THIS SECURITY AGREEMENT (this " Agreement "), dated as of this _____ day of July, 2008, is
made by and between VYTERIS, INC. (the " Borrower "), and FERRING PHARMACEUTICALS, INC. (the
" Holder ").
1. The Borrower desires that the Holder make a loan to the Borrower (the “ Loan ”) in the
principal amount of $2,500,000.00, and it is beneficial to the Borrower that the Loan be made.
2. The Loan will be evidenced by a certain Secured Note, of even date herewith (the “ Note ” or “
Secured Note ”) executed by Borrower in favor of the Holder .
3. In order to induce the Holder to make the Loan and for other good and valuable consideration,
receipt of which is acknowledged, and as security for the performance by the Borrower of the Obligations (as
hereinafter defined), the Borrower, has agreed to grant to the Holder, for the benefit of the Holder, a security
interest in the Collateral (as such term is hereinafter defined), on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the Borrower and the Holder, intending to be legally bound, hereby agree as
(a) " Collateral " shall mean the Borrower's equipment more fully described on Exhibit "A"
attached hereto and made a part hereof (the " Equipment "); all goods and general intangibles relating to, arising
from or embedded in the Equipment, all cash and non-cash proceeds (including insurance proceeds) of the
Equipment, all products thereof and all additions and accessions thereto, substitutions therefor and replacements
(b) “ Obligations " shall mean all obligations of the Borrower the Holder under the Note (whether
for principal, interest or otherwise, and including any interest accruing thereon after maturity, or after the filing of
any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to
the Borrower, whether or no