EXHIBIT 10.98
ALLONGE,
AMENDMENT
and
WAIVER
No. 2
Dated as of: April 27, 2006
1. On September 28, 2004, Vyteris, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Specialty
Group, LLC ("STSG") entered into a Securities Purchase Agreement (the "SPA")
with respect to the purchase of 11.5% Senior Secured Grid Notes (the "Notes").
For the purposes of this Allonge, Amendment and Waiver, the term "Noteholders"
shall mean STSG, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Private Equity Fund I, LP, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Private
Equity Fund II, LP, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Private Equity Accredited Fund III, LLC and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Illumination Fund LLC. Subsequently, the Noteholders entered into
a Subordination Agreement, pursuant to which it agreed to subordinate those
Notes to the obligations that Vyteris, Inc.'s parent company, Vyteris Holdings
(Nevada), Inc. (collectively with Vyteris, Inc., the "Vyteris Parties") has to
purchasers of senior secured notes issued on August 19, 2005 (the "Subordination
Agreement"). The SPA, the Notes, the security agreement and any subscription
agreements with respect to the Notes, are referred to in this Allonge, Amendment
and Waiver as the "Transaction Documents." The Transaction Documents have been
previously amended by the Allonge, Amendment and Waiver dated March 29, 2006.
2. Each of the Noteholders hereby waives and forgives any and all
defaults, events of default, covenant defaults, and breaches of the Transaction
Documents by the Vyteris Parties, which have or may have occurred under such
Transaction Documents through and including the date hereof, including, without
limitation, any defaults, events of default, covenant defaults or breaches of
the Transaction Documents by the Vyteris Parties resulting from the aggregate
principal amount of the outstanding loans made pursuant to the Transaction
Documents being in excess of any restrictions on the amounts which the Vyteris
Parties may borrow pursuant to the Transaction Documents (the "Borrowing Base
Issue"). This Allonge, Amendment and Waiver shall serve as a continuing waiver
with respect to the Borrowing Base Issue, and the facts thereof.
3. The Transaction Documents are hereby amended as follows,
notwithstanding anything contained in any of the Transaction Documents to the
contrary (but subject to the limitations on the Noteholders and the other
restrictions set forth in the Subordination Agreement):
(a) all references to the "Maturity Date" or to the date on
which any of the Notes matures, shall mean November 30, 2006;
(b) with respect to the limitations on outstanding principal
amount contained in the Transaction Documents, the Borrower and the Lender with
respect to each Note hereby agree that the Outstanding Principal Amount of all
of the existing Notes may exceed the Limiting Principal Amount and the Available
Loan Amount;
(c) until the Notes are repaid, on the last business day of
each calendar month commencing with December 2005, Vyteris Holdings (Nevada),
Inc., shall issue to the Noteholders (in proportion to the principal amount of
the Notes held by each) warrants to purchase 100,000 shares, in the aggregate,
of Vyteris Holdings (Nevada), Inc. (each of such warrants to terminate five
years following the issuance date thereof, and to have an exercise price of
$2.40 per share of Vyteris Holdings (Nevada), Inc. common stock) (the "Warrant
Terms");
(d) with respect to all interest on the Notes which has
accrued, or will accrue, from and after November 15, 2005, each Noteholder
agrees to forgive the payment of such interest in consideration of the issuance
by Vyteris Holdings (Nevada), Inc. to the Noteholders (in proportion to the
principal amount of the Notes held by each) of warrants to purchase 10,000
shares, in the aggregate, of Vyteris Holdings (Nevada), Inc. common stock on the
last business day of each calendar month commencing with December 2005, until
the Notes are repaid, with such warrants having the Warrant Terms; and
(e) to the extent that interest accrued on the Notes prior to
November 15, 2005, Vyteris, Inc. shall pay such interest to the Noteholders, in
cash, on November 30, 2006.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Specialty Group, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Nonmember Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇ Private Equity Fund I, LP
By: ▇▇▇▇▇ Partners, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. Gioguardi
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager of General Partner
▇▇▇▇▇▇▇ ▇▇▇▇▇ Private Equity Fund II, LP
By: ▇▇▇▇▇ Partners, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. Gioguardi
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager of General Partner
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▇▇▇▇▇▇▇ ▇▇▇▇▇ Private Equity Accredited Fund III, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. Gioguardi
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇ Illumination Fund LLC
By: LLC Management Services, Inc. Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. Gioguardi
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Vyteris Holdings (Nevada), Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President & Chief Executive Officer
Vyteris, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President & Chief Executive Officer
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