THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT THE TRANSFER IS EXEMPT FROM
REGISTRATION UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
10% CONVERTIBLE PROMISSORY NOTE
$1,166,550 Fair Lawn, New Jersey
August 30, 2006
FOR VALUE RECEIVED, the undersigned, Vyteris
corporation (the "Issuer"), hereby unconditionally promises to pay, in
accordance with the Note Purchase Agreement (the "Note Purchase Agreement"),
dated as of the date hereof, by and between the Issuer and Spencer Trask
Specialty Group, LLC, a Delaware
limited liability company (the "Purchaser"), on
the Maturity Date (as defined in the Note Purchase Agreement) to the order of
the Purchaser, at the office of the Purchaser located at 535 Madison Avenue, New
, NY or such other address designated by the Purchaser, in lawful money of
the United States of America and in immediately available funds, the principal
amount of One Million One Hundred Sixty Six Thousand Five Hundred and Fifty
($1,166,550) Dollars. The Issuer further agrees to pay interest on the unpaid
principal amount outstanding hereunder from time to time from the date hereof in
like money at the rates and as and on the dates specified in Section 3.3 of the
Note Purchase Agreement.
This Note is the promissory note referred to in the Note Purchase
Agreement, and is entitled to the benefits thereof, and is subject to voluntary
and mandatory conversions as set forth therein. This Note, and all
representations, warranties, covenants and agreements contained herein and in
the Note Purchase Agreement, shall be binding upon Issuer and its successors and
permitted assigns and shall inure to the benefit of the Purchaser and its
successors and assigns. Issuer may not assign or delegate any of its duties or
obligations under this Note without the written consent of the Purchaser, which
shall not be unreasonably withheld.
Upon the occurrence of any one or more of the Events of Default
specified in the Note Purchase Agreement, all amounts then remaining unpaid on
this Note shall become, or may be declared to be, immediately due and payable,
all as provided in the Note Purchase Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Subject to Sections 3.3 and 10.5 of the Note Purchase Agreement, the
Issuer agrees to pay all of the Purchaser's expenses, including reasonable
attorneys' costs and fees, incurred in collecting sums due under this Note.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York
By: /s/ Timothy J. McIntyre
Name: Timothy J. McIntyre
Title: President & Chief Executive Officer