (i) direct or indirect credits and allowances or
        adjustments granted to such customers on account of price adjustments,
        government or other rebates (e.g. Medicare or Medicaid rebates),
        rejections, or returns in respect of the Product previously sold; (ii)
        any trade or cash discounts, rebates, charge-backs or administrative
        fees or other price reductions granted to customer or to third parties
        (such as pharmaceutical benefit management companies) who are not
        customers but who are involved in the acquisition, dispensing or
        utilization, management of prescription ; and (iii) any sales or other
        like taxes (but specifically excluding any taxes based on net income)
        imposed upon the sale of the Product to the extent included in the gross
        sales price (e.g., Value Added Tax).

        Ferring agrees not to use the Product as a loss leader. Ferring also
        agrees that if it prices the Product in order to gain or maintain sales
        solely of its other products, then for purposes of calculating the
        payments due hereunder, the Net Sales shall be adjusted to reverse any
        discount which was given to a customer that was in excess of customary
        discounts for the Product (or, in the absence of relevant data for the
        Product, other similar products under similar market conditions),

1.22    "VYTERIS PATENTS" means all patents and patent applications that are or
        become owned by Vyteris or to which Vyteris has now or in the future the
        right to grant licenses that generically or specifically claim the
        Device or Product, a process for manufacturing the Device or Product, an
        intermediate used in such a process or a use of Device or the

                                       7
<PAGE>

        Product. Included within the definition of VYTERIS Patents are all
        continuations, continuations in part, divisions, patents of addition,
        reissues, renewals or extensions thereof and all Supplementary Patent
        Certificate and similar rights. Also included within the definition of
        Vyteris Patents are any patent or patent applications that generically
        or specifically claim any improvements to the Device or Product or
        manufacturing processing required or useful for production of the Device
        or Product that are developed by Vyteris or regarding which Vyteris has
        the right to grant licenses now or in the future during the term of this
        Agreement. The current list of patent applications and patents
        encompassed within Vyteris Patents is set forth in Appendix A attached
        hereto.

1.23    "PATENT RIGHTS" means United States and/or foreign patents and patent
        applications, including all substitutions, divisions, continuations,
        continuations-in-part, reissues, reexaminations and extensions thereof
        together with any supplementary protection certificates granted thereon
        and any similar rights.

1.24    "PRODUCT" means any product which is developed hereunder comprising [*]
        and control unit for such [*] for any indication.

1.25    "REGULATORY AUTHORITY(IES)" means any federal, national, multinational,
        state, provincial or local regulatory agency, department, bureau or
        other governmental entity with authority over the testing, manufacture,
        use, storage, import, promotion, marketing and sale of a therapeutic
        product in any country, including the United States Food and Drug
        Administration.

1.26    "VYTERIS BACKGROUND IP" means all Intellectual Property that is both (a)
        owned or controlled by Vyteris (i) as of the Effective Date or (ii)
        during the term of the Development Program, but which is not developed
        or acquired by Vyteris in the conduct of the Development Program; and
        (b) relates to the Product and could reasonably be used in the conduct
        of the Development Program.

1.27    "VYTERIS COLLABORATION IP" means all Intellectual Property created,
        made, developed, conceived or reduced to practice solely by the
        employees, consultants or agents of Vyteris during, and in the conduct
        of, the Development Program.

1.28    "VYTERIS IP" means all Vyteris Background IP and Vyteris Collaboration
        IP.

                                       8
<PAGE>

2.      DEVELOPMENT PROGRAM, LICENSE AND DISTRIBUTION

2.01    (A) Vyteris hereby grants to Ferring an exclusive worldwide license to
        develop, market, manufacture and distribute the Product ("License")
        (with the right to grant sublicenses to co-marketers or distributors).
        This License shall be deemed to include the right to develop,
        manufacture, market and distribute Products that incorporate any
        subsequent improvements made by Vyteris to its iontophoretic patch
        technology for the [*] during the term of this Agreement. The exercise
        by Ferring of its rights under the License to develop or manufacture the
        Product shall be subject to its continuing obligation to make the
        payments to Vyteris required under Section 5.05. In consideration of the
        License granted to Ferring hereunder, Ferring represents, warrants,
        covenants and agrees to and with Vyteris that during the term of this
        Agreement and in furtherance of its duties and obligations under this
        Agreement, it shall: (a) use commercially reasonable efforts to
        distribute and promote the sale of the Products in the United States
        upon the receipt of marketing authorization from the FDA, including,
        without limitation, maintaining adequate sales personnel and facilities
        with respect to the Product in the United States and using commercially
        reasonable efforts to solicit new customers and to maintain existing
        customers for the Product in the United States; and (b) not market or
        sell in any country any product competitive with the Product that
        employs iontophoretic technology of the [*].

        (b) Subject to the terms and conditions of this Agreement, Ferring
        hereby grants to Vyteris, during the term of this Agreement, a
        worldwide, non-exclusive, royalty-free license, without the right to
        grant sublicenses under Ferring IP, solely to the extent necessary or
        appropriate to perform Vyteris's obligations to Ferring under this
        Agreement, including, without limitation, to conduct the Vyteris
        activities under this Agreement and in the Development Plan.

                                       9
<PAGE>

2.02    In addition to the information exchanged between the parties through the
        Liaison Team, Vyteris shall provide to Ferring the periodic knowledge
        transfers as provided for in Appendix G.

        If at any time after Vyteris commences to supply the Product to Ferring
        pursuant to the Supply Agreement or with respect to supplies to progress
        the Development Plan (1) Vyteris shall fail to manufacture and supply
        the Product to Ferring in accordance with the provisions of this
        Agreement or the Supply Agreement, such that Vyteris is in material
        breach of such Supply Agreement or Ferring is in jeopardy of a supply
        shortage with respect to the Product or (2) Vyteris shall fail to
        maintain five Months Cash during the Development period and for the
        first twelve months following FDA approval of the Product, Vyteris shall
        immediately upon Ferring's request provide copies of the Vyteris
        manufacturing Know-How to Ferring.

2.03    Vyteris grants to Ferring the right of first negotiation for any other
        product that it may conceive or to which it may obtain rights for the
        [*], on the following terms. During the Term, prior to entering into any
        contract, agreement, term sheet, or understanding with a third party
        with respect to an [*], Vyteris shall provide written notice to Ferring
        of its intent to solicit and engage in negotiations with third parties
        with respect to an [*] (the "Opportunity Notice"), which Opportunity
        Notice shall include information in reasonable detail sufficient to
        enable Ferring to make an informed decision with respect to such [*];
        provided, however, that this Section 2.03 shall not prevent Vyteris from
        participating at any time in general discussions or negotiations with
        third parties with respect to an [*]. If Ferring notifies Vyteris in
        writing within sixty (60) days of receipt of the Opportunity Notice (the
        "Opportunity Response Period", such notice, the "Opportunity Response")
        that it has a bona fide interest in discussing a collaboration with
        Vyteris with respect to such [*], Vyteris and Ferring shall enter into
        good faith negotiations on an exclusive basis, on such terms as may be
        mutually agreeable. If (a) Ferring does not indicate during the
        Opportunity Response Period that it is interested in discussing such
        [*], (b) Ferring indicates in writing during the Opportunity Response
        Period that it has no interest in such [*], or (c) Ferring indicates
        such an interest during the Opportunity Response Period but Ferring and
        Vyteris are unable, after good faith negotiations, to reach mutual
        agreement

                                       10
<PAGE>

        and execute a definitive agreement with respect to such [*] within one
        hundred eighty (180) days from the date of the Opportunity Response (or
        such extended period as may be approved in writing by Vyteris and
        Ferring), Vyteris shall be thereafter free to undertake detailed
        negotiations regarding key terms and enter into a transaction (including
        execution of a definitive agreement) relating to such [*] with a third
        party(ies). Vyteris shall not be obligated to reveal to Ferring the
        identity of any third party involved in any such transaction, but shall
        not for a period of one year after terminating discussions with Ferring,
        whether by expiry of the Opportunity Response Period or otherwise, agree
        terms more favorable to a third party than those previously offered to
        Ferring.

2.04    During the term of the Agreement, the parties shall carry out the
        Development Plan as set out in Appendix B. Vyteris will provide Ferring
        with an annual and three year development plan and budgets. Ferring will
        review and approve the budgets on an annual basis. Ferring will fund [*]
        of Vyteris' approved annual development budget, and shall pay its share
        of the estimated development costs as set forth in the annual budget to
        Vyteris on a monthly basis in arrears. No later than January 30th of
        each succeeding year, the Parties shall reconcile the actual development
        costs incurred by Vyteris in the preceding year with the annual budget
        for that year. If the actual development costs incurred by Vyteris were
        less than the approved annual budget for such year, Vyteris shall by
        February 28th of the following year issue a credit to Ferring equal to
        the amount by which Ferring's payments to Vyteris for that year past
        exceeded [*] of the actual development costs incurred by Vyteris for
        that year. If the actual development costs incurred by Vyteris were
        greater than the approved annual budget for such year, Ferring shall by
        February 28 of the following year pay Vyteris an amount sufficient to
        make up for the shortfall by which Ferring's payments to Vyteris were
        less than [*] of the actual development costs incurred by Vyteris for
        that year; provided, however, that any deviation in excess of ten
        percent (10%) of the approved annual budget for any year other than such
        deviation as may result from a Force Majeure or the request or fault of
        Ferring will be funded in total by Vyteris. All Vyteris' costs will be
        based on the costing methodology set forth in Appendix D, and will
        exclude capital expenditure Ferring shall have no liability with respect
        to any capital expenditure incurred by Vyteris. Excess costs

                                       11
<PAGE>

        arising from a Force Majeure shall be subject to BONA FIDES discussions
        between the Parties with the intent of establishing an equitable
        solution.

2.05    It is the intention of the Parties that the Product conforms to the
        attributes set out in Appendix E.

2.06    Ferring is responsible at its sole expense for submitting, holding and
        maintaining all drug and device marketing authorizations (e.g. NDA, IND,
        510k). Vyteris is responsible at its sole expense for creating,
        submitting, holding and maintaining all device master files ("DMF").
        Ferring is responsible at its sole expense for coordinating and managing
        regulatory authority requests related to the Product. Vyteris, however,
        will undertake any additional work reasonably requested by Ferring, in
        support of regulatory requests that pertain to Vyteris' areas of
        responsibility with respect to the Product, E.G., testing, regulatory
        meetings, etc., with the costs of such additional work to be shared by
        the Parties on an equal basis. To the extent Ferring requests that
        Vyteris undertake additional work related to or arising from clinical
        trials or other regulatory requirements, or any additional work arising
        after marketing approval of the Product by the FDA, the costs of such
        work shall be at Ferring's expense, and Vyteris shall in good faith
        undertake such work.

3.      LIAISON TEAM

3.01    To facilitate communication and close co-operation, in particular in
        relation to timelines, budgets and planning, each party shall appoint to
        a Liaison Team such members of its staff that the party in its sole
        discretion deems appropriate. The Liaison Team shall meet as required at
        the reasonable request of either party so long as a relationship between
        the parties continues in relation to the Product. The parties will
        endeavour in good faith to maintain continuity in the staffing of the
        Liaison Team, but neither party shall have the right to approve the
        other party's staffing decisions. The Liaison Team will review product
        development, manufacturing, regulatory issues, clinical trials, and
        commercialization plans on a semi-annual basis. Notwithstanding the
        foregoing the Liaison Team will not have decision -making authority.

                                       12
<PAGE>

4.      EXCHANGE OF INFORMATION

4.01    Promptly after the Effective Date, Vyteris and Ferring shall meet to
        discuss the scope and contents of a mutual exchange of Know-How relevant
        to the Product and the development thereof, and shall, upon reaching
        agreement, promptly exchange such Know-How. Thereafter each of the
        parties shall periodically meet to discuss the exchange of any further
        Know-How which may become known to them. During the course of the
        performance of the Development Program hereunder, compliance with this
        Section shall be by regular updates to the members of the Liaison Team.

4.02    With respect to Adverse Events arising during clinical trials, Ferring
        shall be solely responsible for reporting to the appropriate
        authorities.

4.03    During the term of this Agreement and for 10 (ten) years thereafter,
        irrespective of any termination earlier than the expiration of the term
        of this Agreement, neither party shall reveal or disclose to any third
        party any Information received from the other party or otherwise
        developed by either party in the performance of activities in
        furtherance of this Agreement, without first obtaining the written
        consent of that other party, except as may be otherwise provided herein,
        or (a) as may be required for purposes of investigating, developing,
        manufacturing or marketing the Product, or (b) for securing essential or
        desirable authorizations, privileges or rights from governmental
        agencies, or (c) as required to be disclosed to a government agency, or
        (d) as necessary to file or procure patent applications relating to the
        Product, or (e) to carry out any litigation concerning the Product or
        Device. Consent or the reason for refusal shall be provided in a prompt
        and timely manner. This obligation of confidentiality shall not apply to
        such Information that is or becomes a matter of public knowledge, or is
        already in the possession of the receiving party, or is disclosed to the
        receiving party by a third party having the right to do so, or is
        subsequently independently developed by employees or contractors of the
        receiving party or Affiliates thereof who have no knowledge of the
        confidential information disclosed. The parties shall take reasonable
        measures to ensure that no unauthorized use or disclosure is made by
        others to whom access to such information is granted.

                                       13
<PAGE>

4.04    Nothing herein shall be construed as preventing either party from
        disclosing any Information received from the other party to an
        Affiliate, sublicensee, distributor or sub-contractor of the receiving
        party, provided that such Affiliate, sublicensee, distributor or
        sub-contractor has undertaken a similar obligation of confidentiality
        with respect to the Information.

4.05    In the event that a court or other legal or administrative tribunal
        directly or through an appointed master, trustee or receiver assumes
        partial or complete control over the assets of a party to this Agreement
        based on the insolvency or bankruptcy of such party, the bankrupt or
        insolvent party shall promptly notify the court or other tribunal:

        (i)     that Information received from the other party under this
                Agreement remains the property of the other party; and

        (ii)    of the confidentiality obligations under this Agreement.

        In addition, the bankrupt or insolvent party shall, to the extent
        permitted by law, take all steps necessary or desirable to maintain the
        confidentiality of the other party's Information and to ensure that the
        court, other tribunal or appointee maintains such Information in
        confidence in accordance with the terms of this Agreement.

4.06    No public announcement or other disclosure to third parties concerning
        the structure or terms of this Agreement or any work being carried out
        hereunder or the results of such work shall be made either directly or
        indirectly by any party to this Agreement, except as may be legally
        required or as may be required for recording purposes, without first
        obtaining the approval of the other party and agreement upon the nature
        and text of such announcement or disclosure, which approval and
        agreement shall not be unreasonably withheld. The party desiring to make
        any such public announcement or other disclosure shall inform the other
        party of the proposed announcement or disclosure in reasonably
        sufficient time prior to public release and shall provide the other
        party with a written copy thereof to allow such other party to comment
        upon such announcements or disclosure; provided, however, that the
        contents of any public announcement, press release or similar publicity
        which has been reviewed and approved can be subsequently re-released by
        either party in any form without a requirement for re-approval provided
        the re-releasing

                                       14
<PAGE>

        party advises the other party prior to publication of the re-release and
        identifies the media in which it is to be published.

4.07    Ferring and Vyteris agree that they shall issue a joint press release in
        a mutually agreeable form on an agreed upon date no later than seven (7)
        days after January 1, 2005.

4.08    Pursuant to an agreement to maintain confidentiality, any party may
        discuss the terms of this Agreement with, or provide a copy of this
        Agreement to, its accountants, its attorneys and its current, future or
        potential investors or shareholders save that disclosure to potential
        investors shall require the prior written consent of the other party,
        which shall not unreasonably be withheld.

4.09    Either party may discuss the general terms of this Agreement with, but
        not provide a copy of this Agreement or a redacted copy of this
        Agreement to, a current, future or potential investor or shareholder who
        does not execute an agreement to maintain confidentiality, provided that
        (i) after a preliminary conversation, such party has used commercially
        reasonable efforts to have such investor or shareholder execute an
        agreement to maintain confidentiality and (ii) any disclosure pursuant
        to this Section 4.09 may not include the name of the other party, or the
        specific financial terms of this Agreement (in each case, unless and
        until such information is otherwise publicly disclosed).

4.10    Each party agrees that it shall co-operate fully with the other with
        respect to all disclosures regarding this Agreement to or public
        disclosures as required by, the U.S. Securities Exchange Commission, and
        any other governmental or regulatory agencies, provided that the
        disclosing party uses commercially reasonable efforts to seek
        confidential treatment for any Information of either party included in
        any such disclosure.

4.11    Neither during the continuance of the Development Plan, nor for a period
        of 12 (twelve) months thereafter, shall Vyteris submit for written or
        oral publication any manuscript, abstract or the like which includes
        data or other information generated in the course of the Development
        Plan or otherwise provided by Ferring and relating to the Development
        Plan without first obtaining the prior written consent of Ferring, which
        consent shall not be unreasonably withheld. The contribution of each
        party shall be noted in all publications and presentations by
        acknowledgment or co-authorship, whichever is appropriate.

                                       15
<PAGE>

4.12    Nothing in this Agreement shall be construed as preventing or in any way
        inhibiting either party from complying with statutory and regulatory
        requirements governing the development, manufacture, use and sale or
        other distribution of the Product in any manner that it reasonably deems
        appropriate including, for example, by disclosing to regulatory
        authorities Information or other information received from the other
        party or third parties.

5.      LICENSE FEES

5.01    Ferring will pay Vyteris US dollars two hundred and fifty thousand
        ($250,000) on or before December 31, 2004.

5.02    Ferring shall make further non-creditable, non-refundable payments to
        Vyteris on the occurrence of the following events:

        (i)     US dollars two hundred and fifty thousand ($250,000) upon
                Successful Development (as defined in Appendix E) [*].

        (ii)    US dollars two million five hundred thousand ($2,500,000) upon
                election to initiate Phase II trials pursuant to Section 5.04.

        (iii)   US dollars three million five hundred thousand ($3,500,000) upon
                election to initiate Phase III trials pursuant to Section 5.04.

        (iv)    US dollars two million ($2,000,000) upon the first submission in
                the United States of the NDA or approval by a Regulatory
                Authority (including pricing approval) in the United Kingdom,
                France Germany, Spain or Italy of an application to market the
                Product.

        (v)     US dollars five hundred thousand ($500,000) upon Ferring's
                receipt of FDA approval to market the Product.

5.03    In the event that Vyteris fails to maintain at least three Months Cash
        at all times during the period of the Development Plan, Ferring shall be
        entitled to consider this Agreement terminated and shall have no further
        obligation to make payments to Vyteris under Sections 2.04, 5.01 or 5.02
        of this agreement or to incur any other expense with respect to this
        Agreement or the Development Plan.

                                       16
<PAGE>

5.04    With respect to the initiation of Phase II and Phase III clinical
        trials, and the associated payments set out in 5.02 (ii) and (iii)
        above, Ferring shall:

        (a)     within 150 days after completion of the final subject of the
                Phase I clinical trials, provide written notice to Vyteris that
                Ferring elects to proceed to Phase II clinical trials, and shall
                make the payment under Section 5.02(ii) within thirty (30) days
                after such election; and

        (b)     within 150 days after completion of the final patient in the
                Phase II clinical trials, provide written notice to Vyteris that
                Ferring elects to proceed to Phase III clinical trials, and
                shall make the payment under Section 5.02(iii) within thirty
                (30) days after such election.

        The time limits set in (a) and (b) of this Section may be extended in
        the event of a Force Majeure or in the event that Ferring encounters:
        (i) an unexpected event any part of the Development Plan which requires
        evaluation, clinical or pre-clinical work not anticipated in the
        Development Plan before the next phase of development can be commenced;
        or (ii) any significant and unexpected change in legal regulatory
        requirements in a country in which conduct of some part of the
        Development Plan is envisaged which come into existence after the
        Effective Date and that requires additional time with which to comply
        before the next phase of development can be commenced (e.g. a new
        requirement for Development Plan in specific patient sub groups). With
        respect to subsection (i) of this Section 5.04, the Liaison Team shall
        in the first instance discuss and decide whether further evaluation,
        clinical or pre-clinical work not anticipated in the Development Plan is
        necessary before the next phase of development can be commenced. In the
        event that the Liaison Team cannot agree as to the need for such a delay
        in the commencement of the next phase of development within twenty-eight
        (28) days, the issue shall be considered a "dispute" within the meaning
        of Appendix C hereof, and the additional procedures set forth in
        Appendix C shall be followed for resolving the issue.

5.05    In addition to the payments required under Sections 5.01 and 5.02,
        Ferring shall also make the following payments to Vyteris:

                                       17
<PAGE>

        (a) For a period of 12 months from the date on which Ferring is first
        granted marketing approval to sell the product in any country, Ferring
        shall pay to Vyteris a revenue share percentage based on Net Sales as
        follows:

                [*]

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

                [*]

5.06    The obligation of Ferring pursuant to Section 5.05 to make revenue share
        payments to Vyteris for sales by Ferring of the Product shall expire on
        the [*] of the Launch, whereupon Ferring's License hereunder shall be
        deemed fully paid up. Ferring shall be obligated to make revenue share
        payments to Vyteris pursuant to Section 5.05, whether or not Ferring
        obtains supplies of Product from Vyteris.

6.      PAYMENT TERMS

6.01    Payments due under Sections 5.05 or 9.08 shall be calculated quarterly
        on a calendar basis and shall be payable within 30 (thirty) days of the
        end of the relevant quarter. Each remittance shall be accompanied by a
        true accounting of all Net Sales and sales by sub-licensees or co
        promoters and any other information, relevant to demonstrating Ferring's
        calculation of Net Sales.

6.02    Any taxes, levies or other duties paid or required to be withheld by the
        paying party on account of monies payable to the receiving party under
        this Agreement shall be deducted from the amount of monies otherwise
        due. The paying party shall secure and send to the receiving party proof
        of any such taxes, levies or other duties withheld and paid by the
        paying party or its Affiliates, co-promoters, co-marketeers,
        distributors or sublicensees for the benefit of the receiving party.

6.03    The receiving party with respect to any revenue share payment or other
        payment hereunder shall have the right at its own expense (save as
        provided below) for an independent certified public accountant or like
        person reasonably acceptable to the other

                                       18
<PAGE>

        party to examine all records including those held by sublicensees and
        co-promoters relating to Net Sales and sales by sub-licensees and
        co-promoters and any other relevant information during regular business
        hours during the life of this Agreement and for two (2) years after its
        termination, provided however, that such examination shall not take
        place more than once a year, and shall not cover such records for more
        than the preceding two (2) years and, provided further that such
        accountant shall report to said receiving party only as to the accuracy
        of the payments made to it by the other party under this Agreement. In
        the event that such inspection reveals a discrepancy in payment for the
        period audited made in excess of 5%, the inspected party shall pay the
        accountants' reasonable fees and expenses in connection with the
        inspection. Any sums found to be owing to either party as a result of
        the inspection shall be paid over within thirty (30) days.

6.04    All payments due under this Agreement shall be payable in US dollars. If
        governmental regulations prevent remittances from a foreign country with
        respect to sales made in that country, any obligation to make payments
        based on sales in that country shall be suspended until such remittances
        are possible. The receiving party shall have the right however, upon
        giving written notice to the other party, to receive payment in that
        country in local currency.

6.05    Monetary conversion of Net Sales made outside the United States into US
        dollars shall be calculated using monthly exchange rates as used by
        Ferring in producing its quarterly and annual accounts as confirmed by
        Ferring's auditors.

6.06    Either party shall, without prejudice to its other rights, be entitled
        to charge the other party interest on overdue payments of 2% (two
        percent) per annum above EURIBOR accruing at a daily rate from the date
        payment becomes due until payment is made.

7. PATENT PROSECUTION AND INFRINGEMENT

7.01    PATENT PROSECUTION

(a)     GENERAL. Each party shall be responsible, at its sole expense and
        discretion, with the reasonable cooperation of the other party, for the
        filing, prosecution and maintenance

                                       19
<PAGE>

        of foreign and United States patent applications covering the
        Intellectual Property owned by the party. Each party will keep the other
        advised in confidence of any plans it may have to initiate a patent
        application in relation to technology reasonably relevant to the subject
        matter of this Agreement.

(b)     PATENT PROSECUTION. During the Term Vyteris shall, at its sole expense,
        file, prosecute, maintain and defend in the applicable patent office the
        Vyteris Patents, if such rights are available, in the countries listed
        in Appendix F ("Designated Countries"), and shall control all filings
        and actions in relation to such Vyteris Patents. Vyteris shall file and
        prosecute to obtain extensions of all Vyteris Patents in any Designated
        Country in which such extensions are available. Notwithstanding the
        foregoing, Vyteris shall not be required to file, maintain or defend any
        patent or to obtain any extensions of any Vyteris Patents where Vyteris
        does not believe that such activities are commercially justified, except
        that Vyteris shall not, without Ferring's prior written consent, abandon
        (i) any currently issued Vyteris Patents, or (ii) any patent
        applications detailed in Appendix A or (iii) petitions for extensions of
        Vyteris Patents. Vyteris shall promptly notify Ferring, and Ferring
        shall have the right, at its expense, to undertake such activities,
        Vyteris shall assist Ferring as reasonably requested by Ferring and at
        Ferring's expense, in the event Ferring determines to undertake such
        activities. Ferring may ask Vyteris to file, prosecute and monitor
        Vyteris Patents in countries other than those listed in Appendix F, but
        in such instances all associated out of pocket expenses shall be paid by
        Ferring.

(c)     Joint Collaboration IP. The Parties shall jointly make all decisions
        regarding whether and how to file, prosecute and maintain any Patent
        Rights in any Joint Collaboration IP, including without limitation,
        which party shall or may take the lead role in the filing, prosecution
        or maintenance of such Joint Collaboration IP Patent Rights, In the
        event that either party declines to file, prosecute or maintain such
        Joint Collaboration IP Patent Rights, the Parties shall agree whether to
        allow any such Joint Collaboration IP Patent Rights to lapse, or whether
        to abandon any such Joint Collaboration IP Patent Rights before all
        appeals within the respective patent office have been exhausted or
        whether one party should be permitted to pursue the patenting
        opportunity alone; provided, however, that, in the event of a dispute
        with respect to any such decisions that the parties are unable

                                       20
<PAGE>

        to agree to, mutually acceptable outside patent counsel not regularly
        employed by any party or their Affiliates shall be retained to resolve
        such dispute by mediation and in .

(d)     Cooperation and Assistance. The parties agree to cooperate with each
        other and render all reasonable assistance as may be necessary to
        support any patent application filed by the other party under this
        Section 7.01, including, but not limited to, consulting and coordinating
        with each other on any such patent filing activities to ensure that any
        Patent Rights or confidential Information are not unduly compromised.

7.02.   PATENT ENFORCEMENT

(a)     Initial Rights. Ferring shall have the initial right, but not the
        obligation, at its cost to bring any legal action related to
        infringements of the Vyteris Patents or Joint Collaboration IP Patent
        Rights that impact adversely on the enjoyment by Ferring of the License
        granted hereunder. Vyteris shall have the right, but not the obligation,
        at its cost to bring any other infringement action associated with the
        Vyteris Patents or the Joint Collaboration IP Patent Rights. Vyteris may
        at any time join in any infringement action brought by Ferring under the
        Vyteris Patents or the Joint Collaboration IP Patent Rights, and may be
        represented by counsel of its choice, but control of such action shall
        remain with Ferring. Vyteris shall join in any infringement proceeding
        as a party at Ferring's request in the event that an adverse party
        asserts, or Ferring determines in good faith, that a court or other
        legal body lacks jurisdiction based on Vyteris' absence as a party in
        such proceeding, or with respect to Joint Collaboration IP Patent Rights
        where such joinder is necessary or desirable to proceed with such claim.

(b)     STEP-IN RIGHTS. If within ninety (90) days after having been notified of
        a relevant alleged infringement, Ferring has been unsuccessful in
        persuading the alleged infringer to desist and has not brought and will
        not be diligently prosecuting an infringement action, or if Ferring
        notifies Vyteris at any time prior thereto of its intention not to bring
        suit against any alleged infringer, then Vyteris shall have the right,
        but not the obligation, to prosecute at its own expense any action with
        respect to such infringement of the Vyteris Patents or the Joint
        Collaboration IP Patent Rights. The total cost of any such infringement
        action commenced or defended solely by Vyteris will be borne by Vyteris,
        and Vyteris shall be entitled to keep any recovery or damages recovered
        therefrom.

                                       21
<PAGE>

        Ferring shall join in any such infringement action as a party, at the
        request and expense of Vyteris, in the event that the court rules or
        other laws then applicable shall require the joinder of Ferring for
        purposes of prosecuting such infringement action, or if the joinder of
        Ferring is necessary under patent laws to pursue lost profits or other
        damages or relief against the third party.

(c)     COSTS. Each party shall unless otherwise stated in this Section 7 assume
        and pay all of its own out-of-pocket costs incurred in connection with
        any litigation or proceedings described in this Section 7, including,
        without limitation, the fees and expenses of such party's counsel.

(d)     RECOVERIES. Any recovery obtained by either party as a result of any
        proceeding described in Section 7.02(a) or from any counterclaim or
        similar claim asserted in a proceeding described in Section 7.02(g), by
        settlement or otherwise, shall be applied as follows: First, to
        reimburse each party for all litigation costs incurred in connection
        with such proceeding paid by that party (on a pro rata basis based on
        each party's respective litigation costs, to the extent the recovery was
        less than all such litigation costs); and Second, the remainder of the
        recovery shall be paid 80% to Ferring and 20% to Vyteris.

(e)     COOPERATION; SETTLEMENTS. In the event that any party takes action
        pursuant to this Section 7.02, the other party shall cooperate with the
        party so acting to the extent reasonably possible, including the joining
        of suit as required by this Agreement or as otherwise desirable and, to
        the extent possible, make available relevant records, papers,
        information, samples, specimens, and the like. No party participating in
        such suit shall settle or compromise any claim or proceeding relating to
        another party's rights without obtaining the prior written consent of
        such other party.

(f)     DECLARATORY JUDGMENT. In the event that a declaratory judgment action or
        other proceeding alleging invalidity or non-infringement of any of the
        Vyteris Patents is brought or sought against Ferring, Vyteris, at its
        option, shall have the right, within thirty (30) days after notice of
        commencement of such action, to intervene and take over the sole defense
        of the action at its own expense.

(g)     PATENT INVALIDITY CLAIM. If a third party at any time asserts a claim
        that any of the VYTERIS Patents is invalid or otherwise unenforceable
        (an "Invalidity Claim"), whether as a

                                       22
<PAGE>

        defense in an infringement action brought by a party pursuant to Section
        7.02(a) or (b), or in an action brought against a party pursuant to
        Section 7.02(f), the general concepts of this Section 7 shall apply to
        such Invalidity Claim (I.E., Ferring shall have the initial right, and
        Vyteris shall have a step-in right in the case of claims that impact
        adversely on the enjoyment by Ferring of the License granted hereunder,
        to defend such Invalidity Claim). No party shall settle or compromise
        any Invalidity Claim without obtaining the prior written consent of the
        other party.

(h)     INFRINGEMENT OF THIRD PARTY RIGHTS. In the event that a third party
        alleges that the Product infringes its intellectual property as a result
        of the practice of the Vyteris IP, Vyteris shall use its best
        commercially reasonable efforts at its own expense to resolve the
        dispute to allow Ferring to continue to enjoy the rights contemplated by
        this Agreement should. Should Vyteris in its discretion deem a royalty
        to the third party to be the most appropriate way to resolve the
        dispute, such royalty shall be paid by Vyteris. If Vyteris is unable to
        resolve the dispute on commercially reasonable terms, Ferring may in its
        sole discretion decide that the outcome of the dispute whether by court
        judgment or settlement is such that continuing the Agreement is no
        longer in its best commercial interest and shall be entitled to
        terminate the agreement on the terms set out in Section 9.04.

8.      INTELLECTUAL PROPERTY

8.01    Ferring, at its expense, shall be responsible for the selection,
        registration and maintenance of all trademarks (excluding Vyteris
        Trademarks) that Ferring employs in connection with the Product in
        whatever countries it has marketing rights. It is understood that
        Ferring may sub-license such marks from Affiliates.

8.02    Vyteris hereby grants to Ferring a non-transferable, royalty free
        license, which it shall be entitled to exercise at its sole option in
        any country, to display a trade mark owned by Vyteris and applied by
        Vyteris generally to the [*] technology it has developed ("Vyteris
        Trademark") solely with respect to advertising and marketing of the
        Products purchased, or to be purchased, during the Term by Ferring from
        Vyteris, and not for any other purpose, in addition to the mark selected
        by Ferring under 8.01 above. Ferring shall not

                                       23
<PAGE>

        be entitled to alter any Vyteris Trademark or to transfer any rights
        relating to any Vyteris Trademark to any third party (saving only rights
        of use granted to a sublicensee in relation to Product) or to apply any
        Vyteris Trademark to any other product without the prior written consent
        of Vyteris. Ferring acknowledges the right, title and interest of
        Vyteris in the Vyteris Trademark and agrees that any goodwill generated
        by Ferring's use or display of the Vyteris Trademark will inure to the
        benefit of Vyteris. Ferring further acknowledges that neither this
        Agreement nor the use by Ferring of the Trademarks shall create any
        right, title or interest in or to the Trademarks by Ferring. Ferring
        shall submit all proposed uses of the Vyteris Trademark to Vyteris for
        its prior approval, which approval shall not be unreasonably withheld,
        conditioned or delayed, and Ferring further agrees that the nature and
        quality of all proposed uses of the Vyteris Trademark under the terms of
        this Agreement shall conform to standards reasonably established from
        time to time by Vyteris and notice of which is furnished by Vyteris to
        Ferring. Ferring agrees to cooperate with Vyteris in efforts by Vyteris
        to facilitate the control of such nature and quality, to permit
        reasonable inspection of Ferring's uses of the Vyteris Trademark and to
        provide Vyteris with details regarding such uses as reasonably requested
        by Vyteris. Ferring agrees to use the Vyteris Trademark only in the form
        and manner approved by Vyteris, subject to the other provisions hereof.
        Ferring agrees not to use the Vyteris Trademark in combination with any
        other trademark or service mark without prior written and signed
        authorization from Vyteris. This Agreement is not intended to convey and
        does not convey to Ferring the right to display or use any trademarks or
        service marks of Vyteris other than the Vyteris Trademark.

8.03    The parties agree that, subject to the License granted to Ferring under
        Section 2.01 above, the trade mark license granted in Section 8.01
        above, and except as otherwise provided in Sections 8.04, 8.05 and 8.06
        below, the Device and Product belong solely and exclusively to Vyteris.

8.04    Ferring shall own the NDA and all similar regulatory filings related to
        the Product. Vyteris shall own the DMF and all similar regulatory
        filings related to the Product.

8.05    As between Ferring and Vyteris, Ferring shall own all Ferring IP and
        Vyteris shall own all Vyteris IP. Vyteris hereby grants to Ferring an
        irrevocable, perpetual, non-exclusive, royalty-free, sublicensable
        license to practice in all fields any Improvement to Ferring IP

                                       24
<PAGE>

        that is conceived and reduced to practice or developed solely by Vyteris
        during, and in the conduct of, the Development Program. Ferring hereby
        grants to Vyteris an irrevocable, perpetual, non-exclusive,
        royalty-free, sublicensable license to practice in all fields any
        Improvement to Vyteris IP that is conceived and reduced to practice or
        developed solely by Ferring during, and in the conduct of, the
        Development Program. Ferring hereby grants Vyteris an option to take a
        non-exclusive license under Ferring Collaboration IP other than
        Improvements to Vyteris IP, for uses other than the [*]. Such option
        shall be exercised by Vyteris in writing within six months of Ferring's
        advising Vyteris of the development of such Ferring Collaboration IP. On
        receipt by Ferring of written notice from Vyteris that it wishes to
        exercise its option, the parties will enter into good faith negotiations
        as to the terms of such license. If within six months of starting these
        negotiations no agreement has been reached by the parties, Ferring shall
        be free to enter into a license arrangement with a third party but for a
        further six months shall not offer to a third party terms more favorable
        to such third party than those last offered to Vyteris.

8.06    All Joint Collaboration IP shall be owned jointly on the basis of an
        undivided one-half interest by Ferring and Vyteris. Vyteris hereby
        grants to Ferring an irrevocable, perpetual, exclusive, royalty-free,
        sublicensable license to practice the Joint Collaboration IP with
        respect to the [*]. Ferring hereby grants to Vyteris an irrevocable,
        perpetual, exclusive, royalty-free, sublicensable license to practice
        the Joint Collaboration IP with respect to the iontophoretic
        administration of [*]. The parties acknowledge and agree that the
        termination pursuant to Article 9 of any license granted pursuant to
        this Section 8.06 shall have no effect other than to terminate any grant
        of exclusivity under Joint Collaboration IP, and shall not otherwise
        affect a party's rights as a joint owner of any Joint Collaboration IP.

8.07    Inventorship shall be determined by the parties in good faith in
        accordance with relevant patent laws. In the event of a dispute
        regarding inventorship or the ownership of Intellectual Property created
        or developed during the Development Program that the parties are unable
        to resolve, mutually acceptable outside patent counsel not regularly
        employed by any party or their Affiliates shall be retained to
        adjudicate such dispute.

8.08    Any rights of Ferring not expressly granted to Vyteris under the
        provisions of this Agreement shall be retained by Ferring and any rights
        of Vyteris not expressly granted to Ferring under the provisions of this
        Agreement shall be retained by Vyteris.

                                       25
<PAGE>

9.      TERM AND TERMINATION

9.01    This Agreement shall become effective on the Effective Date and shall,
        unless earlier terminated, continue in effect while any obligation
        remains on either party to make any payment to the other. Ferring's
        right to develop, manufacture, market and distribute the Product shall,
        unless terminated earlier pursuant to Sections 5.03, 7.02(h), 9.02,
        9.03, or 9.04, continue notwithstanding the expiration of Ferring's
        obligation to make revenue share payments, as provided in Section 5.06.

9.02    If either party fails or neglects to perform any material covenant or
        provision of this Agreement or the Supply Agreement, and if such default
        is not corrected within sixty (60) days after receiving written notice
        from the other party with respect to such default, the non-defaulting
        party shall have the right to terminate this Agreement by giving written
        notice to the party in default, provided the notice of termination is
        given within six (6) months of the default and prior to correction of
        the default.

9.03    Either party may terminate this Agreement if at any time if the other
        party shall file in any Court or agency pursuant to any statute or
        regulation of any state or country a petition in bankruptcy or
        insolvency or for re-organisation (other than for the purposes of merger
        or amalgamation) or for an arrangement with its creditors or for the
        appointment of a receiver or trustee of the party or of its assets or if
        that party proposes a written agreement of composition or extension of
        its debts or shall be served with an involuntary petition against it
        filed in any insolvency proceeding, and such petition shall not be
        dismissed within 60 (sixty) days after the filing thereof or if such
        party shall propose or be a party to any dissolution or liquidation or
        shall make an assignment for the benefit of its creditors.

9.04    Ferring shall be entitled, upon [*] prior written notice to Vyteris, to
        terminate this Agreement in writing at any time.

9.05    Upon Vyteris's termination of Ferring's rights under this Agreement, in
        whole or in part, pursuant to 9.02 or 9.03, or Ferring's termination of
        the Agreement where Ferring gives notice of termination of this
        Agreement , after December 31, 2004, pursuant to Section 9.04: (a)
        Ferring shall within thirty (30) days of such termination pay to Vyteris
        in full all unpaid amounts otherwise due to Vyteris in accordance with
        this Agreement; (b) all licenses and other rights granted to Vyteris
        shall, subject to the continued payment to

                                       26
<PAGE>

        Ferring of the amounts provided under Section 9.08, be converted to and
        continue as exclusive, worldwide irrevocable, perpetual, sublicenseable
        licenses to develop, make, have made, use, sell, offer to sell, lease,
        distribute, import and export the Product; (c) all licenses and other
        rights granted to Ferring hereunder shall be terminated as of the
        effective date of the termination, excluding any license rights granted
        pursuant to Section 8.05, which shall remain in effect, but shall be
        restricted to preclude the practice by Ferring of such rights in the
        field of the [*]; (cd) Ferring shall grant to Vyteris an irrevocable,
        perpetual, exclusive, royalty-free, sublicensable license to practice
        the Joint Collaboration IP with respect to the [*]; (e) Ferring shall
        cease to use and shall assign to Vyteris all of its right, title and
        interest in and to all clinical, technical and other relevant reports,
        records, data, information and materials relating exclusively to the
        Product and all regulatory filings (including any NDA, 510(k) or similar
        regulatory filing) relating exclusively to the Product and provide to
        Vyteris one (1) copy of each physical embodiment of the aforementioned
        items within thirty (30) days after such termination; (f) Ferring shall
        cease to use any Know-How, Information or Materials arising under this
        Agreement to the extent such Know-How, Information or Materials is owned
        by Vyteris; and (g) Ferring shall promptly return to Vyteris all
        Information, Vyteris Know-How, and other materials and records in their
        possession or control relating exclusively to the Product.

9.06    Upon Ferring's giving notice of termination of this Agreement pursuant
        to Section 5.03 or 9.04 at any time on or before December 31, 2004: (a)
        all licenses and other rights granted by Vyteris to Ferring hereunder
        shall be terminated as of the effective date of the termination,
        excluding any license rights granted pursuant to Section 8.05, which
        shall remain in effect; (b) Ferring shall cease to use any Know-How,
        Information or Materials arising under this Agreement to the extent such
        Know-How, Information or Materials is owned by Vyteris; (c) Ferring
        shall promptly return to Vyteris all Vyteris Information, Vyteris
        Know-How, and other materials and records in their possession or control
        relating exclusively to the Product; (d) all licenses and other rights
        granted by Ferring to Vyteris hereunder shall be terminated as of the
        effective date of the termination, excluding any license rights granted
        pursuant to Section 8.05, which shall remain in effect; (e) Vyteris
        shall cease to use any Know-How, Information or Materials arising

                                       27
<PAGE>

        under this Agreement to the extent such Know-How, Information or
        Materials is owned by Ferring; and (f) Vyteris shall promptly return to
        Ferring all Ferring Information, Ferring Know-How, and other materials
        and records in their possession or control relating exclusively to the
        Product.

9.07    Upon Ferring's termination of this Agreement pursuant to Sections 9.02
        or 9.03: (a) all licenses and other rights granted to Ferring shall
        continue subject to payment of a [*] of Net Sales where termination
        occurs prior to payment by Ferring of the sum set out in Section 5.02
        (ii), a revenue share of [*] should termination occur after such payment
        but before payment of the sum set out in Section 5.20 (iv) or revenue
        shares in accordance with the sums set out in Section 5.05 (a) where
        termination occurs, thereafter in each case the relevant rate from the
        date Ferring is first granted marketing approval to sell the Product in
        any country until the fifteenth anniversary of the launch, (b) all
        licenses and other rights granted by Ferring to Vyteris to use
        intellectual property belonging to Ferring shall be terminated as of the
        effective date of the termination, excluding any license rights granted
        pursuant to Section 8.05, which shall remain in effect, but shall be
        restricted to preclude the practice by Vyteris of such rights in the
        field of the [*]; (c) Vyteris shall grant to Ferring an irrevocable,
        perpetual, exclusive, royalty-free, sublicensable license to practice
        the Joint Collaboration IP with respect to the [*]; (d) Vyteris shall
        cease to use and shall assign to Ferring all of its right, title and
        interest in and to all clinical, technical and other relevant reports,
        records, data, information and materials relating exclusively to the
        Product and the DMF and provide to Ferring one (1) copy of each physical
        embodiment of the aforementioned items within thirty (30) days after
        such termination; e) Vyteris shall cease to use any Ferring Know-How,
        Ferring Information or Ferring Materials arising under this Agreement to
        the extent such Know-How, Information or Material belongs to Ferring;
        and shall promptly return such Information, Know-How, and Materials in
        their possession or control to Ferring.

9.08    Should Vyteris alone or with another partner subsequently commercialise
        the Product following a termination specified in Section 9.05 a royalty
        will be payable on Net Sales to Ferring of [*] if the termination
        occurred after initiation of Phase I but before initiation of Phase II,
        of [*] if termination occurred before initiation of Phase III and of [*]

                                       28
<PAGE>

        should termination occur at any other time prior to receipt of marketing
        authorisation from the FDA.

9.09    Notwithstanding expiration or termination of this Agreement for whatever
        reason, the terms of Sections 4.03, 4.04, 4.05, 4.12, 5.06, 9.05, 9.06,
        9.07, 9.08, 9.09, 10.03, 10.04, 11,15 17.01, and 19.01, Articles 8, 11,
        and 15, and Appendix C shall survive, and remain in full force and
        effect.

10.     WARRANTIES, REPRESENTATIONS, INDEMNIFICATION AND INSURANCE

10.01   Vyteris represents and warrants to the best of its belief and knowledge
        that:

        (a)     it owns the entire right, title and interest in, or is an
                authorized licensee under the Vyteris Patents and Vyteris
                Know-How (subject to the current security interest in the
                Vyteris Patents heretofore granted by Vyteris to certain third
                parties as security for certain financial obligations of
                Vyteris);

        (b)     the entities stated in Appendix H comprise all the security
                holders over any of the Vyteris Patents.

        (c)     it has given or made available to Ferring prior to the Effective
                Date all information relating to Vyteris Patents, Know-How and
                the Product in Vyteris' possession or under its control that
                Vyteris reasonably deems material to this Agreement and will
                provide to Ferring such additional information as is required by
                the terms of this Agreement;

        (d)     it shall, at all times, comply in all material respects with all
                applicable laws, rules and regulations and standards applicable
                to manufacturing and labeling of the Product;

        (e)     the legal, financial and technical information provided to
                Ferring in relation to the due diligence conducted by Ferring
                prior to execution hereof was to the best knowledge of executive
                management of Vyteris accurate and substantially complete in
                relation to Vyteris' ability to carry out its obligation
                hereunder;

        (f)     Vyteris is a corporation organized and validly existing under
                the laws of the State of Delaware and has all requisite
                corporate power and authority to enter into and legally

                                       29
<PAGE>

                perform its obligations under this Agreement without any
                approvals not heretofore obtained or contemplated hereby; and

        (g)     when executed and delivered, this Agreement shall constitute the
                valid and binding obligation of Vyteris, legally enforceable
                against it in accordance with its terms, except as such
                enforceability may be limited by bankruptcy or insolvency laws.

Nothing in this Agreement shall be construed as a warranty that Vyteris Patents
are valid or enforceable or that their exercise does not infringe any patent
rights of third parties.

10.02   Ferring represents and warrants to the best of its belief and knowledge
        that:

        (a)     it shall, at all times, comply in all material respects with all
                applicable laws, rules and regulations and standards applicable
                to the marketing, distribution and sale of the Product;

        (b)     Ferring is a corporation organized and validly existing under
                the laws of Delaware and has all requisite corporate power and
                authority to enter into and legally perform its obligations
                under this Agreement without any approvals not heretofore
                obtained or contemplated hereby; and

        (c)     when executed and delivered, this Agreement shall constitute the
                valid and binding obligation of Ferring, legally enforceable
                against it in accordance with its terms, except as such
                enforceability may be limited by bankruptcy or insolvency laws.

10.03   Each party ("the Indemnifying Party") shall indemnify and hold harmless
        the other, its officers, directors, shareholders, employees, successors
        and assigns ("the Indemnified Party") from any loss, damage or
        liability, including reasonable attorney's fees: (a) resulting from any
        claim, complaint, suit, proceeding or cause of action brought by or on
        behalf of an injured party or a spouse, relative or companion of an
        injured third party, against any of them, alleging personal or related
        injury, including death, loss of service or consortium or a similar such
        claim, due to such personal injury or death, and arising out of the
        manufacture, use, marketing, labeling, distribution or sale of the
        Products by the Indemnifying Party or its Affiliates, co-marketeers,
        co-promoters, distributors and sublicensees; and (b) arising out of or
        resulting from or in connection with the breach by the Indemnifying
        Party of any warranty, representation or agreement in this Agreement.

                                       30
<PAGE>

10.04   With respect to any claim for indemnification asserted by either party
        pursuant to Section 10.03:

        (a)     the Indemnifying Party shall not be obliged to provide
                indemnification if it is shown by evidence acceptable in a court
                of law having jurisdiction over the subject matter in meeting
                the appropriate degree of proof for such action that the injury
                was the result of the negligence or willful misconduct of any
                employee or agent of any of the Indemnified Parties

        (b)     the Indemnifying Party shall have no obligation to indemnify the
                party requesting indemnification unless the Indemnified Party:

                (i)     gives the Indemnifying Party prompt written notice of
                        any claim or lawsuit or other action for which it seeks
                        to be indemnified under this Agreement;

                (ii)    the Indemnifying Party is granted full authority and
                        control over the defense including settlement against
                        such lawsuit or other action; provided, however, that
                        (i) such settlement involves only the payment of
                        monetary damages and no injunctive relief binding on the
                        Indemnified Party, and such monetary damages are paid by
                        the Indemnifying Party, (ii) the Indemnified Party is
                        not required under such settlement to admit any
                        liability, and (iii) the Indemnified Party is released
                        from all further liability with respect to such claim.

                (iii)   the Indemnified Party co-operates fully with the
                        Indemnifying Party and its agents in defense of the
                        claims or lawsuit or other action; and.

        (c)     the Indemnified Party shall have the right to participate, at
                its sole cost and expense, in the defense of any such claim,
                complaint, suit proceeding or cause of action referred to in
                this paragraph utilizing legal counsel of its choice, provided
                however that the Indemnifying Party shall have full authority
                and control to handle any such claim, complaint, suit,
                proceeding or cause of action, including any settlement or other
                disposition thereof, for which indemnification has been sought
                under this Section.

                                       31
<PAGE>

11.     ASSIGNMENT

11.01   This Agreement and the licenses herein granted shall be binding upon and
        inure to the benefit of the successors in interest of the respective
        parties.

11.02   Neither party may assign and/or encumber this agreement without the
        prior written consent of the other party. Notwithstanding the foregoing,
        either party may assign its rights and obligations under this Agreement
        without the consent of the other party to any: (a) of its respective
        Affiliates; (b) company with which it may merge or consolidate; (c)
        company to whom it may transfer substantially all of its assets to which
        this Agreement relates; or (d) company by which it may be acquired
        (including in each case any company created as a new vehicle upon any
        such merger, transfer or acquisition), provided that:

        1.      such company undertakes directly to the other original party
                under this Agreement to be bound by the terms of this Agreement;
                and

        2.      upon such merger, transfer or acquisition, all rights relating
                to the development, manufacture, marketing and sale of Product
                (including Patent Rights, Know-How, regulatory filings and
                licenses and any other intellectual property whatsoever) are
                also vested in such company.

11.03   Nothing in paragraphs 11.01 or 11.02 shall be deemed to prevent either
        party from sub-contracting its obligations under this Agreement to any
        third party. Nor shall anything herein be construed as preventing either
        from disclosing any Information received from the other party to any
        such sub-contractor, providing such sub-contractor has undertaken a
        similar obligation of confidentiality to such contracting party with
        respect to the Information as that party has undertaken under this
        Agreement.

12.     INDEPENDENT CONTRACTORS

12.01   The parties are independent contractors under this Agreement and no
        other relationship is intended, including without limitation to the
        foregoing generality, partnership, joint venture or agency relationship.
        Neither party shall act in a manner that expresses or implies a
        relationship other than of independent contractor with the other party.
        Except as otherwise expressly provided herein, neither party may make
        any representation, warranty or commitment, whether express or implied,
        on behalf of or incur any charges

                                       32
<PAGE>

        or expenses for, or in the name of the other party. Nothing in this
        Agreement shall be deemed to infer any direct relationship between
        Vyteris and any Affiliate of Ferring.

13.     NOTICES

13.01   All notices and other communications required or permitted to be given
        or made pursuant to this Agreement shall be in writing signed by the
        sender and shall be deemed duly given (a) on the date delivered, if
        personally delivered, (b) on the date sent by telecopier with automatic
        confirmation by the transmitting machine showing the proper number of
        pages were transmitted without error, (c) on the Business Day after
        being sent by Federal Express or another recognized overnight mail
        service which utilizes a written form of receipt for next day or next
        business day delivery, or (d) three (3) Business Days after mailing, if
        mailed by United States postage-prepaid certified or registered mail,
        return receipt requested, in each case addressed to the applicable party
        at the address set forth below; provided that a party may change its
        address for receiving notice by the proper giving of notice hereunder:

        FERRING PHARMACEUTICALS INC            400 Rella Boulevard, Suite 300
                                               Suffern, NY 10901
                                               USA
                                               Attention: President
        with a copy to:

        Ferring International Center SA         Avenue du Rhodanie 60
                                               1007 Lausanne
                                               Switzerland
                                               Attention: General Counsel)

        VYTERIS INC                            13-01 Pollitt Drive
                                               Fair Lawn, NJ 07410
                                               USA
                                               (Attention: Chief Executive
                                               Officer)

        With a copy to:                        Peter H. Ehrenberg, Esq.
                                               Lowenstein Sandler P.C.
                                               65 Livingston Avenue
                                               Roseland, NJ 07068

                                       33
<PAGE>

13.02   Any notice required or permitted to be given concerning this Agreement
        shall be effective upon receipt by the party to whom it is addressed.

14.     ENTIRE AGREEMENT; WAIVER

14.01   This Agreement, entered into as of the Effective Date, constitutes the
        entire Agreement between the parties relating to the subject matter
        hereof and supersedes all previous writings and understandings (whether
        in writing or not). No terms or provisions of this Agreement shall be
        varied or modified in any prior or subsequent statement, conduct or act
        of either of the parties except by an instrument in writing signed on
        behalf of each of the parties. The parties may terminate this Agreement
        by written instruments executed on behalf of both parties and making
        express reference to this Agreement.

14.02   By an instrument in writing either party may waive compliance by the
        other party with any term or provision of this Agreement that such other
        party was or is obligated to comply with or perform. Any failure of a
        party to enforce at any time, or for any period of time, any of the
        provisions of this Agreement shall not be deemed or construed to be a
        waiver of such provisions or a waiver of any right of such party
        thereafter to enforce each and every such provision on any succeeding
        occasion or breach thereof.

15.     SEVERABILITY

15.01   In the event any portion of this Agreement shall be held illegal, void
        or ineffective, the remaining portions hereof shall remain in full force
        and effect to the full extent permitted by law.

15.02   If any of the terms or provisions of this Agreement are in conflict with
        any applicable statute or rule of law, then such terms or provisions
        shall be deemed inoperative to the extent that they may conflict
        therewith and shall be deemed to be modified to conform with such
        statute or rule of law.

15.03   In the event that the terms and conditions of this Agreement are
        materially altered as a result of Sections 15.01 or 15.02 above, the
        parties will renegotiate the terms and conditions of this Agreement to
        resolve any resulting inequities.

                                       34
<PAGE>

16.     REGISTRATION

16.01   Either party shall have the right at any time to record, register or
        otherwise notify (collectively, "Register") this Agreement with or to
        appropriate governmental or regulatory offices after having first given
        30 (thirty) days' written notice to the other party of its intention so
        to do; provided however, that if feasible, such Registration shall be
        made pursuant to confidentiality protections, if available, and
        otherwise, except as may be required under law, all financial and other
        material and sensitive business terms of this Agreement shall be
        redacted from any copy of this Agreement that is to Registered. The
        other party shall provide reasonable assistance in effecting such
        Registration.

17.     GOVERNING LAW

17.01   This Agreement and any and all matters arising directly or indirectly
        herefrom, including without limtation the execution, validity,
        construction and effect hereof, shall be governed by and construed and
        enforced in accordance with the internal laws of the State of New York
        applicable to agreements made and to be performed entirely in such
        state, without giving effect to the conflict of law principles thereof.

18.     FORCE MAJEURE

18.01   If either party is prevented from complying, either totally or in part,
        with any of the terms or provisions of this Agreement, by reason of a
        Force Majeure, then, upon written notice by the party liable to perform
        to the other party, the requirements of this Agreement or such of its
        provisions as may be affected (excluding, however, any obligation to pay
        money) and to the extent so affected, shall be suspended during the
        period of such Force Majeure; provided, that the party asserting a Force
        Majeure shall bear the burden of establishing the existence of the Force
        Majeure, shall use its best efforts to remove the Force Majeure, shall
        continue performance with dispatch whenever such causes are removed, and
        shall notify the other party of the Force Majeure not more than ten (10)
        calendar days from the time of the event; provided, however, that the
        party not asserting the Force Majeure shall have the right, upon payment
        of all sums due and owing under this Agreement, to terminate the
        Agreement upon written notice to the party asserting the Force Majeure
        if the Force Majeure continues for more than three months during the
        period prior to Launch, or more than six months during the period after
        Launch.

                                       35
<PAGE>

19.     DISPUTE RESOLUTION

19.01   The parties shall attempt to resolve amicably any disputes arising
        hereunder or in relation to this Agreement, however, should such
        attempts at resolution fail, the matter shall be adjudicated in
        accordance with the procedures set out in Appendix C.

20.     EXECUTION IN COUNTERPARTS

20.01   This Agreement may be executed in any number of counterparts, each of
        which shall be deemed an original but all of which together shall
        constitute one and the same instrument.

                                       36
<PAGE>

In Witness Whereof, the Parties have caused this Agreement to be executed by
their duly authorized representatives.

Ferring Pharmaceuticals Inc.               Vyteris Incorporated

/s/ [Signature of Authorized Person]       /s/ [Signature of Authorized Person]
------------------------------------       ------------------------------------
Print name: [Authorized Person]            Print name: [Authorized Person]
Title: President & CEO                     Title: President & CEO
Date: 9/27/04                              Date: 9/27/04

                                       37
<PAGE>

<TABLE>
<CAPTION>

                                                             APPENDIX A

                                 I. RELEVANT PATENTS AND PATENT APPLICATIONS OWNED BY VYTERIS, INC.
<S>                                                                             <C>
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
KIRKPATRICK &   COUNTRY OR      TITLE                    INVENTOR(S)            [SERIAL NO./FILING DATE]       STATUS
LOCKHART FILE   REGION                                                          PATENT NO./ISSUE DATE
NUMBER

--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Canada          Iontophoretic Drug       James M. Devine        [2,230,813 / 28 Aug. 1996]     Application pending.
                                Delivery Device Having   Ronald J. Flower
                                High-Efficiency DC-to-DC
                                Conversion Circuit
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             European        Iontophoretic Drug       James M. Devine        [96930652.1 / 28 Aug. 1996]    Application pending.
                Patent Office   Delivery Device Having   Ronald J. Flower
                                High-Efficiency DC-to-DC
                                Conversion Circuit
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Iontophoretic Drug       James M. Devine        6,522,919 / 18 Feb. 2003       Patent granted.
                                Delivery Device Having   Ronald J. Flower
                                High-Efficiency DC-to-DC
                                Conversion Circuit
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Iontophoretic Drug       James M. Devine        6,402,732 / 11 Feb. 2003       Patent granted.
                                Delivery Device Having   Ronald J. Flower
                                High-Efficiency DC-to-DC
                                Conversion Circuit
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Method of Increasing the Kenneth E. Garde       6,385,488 / 07 May 2002        Patent granted.
                                Reliability of           Ronald J. Flower
                                Iontophoresis System     Steven D. Walter
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Germany         Method of Increasing the Kenneth E. Garde       [10025027.0 / 20 May 2000]     Application pending.
                                Reliability of           Ronald J. Flower
                                Iontophoresis System     Steven D. Walter
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
</TABLE>

                                       38
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                           <C>
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
KIRKPATRICK &   COUNTRY OR      TITLE                    INVENTOR(S)            [SERIAL NO./FILING DATE]       STATUS
LOCKHART FILE   REGION                                                          PATENT NO./ISSUE DATE
NUMBER

--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             France          Method of Increasing the Kenneth E. Garde       [0006312 / 17 May 2000]        Application pending.
                                Reliability of           Ronald J. Flower
                                Iontophoresis System     Steven D. Walter
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             France          Method of Increasing the Kenneth E. Garde       [0013645 / 17 May 2000]        Application pending.
                                Reliability of           Ronald J. Flower
                                Iontophoresis System     Steven D. Walter
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             France          Method of Increasing the Kenneth E. Garde       [0013639 / 17 May 2000]        Application pending.
                                Reliability of           Ronald J. Flower
                                Iontophoresis System     Steven D. Walter
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Japan           Method of Increasing the Kenneth E. Garde       [2000-147822 / 19 May 2000]    Application pending.
                                Reliability of           Ronald J. Flower
                                Iontophoresis System     Steven D. Walter
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Iontophoretic Drug       Bruce M. Eliash        6,377,847 / 23 Apr. 2002       Patent granted.
                                Delivery Device and      Vilambi Reddy
                                Reservoir and Method of  Preston Keusch
                                Making Same
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Canada          Iontophoretic Drug       Bruce M. Eliash        [2,364,414 / 06 Dec. 2001]     Application pending.
                                Delivery Device and      Vilambi Reddy
                                Reservoir and Method of  Preston Keusch
                                Making Same
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             European        Iontophoretic Drug       Bruce M. Eliash        [00942763.4 / 09 June 2000]    Application pending.
                Patent Office   Delivery Device and      Vilambi Reddy
                                Reservoir and Method of  Preston Keusch
                                Making Same
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Japan           Iontophoretic Drug       Bruce M. Eliash        [2001-501303 / 09 June 2000]   Application pending.
                                Delivery Device and      Vilambi Reddy
                                Reservoir and Method of  Preston Keusch
                                Making Same
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
</TABLE>

                                       39
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                           <C>
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
KIRKPATRICK &   COUNTRY OR      TITLE                    INVENTOR(S)            [SERIAL NO./FILING DATE]       STATUS
LOCKHART FILE   REGION                                                          PATENT NO./ISSUE DATE
NUMBER

--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Shelf Storage Stable     Bruce M. Eliash        6,629,968 / 07 Oct. 2003       Patent granted.
                                Iontophoresis            Kevin J. Carey
                                Reservoir-Electrode and  Vilambi Reddy
                                Iontophoretic System     Preston Keusch
                                Incorporating the        Uday K. Jain
                                Reservoir-Electrode      Vitaly Falevich
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Canada          Shelf Storage Stable     Bruce M. Eliash        [2,413,624 / 29 June 2001]     Application pending.
                                Iontophoresis            Kevin J. Carey
                                Reservoir-Electrode and  Vilambi Reddy
                                Iontophoretic System     Preston Keusch
                                Incorporating the        Uday K. Jain
                                Reservoir-Electrode      Vitaly Falevich
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             European        Shelf Storage Stable     Bruce M. Eliash        [01952340.6 / 29 June 2001]    Application pending.
                Patent Office   Iontophoresis            Kevin J. Carey
                                Reservoir-Electrode and  Vilambi Reddy
                                Iontophoretic System     Preston Keusch
                                Incorporating the        Uday K. Jain
                                Reservoir-Electrode      Vitaly Falevich
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Japan           Shelf Storage Stable     Bruce M. Eliash        [2002-506803 / 29 June 2001]   Application pending.
                                Iontophoresis            Kevin J. Carey
                                Reservoir-Electrode and  Vilambi Reddy
                                Iontophoretic System     Preston Keusch
                                Incorporating the        Uday K. Jain
                                Reservoir-Electrode      Vitaly Falevich
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Shelf Storage Stable     Bruce M. Eliash        6,635,045 / 21 Oct. 2003       Patent granted.
                                Iontophoresis            Kevin J. Carey
                                Reservoir-Electrode and  Vilambi Reddy
                                Iontophoretic System     Preston Keusch
                                Incorporating the        Uday K. Jain
                                Reservoir-Electrode      Vitaly Falevich
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
</TABLE>

                                       40
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                           <C>
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
KIRKPATRICK &   COUNTRY OR      TITLE                    INVENTOR(S)            [SERIAL NO./FILING DATE]       STATUS
LOCKHART FILE   REGION                                                          PATENT NO./ISSUE DATE
NUMBER
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Iontophoresis System     Burton H. Sage         5,246,418 / 21 Sep. 1993       Patent granted.
                                Having Features for      John L. Haynes
                                Reducing Skin Irritation
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Germany         Iontophoresis System     Burton H. Sage         P69225387.4 / 06 May 1998      Granted European
                                Having Features for      John L. Haynes                                        patent registered
                                Reducing Skin Irritation                                                       in Germany. European
                                                                                                               patent wasopposed and
                                                                                                               revoked. Revocation
                                                                                                               currently on appeal.
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             France          Iontophoresis System     Burton H. Sage         0 547 482 / 06 May 1998        European patent
                                Having Features for      John L. Haynes                                        registered in France.
                                Reducing Skin Irritation                                                       European patent was
                                                                                                               opposed and revoked.
                                                                                                               Revocation currently
                                                                                                               on appeal.
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United Kingdom  Iontophoresis System     Burton H. Sage         0 547 482 / 06 May 1998        European patent
                                Having Features for      John L. Haynes                                        registered in United
                                Reducing Skin Irritation                                                       Kingdom. European
                                                                                                               patent was opposed
                                                                                                               and revoked.
                                                                                                               Revocation currently
                                                                                                               on appeal.
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Italy           Iontophoresis System     Burton H. Sage         0 547 482 / 06 May 1998        European patent
                                Having Features for      John L. Haynes                                        registered in Italy.
                                Reducing Skin Irritation                                                       European patent was
                                                                                                               opposed and revoked.
                                                                                                               Revocation currently
                                                                                                               on appeal.
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Japan           Iontophoresis System     Burton H. Sage         2,026,059 / 26 Feb. 1996       Patent granted.
                                Having Features for      John L. Haynes
                                Reducing Skin Irritation
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Locking and Disfiguring  Ronald J. Flower       5,873,850 / 23 Feb. 1999       Patent granted.
                                Mechanism for an         C. Huck
                                Iontophoretic System
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
</TABLE>

                                       41
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                           <C>

                                II. RELEVANT PATENT AND PATENT APPLICATIONS LICENSED TO VYTERIS, INC.

--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
KIRKPATRICK &   COUNTRY OR      TITLE                    INVENTOR(S)            [SERIAL NO./FILING DATE]       STATUS
LOCKHART FILE   REGION                                                          PATENT NO./ISSUE DATE
NUMBER
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Medicament-Loaded        Michael I. Bernhard    6,496,727 / 17 Dec. 2002       Patent granted.
                                Transdermal Reservoir    Ralph Ewall
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Australia       Medicament-Loaded        Michael I. Bernhard    [2001275019 / 02 Dec. 2002]    Application pending.
                                Transdermal Reservoir    Ralph Ewall
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Brazil          Medicament-Loaded        Michael I. Bernhard    [PI 0111367-4 / 02 Dec. 2002]  Application pending.
                                Transdermal Reservoir    Ralph Ewall
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Canada          Medicament-Loaded        Michael I. Bernhard    [2,410,675 / 30 May 2001]      Application pending.
                                Transdermal Reservoir    Ralph Ewall
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
</TABLE>

                                                                 42
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                           <C>
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
KIRKPATRICK &   COUNTRY OR      TITLE                    INVENTOR(S)            [SERIAL NO./FILING DATE]       STATUS
LOCKHART FILE   REGION                                                          PATENT NO./ISSUE DATE
NUMBER
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Peoples         Medicament-Loaded        Michael I. Bernhard    [Unknown / 30 Dec. 2002]       Application pending.
                Republic of     Transdermal Reservoir    Ralph Ewall
                China           and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             European        Medicament-Loaded        Michael I. Bernhard    [01941685.8 / 10 Dec. 2002]    Application pending.
                Patent Office   Transdermal Reservoir    Ralph Ewall
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             India           Medicament-Loaded        Michael I. Bernhard    [IN/PCT/2002/01582 / 26 Dec.   Application pending.
                                Transdermal Reservoir    Ralph Ewall            2002]
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Japan           Medicament-Loaded        Michael I. Bernhard    [2001-587859 / 30 May 2001]    Application pending.
                                Transdermal Reservoir    Ralph Ewall
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Mexico          Medicament-Loaded        Michael I. Bernhard    [PA/a/2002/011849 / 29 Nov.    Application pending.
                                Transdermal Reservoir    Ralph Ewall            2002]
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
</TABLE>

                                                                 43
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                           <C>
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
KIRKPATRICK &   COUNTRY OR      TITLE                    INVENTOR(S)            [SERIAL NO./FILING DATE]       STATUS
LOCKHART FILE   REGION                                                          PATENT NO./ISSUE DATE
NUMBER
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             Singapore       Medicament-Loaded        Michael I. Bernhard    [200207296-5 / 11 Dec. 2002]   Application pending.
                                Transdermal Reservoir    Ralph Ewall
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
[*]             United States   Medicament-Loaded        Michael I. Bernhard    [10/274,533 / 18 Oct. 2002]    Application pending.
                                Transdermal Reservoir    Ralph Ewall
                                and Method for its       C. Karl
                                Formation                Preston Keusch
                                                         Gary B. Kupperblatt
                                                         D. O'Grady
--------------- --------------- ------------------------ ---------------------- ------------------------------ ---------------------
</TABLE>

                                                                 44
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                            <C>
-----------------------------------------------------------------------------------------------------------------------------------
                                                APPENDIX B PROPOSED DEVELOPMENT PLAN
-----------------------------------------------------------------------------------------------------------------------------------
ID         TASK NAME                                                DURATION
---------- -------------------------------------------------------- ---------------------------------------------------------------
1          Advisory Board Meeting                                   [*]
---------- --------------------------------------------------------
2          Prepare Briefing Book & Submit                           [*]
---------- --------------------------------------------------------
3          Send Type B Request/FDA                                  [*]
---------- --------------------------------------------------------
4          Supplies for Tox                                         [*]
---------- --------------------------------------------------------
5          12 Hour Pre-Clin Patch Develop.                          [*]
---------- --------------------------------------------------------
6          Clinical Supplies Phase I                                [*]
---------- --------------------------------------------------------
7          Pre IND Meeting                                          [*]
---------- --------------------------------------------------------
8          Toxicology                                               [*]
---------- --------------------------------------------------------
9          IND Filing                                               [*]
---------- --------------------------------------------------------
10         Phase I                                                  [*]
---------- --------------------------------------------------------
11         12 hr Clin. Patch Development                            [*]
---------- --------------------------------------------------------
12         Commercial Patch Devel./Phase III                        [*]
---------- --------------------------------------------------------
13         12 hr patch tox for Phase II                             [*]
---------- --------------------------------------------------------
14         Human PK with 12 hr                                      [*]
---------- --------------------------------------------------------
15         Clin. Supplies Phase II 12 hr Patch                      [*]
---------- --------------------------------------------------------
16         Phase II                                                 [*]
---------- --------------------------------------------------------
17         Final Commercial Patch Devel.                            [*]
---------- --------------------------------------------------------
18         Clinical Supplies for Phase III                          [*]
---------- --------------------------------------------------------
19         Phase III                                                [*]
---------- --------------------------------------------------------
20         Product Stability for NDA                                [*]
---------- --------------------------------------------------------
21         NDA Preparation                                          [*]
---------- --------------------------------------------------------
22         NDA Filed                                                [*]
---------- --------------------------------------------------------
23         PDUFA                                                    [*]
---------- --------------------------------------------------------
24         NDA Approval                                             [*]
---------- -------------------------------------------------------- ---------------------------------------------------------------
</TABLE>

                                       45
<PAGE>

                                   APPENDIX C
                          DISPUTE RESOLUTION PROCEDURES

The parties recognize that a bona fide dispute as to certain matters may arise
from time to time during the term of this Agreement that relates to either
party's rights and/or obligations under the Agreement. The parties further agree
that prior to initiating Alternative Dispute Resolution ("ADR") procedure for
the resolution of such a dispute, a party first must send written notice of the
dispute to the other party for attempted resolution by good faith negotiations
through the Liaison Team, or in the event that resolution proves unsuccessful
within 28 days, the matter shall be referred to the parties' respective Chief
Executive Officers

If the matter has not been resolved within 28 (twenty-eight) days of the
reference to the Chief Executive Officer of the notice of dispute, or if the
parties fail to meet within such 28 (twenty-eight) days, either party may
initiate an ADR proceeding as provided herein. The parties shall have the right
to be represented by counsel in such a proceeding.

1.      To begin an ADR proceeding, a party shall provide written notice to the
        other party of the issues to be resolved by ADR. Within 14 (fourteen)
        days after its receipt of such notice, the other party may, by written
        notice to the party initiating the ADR, add additional issues to be
        resolved within the same ADR.

2.      Within 21 (twenty-one) days following receipt of the original ADR
        notice, the parties shall select a mutually acceptable neutral to
        preside in the resolution of any disputes in this ADR proceeding. If the
        parties are unable to agree on a mutually acceptable neutral within such
        period, either party may request the President of the CPR Institute for
        Dispute Resolution ("CPR"), 366 Madison Avenue, 14th Floor, New York,
        New York 10017, to select a neutral pursuant to the following
        procedures:

        (a)     the CPR shall submit to the parties a list of not less than 5
                (five) candidates within 14 (fourteen) days after receipt of the
                request, along with a Curriculum Vitae for each candidate. No
                candidate shall be an employee, director, or shareholder of
                either party or any of their subsidiaries or Affiliates.

        (b)     such list shall include a statement of disclosure by each
                candidate of any circumstances likely to affect his or her
                impartiality.

                                       46
<PAGE>

        (c)     each party shall number the candidates in order of preference
                (with the number 1 (one) signifying the greatest preference) and
                shall deliver the list to the CPR within 7 (seven) days
                following receipt of the list of candidates. If a party believes
                a conflict of interest exists regarding any of the candidates,
                that party shall provide a written explanation of the conflict
                to the CPR along with its list showing its order of preference
                for the candidates. Any party failing to return a list of
                preferences on time shall be deemed to have no order of
                preference.

        (d)     if the parties collectively have identified fewer than 3 (three)
                candidates deemed to have conflicts, the CPR immediately shall
                designate as the neutral the candidate for whom the parties
                collective have indicated the greatest preference. If a tie
                should result between 2 (two) candidates, the CPR may designate
                either candidate. If the parties collectively have identified 3
                (three) or more candidates deemed to have conflicts, the CPR
                shall review the explanations regarding conflicts and, in its
                sole discretion, may either (i) immediately designate as the
                neutral the candidate for whom the parties collectively have
                indicated the greatest preference, or (ii) issue a new list of
                not less than 5 (five) candidates, in which case the procedures
                set forth in sub-paragraphs 2(a) - 2(d) shall be repeated.

3.      No earlier than 28 (twenty-eight) days or later than 56 (fifty-six) days
        after selection, the neutral shall hold a hearing to resolve each of the
        issues identified by the parties. The ADR proceeding shall take place at
        a location within New York or New Jersey agreed upon by the parties. If
        the parties cannot agree, the neutral shall designate a location in the
        United States other than the principal place of business of either party
        or any of their subsidiaries or Affiliates. Each party to the proceeding
        shall be entitled to make 1 (one) written list of document requests to
        the other party, subject to the right of the neutral to rule on any
        objection to such request, which shall not be subject to appeal.

4.      At least 7 (seven) days prior to the hearing, each party shall submit
        the following to the other party and the neutral:-

        (a)     a copy of all exhibits on which such party intends to rely in
                any oral or written presentation to the neutral;

        (b)     a list of any witnesses such party intends to call at the
                hearing, and a short summary of the anticipated testimony of
                each witness;

                                       47
<PAGE>

        (c)     a proposed ruling on each issue to be resolved, together with a
                request for a specific damage award or other remedy for each
                issue. The proposed rulings and remedies shall not contain any
                recitation of the facts or any legal arguments and shall not
                exceed 1 (one) page per issue;

        (d)     a brief in support of such party's proposed rulings and
                remedies, provided that the brief shall not exceed 25 (twenty
                five) pages. This page limitation shall apply regardless of the
                number of issues raised in the ADR proceeding.

5.      The hearing shall be conducted on 2 (two) consecutive days and shall be
        governed by the following rules:

        (a)     Each party shall be entitled to 5 (five) hours of hearing time
                to present its case. The neutral shall determine whether each
                party has had the 5 (five) hours to which it is entitled.

        (b)     Each party shall be entitled, but not required, to make an
                opening statement, to present regular and rebuttal testimony,
                documents or other evidence, to cross-examine witnesses, and to
                make a closing argument. Cross-examination of witnesses shall
                occur immediately after their direct testimony, and
                cross-examination time shall be charged against the party
                conducting the cross-examination.

        (c)     The party initiating the ADR shall begin the hearing and, if it
                chooses to make an opening statement, shall address not only
                issues it raised but also any issues raised by the responding
                party. The responding party, if it chooses to make an opening
                statement, also shall address all issues raised in the ADR.
                Thereafter, the presentation of regular and rebuttal testimony
                and documents, other evidence, and closing arguments shall
                proceeding the same sequence.

        (d)     Settlement negotiations, including any statements made therein,
                shall not be admissible under any circumstances. Affidavits
                prepared for purposes of the ADR hearing also shall not be
                admissible. As to all other matters, the neutral shall have sole
                discretion regarding the admissibility of any evidence.

                                       48
<PAGE>

6.      Within 7 (seven) days following completion of the hearing, each party
        may submit to the other party and the neutral a post-hearing brief in
        support of its proposed rulings and remedies, provided that such brief
        shall not contain or discuss any new evidence and shall not exceed 25
        (twenty five) pages. This page limitation shall apply regardless of the
        number of issues raised in the ADR proceeding.

7.      The neutral shall rule on each disputed issue within 14 (fourteen) days
        following completion of the hearing. The neutral shall issue a written
        opinion concisely explaining the basis of its rulings.

8.      The neutral shall be paid a reasonable fee plus reasonable expenses. The
        parties shall each pay fifty percent (50%) of the neutral fees plus
        reasonable expenses, and any expenses of a court reporter and a hearing
        room. Each party shall be solely responsible for its own legal expenses
        and costs, including expert witness fees and expenses.

9.      The rulings of the neutral arbitrator shall be binding, non-reviewable,
        and non-appealable, and may be entered as a final judgment in any court
        having jurisdiction.

10.     Except as provided in paragraph 9 or as required by law, the existence
        of the dispute, any settlement negotiations, the ADR hearing, any
        submissions (including exhibits, testimony, proposed rulings and
        briefs), and the rulings shall be deemed Confidential Information. The
        neutral shall have the authority to impose sanctions for unauthorized
        disclosures of Confidential Information or other procedural abuses by a
        party during the course of the ADR proceeding.

                                       49
<PAGE>

                                   APPENDIX D
                          DEVELOPMENT COST METHODOLOGY

Costing Methodology:

Costs to be included in Vyteris' development budget pursuant to Section 2.04,
shall consist of:

        o       Personnel according to the following schedule:

                [*]

        o       Materials used in the Development Plan
        o       Costs of third parties engaged by Vyteris to support
                implementation of the Development Plan

The hourly costs of Vyteris employees will be charged for each hour that the
employees work on the Development Plan, as evidenced by time sheets, and are
meant to capture the costs of salary, benefits and bonuses of those employees,
allocations of departmental management and support staff not directly involved
in the Development Plan, reasonable and customary allocations of overhead costs
including but not limited to occupancy costs, utilities, waste removal, cleaning
services, insurance, equipment maintenance and calibration, laboratory supplies,
communications costs, depreciation of lab equipment, depreciation of building
systems, depreciation of communication and computer equipment, safety programs
and employee training, etc.

                                       50
<PAGE>

                                   APPENDIX E
                             PATCH SPECIFICATION [*]

                          Product Features/Specs - [*]
           -----------------------------------------------------------

Time patch is worn:...........................................[*]

Delivery profile:.............................................[*]

Type of patch:................................................[*]

Size of active gel area:......................................[*]

Total size of patch:..........................................[*]

Current density:..............................................[*]

Controller:...................................................[*]

Batteries (replaceable):......................................[*]

Patch Load:...................................................[*]

Drug loading constraints (if any):............................[*]

                     PRODUCT FEATURES/SPECS - FINAL SYSTEM
           -----------------------------------------------------------

Time patch is worn:...........................................[*]

Delivery profile:.............................................[*]

Type of patch:................................................[*]

Size of active gel area:......................................[*]

Total size of patch...........................................[*]

Current density:..............................................[*]

Ratio of patches/controller:..................................[*]

Controller indictors needed:..................................[*]

Batteries (replaceable):......................................[*]

Drug loading constraints (if any):............................[*]

Number of current profiles:...................................[*]

Target shelf-life:............................................[*]

Storage:......................................................[*]

                                       51
<PAGE>

Patch Operating temperature:..................................[*]

                                       52
<PAGE>

                                   APPENDIX F
                        PATENT REGISTRATION COUNTRY LIST
                                       [*]

                                       53
<PAGE>

                                   APPENDIX G

                               Knowledge Exchange

The following is a Plan for the exchange of information and knowledge from
Vyteris to Ferring as it pertains to the [*] program.

<TABLE>
<CAPTION>
<S>                                                                           <C>
-------------------------------- ---------------------------------------------- ---------------------------------
Date/Timing                      Data to be exchange                            Forum
-------------------------------- ---------------------------------------------- ---------------------------------
Within 60 days of signing deal   [*]                                            [*]

-------------------------------- ---------------------------------------------- ---------------------------------
Every 6 months (the 1st one to   [*]                                            [*]
be 6 months after the initial
knowledge exchange)

-------------------------------- ---------------------------------------------- ---------------------------------
As requested, but no more than   [*]                                            [*]
every 4 months

-------------------------------- ---------------------------------------------- ---------------------------------
Once per year                    [*]                                            [*]

-------------------------------- ---------------------------------------------- ---------------------------------
Once per year                    [*]                                            [*]

-------------------------------- ---------------------------------------------- ---------------------------------
Once per year                    [*]                                            [*]
-------------------------------- ---------------------------------------------- ---------------------------------

                                 [*]                                            [*]
-------------------------------- ---------------------------------------------- ---------------------------------
</TABLE>

                                       54
<PAGE>

                                   APPENDIX H

                            LIST OF SECURITY HOLDERS

                                       55

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]