EXHIBIT 10.3

Portions of this Exhibit were omitted and filed separately with the Secretary of
the Commission pursuant to an application for confidential treatment filed with
the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.
Such omissions are designated as ***.

TECHNOLOGY TRANSFER AGREEMENT

LICENSING AGREEMENT BETWEEN

SHIJIAZHUANG PHARMACEUTICAL GROUP CORPORATION

AND

UNIGENE LABORATORIES INC.

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Party A: Shijiazhuang Pharmaceutical Group Corporation

Party B: Unigene Laboratories Inc.

Party A and Party B have agreed to establish a joint venture (JV) to engage in
the production and marketing of bulk recombinant Salmon Calcitonin(sCT), bulk
recombinant Parathyroid Hormone (PTH), and certain other finished products and
to engage in research & development activities related to biotechnology
products. The initial total investment is US$15 million. The said technologies
for the above two kinds of products contributed to the JV by Party B shall be
valued as 30% of the $15 million capital investment, i.e. $4.5 million. The
registered capital is US$7 million. Party A contributes US$3.85 million for an
equity share of 55%, and Party B contributes US$3.15 million which includes its
proprietary technologies for the production of calcitonin and PTH and certain of
their finished products for a value of US$2.1 million and US$1,050,000 cash for
45% equity share of the registered capital. JV desires a license under certain
proprietary and manufacturing technologies of Party B in order to facilitate the
production and marketing of the aforementioned products and to engage in the
development activities, and Party B is willing to grant such a license to JV on
the following terms and conditions.

Chapter I Terms and Conditions

 

  1.1 Party B shall deliver to JV such proprietary technologies represented by
the supporting patents and know-how owned or controlled by it and reasonably
necessary for the manufacturing of recombinant sCT and recombinant PTH, and
shall during the term of this agreement, deliver such other proprietary
technologies owned or controlled by Party B as may be reasonably necessary to
manufacture such other final products as JV may identify, or provide research
and development services, Proprietary technologies may include the stability
data, quality specifications, various physical and chemical data, analytical and
test methods, compositions and formulations, are attached as appendix 1 of this
agreement.

  1.2 The physical and chemical data, quality specifications, test methods,
place of origin and suppliers for the raw and auxiliary materials are attached
as appendix 2 of this agreement.

  1.3 The operational index and methods for all steps and processes in the
production of such products and materials are attached as appendix 3 of this
agreement.

  1.4 The production process flow chart and technical designs and associated
indices are attached as appendix 4 of this agreement.

  1.5 Requirements for equipment and designs in accordance with ICH and/or FDA
guidelines and standards are attached as appendix 5 of this agreement.

  1.6 Requirements for the construction of a manufacturing facility are attached
as appendix 6 of this agreement.

 

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  1.7 Storage requirements for raw and auxiliary materials as well as finished
products are attached as appendix 7 of this agreement.

  1.8 Documents to assist in JV’s successful mastery of the technology through
training and other effective measures offered by Party B are attached as
appendix 8 of this agreement.

  1.9 The technical services offered by competent experts dispatched to JV from
Party B are attached as appendix 9 of this agreement.

  1.10 Party B shall offer advice with regards to the technical designs and
facility issues.

  1.11 When technical problems arise, Party B shall provide prompt assistance.
Details are attached as appendix 10 of this agreement.

  1.12 To establish a Peptide Product Research Platform in the form of Biotech
Research Institute (the Institute) in accordance with the Agreement Between
Shijiazhuang Pharmaceutical Group Company Ltd. and Unigene Laboratories, Inc.
dated April 23, 2008. This platform shall select and develop other biotech
products that hold visible market potential as agreed by both parties based the
technologies provided by Party B. The said Platform technologies include:
recombinant peptide production technologies; oral delivery system for solid
peptide formulations; nasal delivery system for peptide products. Details are
attached as appendix 11 of this agreement. The Institute shall make efforts to
seek external financial and technological support. The terms and conditions for
future technological input from Party B shall be agreed on through separate
discussions.

Chapter II Definitions

 

  2.1 “Technologies” are as set forth in Chapter 1 and the applicable
appendices.

  2.2 “Product(s)” refers to bulk recombinant salmon calcitonin, bulk
recombinant PTH and such final products as may be determined by JV (which may
include, for calcitonin products, injectable, nasal and oral formulations; and
for PTH products, injectable and nasal formulations).

  2.3 “Technical Data” refers to all technical data necessary for the
manufacturing of the Product(s).

  2.4 “Specifications” refers to the specifications set forth in the appendices,
and shall include any specifications adopted and formulated by JV or Party B in
connection with the manufacturing, research or development activities under this
agreement.

  2.5 “Term” is specified in 11.3.

Chapter III License; Delivery of Technology

 

  3.1

Part B hereby grants to JV, during the Term, a license to use the Technologies,
Specifications and Technical Data in the manufacture of Products in the People’s

 

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Republic of China (“PRC”). The license shall be exclusive for the PRC,
non-sublicensable and non-transferable. In the event that the JV desires to
acquire rights for territories other than the PRC, unanimous agreement is
required from the Board of Directors of the JV. During the Term, Party B agrees
not to grant to any third party the right to use the Technologies,
Specifications or Technical Data in connection with the manufacture of Products
in the PRC, or in connection with such other manufacturing, research and
development activities of JV in the PRC, but Party B expressly reserves the
right, for itself and through its licensees, to practice and use the
Technologies, Specifications and Technical Data, elsewhere worldwide outside
PRC, in the manufacture of products other than Products, or in manufacturing,
research and development activities unrelated to the activities of JV. For the
avoidance of doubt, JV obtains no right, title or interest in or to the
Technologies, Specifications or Technical Data other than the license granted
hereunder.

  3.2 Party B should provide JV the Technical Data provided for in Chapter I.

  3.3 Party B should make available to JV the Technical Data stipulated in
appendix 1,2,3,4,5,6,7,11 and JV shall confirm receipt.

  3.4 Party B should complete the obligations cited in appendix 8 and 9 before
JV initiates production.

  3.5 Party B shall assist JV in constructing facilities that meet ICH
guidelines and FDA requirements.

  3.6 The time of training shall commence *** before JV begins production of
Products. Technical service from Party B shall continue under the terms of
appendix 9 until JV is able to *** produce *** of Products.

Chapter IV Improvement and Modification of the Technologies

 

  4.1 In the event JV desires to modify or change the Specifications in order to
satisfy specific requirements of Chinese designing standard, materials, process
equipment and other conditions, it shall first obtain the written approval of
***.

  4.2 In the event *** creates any improvements to the Technologies,
Specifications or Technical Data reasonably necessary to the activities of JV,
it shall deliver such improvements to JV ***. In the event JV creates any
improvements to the Technologies, Specifications or Technical Data, it shall
deliver such improvements to ***.

  4.3 Any such improvements or modifications to the Technologies, Specifications
or Technical Data developed by either party and/or the JV during the term of
this agreement, shall be owned exclusively by Party B. Any new products and/or
intellectual properties developed by the JV independent of *** Technologies
shall be owned and controlled by ***.

 

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Chapter V Quality Inspection and Test

 

  5.1 To ensure the reliability of the Technologies, JV and Party B shall
jointly inspect the performance of the Technologies in production. If necessary,
tests may also be performed or repeated at the plant of Party B. JV can send
representatives to verify the tests at the plant of Party B. JV shall be
responsible for the expenses of the repeated test and travel expenses for the
people of JV, Party B shall be responsible for the expenses of the trip for the
people of Party B. JV shall be responsible for translation.

  5.2 The technical condition of the tested Products shall conform to the
standard set forth by Party B in the contract. After inspection, JV and Party B
shall jointly sign a “Performance Certification” to signify the passage of
inspection. The certificates are signed in 4 copies and each party keeps 2.

  5.3 Under the circumstances that the technical condition of the Products are
unable to meet the standards set forth in the appendices, both parties shall
hold amiable discussion, and work together to analyze the cause and take
measures to eliminate defects and get ready for a second test inspection.

  5.4 If the failure of the *** is due to the performance or failure of
performance of ***, all expenses for the *** shall be borne by ***. If the
failure of the *** is due to the performance or failure of performance of ***,
*** shall bear all the expenses incurred for the ***.

  5.5 Should the *** fail, *** shall compensate the direct losses of *** if it
is due to the ***. This is not limited to *** responsibility for the production
of Products and performance of a *** in accordance with Section 5.4.

  5.6 Should the test fail the ***, both parties shall discuss the issue of
contract performance, and shall provide such technical assistance as the parties
may deem reasonably necessary, and shall implement such procedures, improvements
or modifications to the Technologies, Specifications and Technical Data as the
parties may mutually deem necessary to produce ***. If the test fails ***,
either party may opt to terminate its participation for the project under test,
with no effect on other existing rights and obligations of each party.

Chapter VI Representations and Warranties

 

  6.1 *** represents that the Technologies, Technical Data and Specifications
provided are capable of producing product using the latest technology available
to *** at the time when the contract enters into force. During the Term, any
technological improvement developed by *** that *** believes would result in a
material improvement or cost saving shall be provided to JV. The right to use
such improvement shall be provided to JV for ***.

 

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  6.2 Party B represents and warrants that, to its knowledge, the Technologies,
Specifications and Technical Data are suitable for application and use by a
person (or persons) reasonably familiar with the manufacture of pharmaceutical
products in the manufacture of Products and performance of the research and
development activities contemplated hereunder. Party B represents that the
technology is complete, clear and reliable and transferable in time as per
Chapter III. Further definitions are as follows:

“Complete” means that the technology that is transferred should include all
information necessary to produce Product.

“Reliable” means the products manufactured with Party B’s technology should be
able to meet the technical specifications provided by Party B.

“Clear” means all graphs, tables, symbols and terminology etc. should be readily
discernible.

When the technology and its documents are unable to accord with the stipulation
of 6.2, *** should supply *** the missing information or replace with clear and
reliable data to JV promptly after receipt of JV’s written notice.

  6.3 Party B is responsible to provide technical support to JV to ensure that
it complies with the stipulations of Chapter III and 6.2.

 

6.4

Pursuant to Chapter V, following alternatives should be pursued for solution
should the 3rd test inspection fail:

  6.4.1 When JV is unable to put into production qualified Products, *** is
under obligation to assist JV to take effective measures for improvement until
conforming Products are produced. *** is not responsible for failure due to
issues that are outside *** control.

  6.4.2 If conforming Products are unable to be produced because *** has
provided incorrect Technologies, Specifications or Technical Data, *** shall
provide any technical support reasonably necessary for JV to produce conforming
Products.

  6.5 As long as JV uses the Technologies supplied by ***, Party B guarantees to
supply amidating enzyme to JV at *** and JV shall purchase its requirements of
amidating enzyme exclusively from Party B.

  6.6 JV shall perform peptide drug development applying the Technologies
provided by Party B. Party B may participate in the new product development and
may offer technical assistance as mutually agreed upon by the parties.

Chapter VII Proprietary Technologies

 

  7.1

Party B represents that it owns or controls the Technologies, Specifications and
Technical Data, and to the best knowledge of Party B, there is no third party
claim challenging such ownership or control. Should a third party lodge an
infringement claim

 

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against JV related to the use of the Technologies, Specifications and Technical
Data, Party B shall be responsible for defending and settling the claim. JV
shall comply with all reasonable requests by Party B to effect any settlement or
compromise of such claim.

  7.2 Both parties should fully comply with this agreement. JV shall comply with
the provisions of confidentiality set forth in the Confidentiality Agreement
between the Shijiazhuang Pharmaceutical Group Corporation and Party B dated
October 29, 1998 for the entire Term of this Agreement and shall not reveal or
make public any information or materials regarding the Technologies to any third
party.

Chapter VIII Indemnification

 

  8.1 JV Indemnity.  JV shall indemnify, defend and hold harmless Party B and
its officers, directors, employees, agents, affiliates, and their respective
successors, heirs and assigns and representatives, from and against any and all
claims, damages, losses, suits, proceedings, judgments, liabilities, costs
(including reasonable legal expenses), of any kind (“Losses”), arising out of
any claim, action, lawsuit or other proceeding brought by a third party arising
out of or relating to the research, development, production, marketing and
commercialization services performed by JV hereunder, including, without
limitation, claims based on (i) product liability, bodily injury, risk of bodily
injury, death or property damage, (ii) infringement or misappropriation of third
party patents (except as limited by the Party B Indemnity below) or other
intellectual property rights, or (iii) the failure of JV, or its officers,
directors, employees, agents or affiliates, to comply with applicable laws
related to the matters referred to in the foregoing clauses (i) and (ii), or
(iii) JV’s gross negligence, recklessness or willful misconduct or JV’s material
breach of any representation or warranty set forth in this agreement.

  8.2 Party B Indemnity.  Party B shall indemnify, defend and hold harmless JV
and its officers, directors, employees, agents, affiliates, and their respective
successors, heirs and assigns and representatives, from and against any and all
Losses rising out of or relating to (i) Party B’s gross negligence, recklessness
or willful misconduct, (ii) Party B’s material breach of any representation or
warranty set forth in this agreement, or (iii) a claim that the use of the
proprietary technologies of Party B infringe an issued patent, other than claims
that would not have arisen but for the modification or combination of the
proprietary technologies by or on behalf of JV.

  8.3

Indemnification Procedure.  If a party intends to claim indemnification under
this Chapter (an “Indemnitee”) the Indemnitee shall notify the other party (the
“Indemnitor”) in writing promptly upon becoming aware of any claim that may

 

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be subject to a demand for indemnification (it being understood and agreed,
however, that the failure by an Indemnitee to give such notice shall not relieve
the Indemnitor of its indemnification obligation under this agreement except and
only to the extent that the Indemnitor is actually prejudiced as a result of
such failure to give notice). The Indemnitor shall have the right to assume and
control the defense of the indemnification claim at its own expense with counsel
selected by the Indemnitor and reasonably acceptable to the Indemnitee,
provided, however, that an Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnitee in respect of
such claim. If the Indemnitor does not assume the defense of the indemnification
claim after notice, the Indemnitee may defend the claim but shall have no
obligation to do so. The Indemnitee shall not settle or compromise the
indemnification claim without the prior written consent of the Indemnitor, and
the Indemnitor shall not settle or compromise the indemnification claim in any
manner which would have an adverse effect on the Indemnitee’s interests
(including without limitation any rights under this agreement or the scope,
validity of enforceability of Party B’s rights in and to the proprietary
technologies, without the prior written consent of the Indemnitee, which
consent, in each case, shall not be unreasonably withheld or delayed. The
Indemnitee shall reasonably cooperate with the Indemnitor at the Indemnitor’s
expense and shall make available to the Indemnitor all pertinent information
under the control of the Indemnitee, which information shall be subject to the
Confidentiality Agreement(s) between Party A and Party B.

Chapter IX Arbitration

 

  9.1 Any disputes arising out of the implementation of the agreement should be
subject to friendly negotiation. If no solution can be reached, they should be
referred to arbitration.

  9.2 This agreement shall be governed by and construed under the laws of Hong
Kong, notwithstanding its conflicts of laws provisions. Any arbitration under
this Agreement shall be held in Hong Kong, under the arbitration rules of the
International Chamber of Commerce.

  9.3 The award from the arbitration committee is final and binding on both
parties.

  9.4 The arbitration fees are borne by the losing party.

  9.5 Both parties shall continue the performance of this agreement during
arbitration.

 

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Chapter X Force Majeure

 

  10.1 In the event of severe fire, flood, hurricane, earthquake or other event
outside of either party’s control that affect the performance of the agreement,
the performance should be deferred. And the deferred time should be equivalent
to the time lag caused by such events.

  10.2 The affected party should notify the other party of the force majeure
event without delay and should also submit to the other party for confirmation a
notarized document by competent authority via registered mail.

  10.3 In the event that the force majeure event lasts over 90 days, both
parties shall discuss the issue of continued performance of the agreement.

Chapter XI Validity of the Agreement and Other Issues

 

  11.1 After the joint signature by Party A and Party B, this agreement shall be
submitted to the relevant government authority of Shijiazhuang for approval, and
the date of approval shall be the date when the agreement takes effect.

  11.2 Unless otherwise mutually agreed by the parties during the Term of the
contract, this agreement ceases effect upon the termination of the operation of
JV. Upon the termination of this agreement, JV shall immediately cease all use
of the Technologies, Specifications and Technical Data. The JV shall return or
destroy all tangible and intangible embodiments of the Technologies,
Specifications and Technical Data in its possession to Party B. In the latter
case, the JV shall provide a letter of destruction to Party B without delay.

  11.3 The expiration or termination of this agreement shall not affect any
financial obligations of a party outstanding as of the effective date of the
termination or expiration of this agreement.

  11.4 All appendices to the agreement constitute an inseparable part of this
agreement and bear equal force with this agreement.

  11.5 Only the written documents mutually signed by authorized representatives
of both parties constitute amendments or supplements to the agreement. All these
documents shall be an inseparable part of the agreement.

  11.6 All communication for performing this agreement shall be written in
Chinese and English.

  11.7 No rights or obligations under this agreement shall be assigned,
delegated or transferred to any third party without prior consent from the other
party.

  11.8 This agreement is signed on April (month) 23 (Day), 2008 in four
originals in both English and Chinese versions in Shijiazhuang.

 

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/s/Cai Dongchen Party A: Shijiazhuang Pharmaceutical Group Corporation Legal
Representative: Cai Dongchen, Chairman

 

/s/Warren P. Levy Party B: Unigene Laboratories Inc. Legal Representative:
Warren P. Levy, President and Chief Executive Officer

 

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Appendix 1

Recombinant sCT, recombinant PTH proprietary technologies may include the
stability data, quality specifications, various physical and chemical data,
analytical and test methods, compositions and formulations.

For Appendix I Unigene will provide the Approved Specifications Sheet for:

  1. API *** rsCT

  2. Fortical Nasal Spray

  3. sCT Oral Tablets of ***

  4. API PTH ***

  5. PTH Injection

In addition, a list of Analytical Procedures to Release the aforementioned API
and Products will be provided.

The formulation for Fortical Nasal Spray, PTH Injection, and Oral sCT will be
provided.

 

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Appendix 2

The physical and chemical data, quality specifications, test methods, place of
origin and suppliers for the raw and auxiliary materials

Raw Material List for ***

Raw Material List for PTH ***

Assume *** for all Raw Materials

Provide List of *** that are not ***

A list of *** will be provided for the raw materials used to produce rsCT and
r-PTH ***.

 

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Appendix 3

The operational index and methods for all steps and processes in the production

*** for the following will be transferred:

  1. API *** rsCT

  2. Fortical Nasal Spray

  3. Oral sCT tablets

  4. API PTH ***

  5. PTH Injection

 

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Appendix 4

The production process flow chart and all technical designs and associated
indices

Process Flow Diagram for rsCT ***

Process Flow Diagram for PTH ***

The equipment for producing sCT and PTH are ***. The process flow diagrams and
process descriptions will be sufficient for each of the processes.

 

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Appendix 5

Requirements for equipment and designs in accordance with ICH and/or FDA
guidelines and standards

*** Proposal and Deliverables Relating to *** will serve as the official
equipment and design list. The list will include all *** for the process
equipment and guides for the utilities. *** will supply the Construction *** as
well as the specifications for the Utilities and the facility.

 

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Appendix 6

Requirements for the construction of a manufacturing facility

See Appendix 5 in conjunction with the *** Architectural Proposal and
Deliverables for the API and Final Product Manufacturing Facilities.

 

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Appendix 7

Storage requirements for raw and auxiliary materials as well as finished
products

Quality Manager to provide general list i.e.:

Raw materials store at *** with the exception of:

Stored at ***

Stored at ***

Final Products are stored at ***

 

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Appendix 8

Documents to assist JV’s successful mastery of the technology through training
and other effective measures

Unigene will provide through the Technology Transfer Team the Expertise needed
to effectively implement the manufacturing Technology. Appropriate Team members
will visit China to assist Technology Transfer when necessary. Visits to the
Unigene facility will also be available if necessary.

 

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Appendix 9

The technical services offered by competent experts dispatched to JV from Party
B

The Technology Transfer Team will provide the expertise necessary to satisfy
this responsibility. Members will provide expertise relating to ***.

 

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Appendix 10

When technical problems arise, Party B shall provide prompt assistance.

The Technology Transfer Team and Staff from the R&D Facility will be available
to address technical issues relating to the manufacture of the API and Final
products according to the terms of the Technology Transfer Agreement.

 

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Appendix 11

To establish a Peptide Product Research Platform in the form of Biotech Research
Institute (the Institute) in accordance with the Addendum to the Joint Venture
Agreement signed between CPC and Unigene on April 14, 2008. This platform shall
select and develop other biotech products that hold visible market potential as
agreed by both parties based the technologies provided by Party B. The said
Platform technologies include: recombinant peptide production technologies; oral
delivery system for solid peptide formulations; nasal delivery system for
peptide products. Details are attached as appendix 11 of this agreement. The
Institute shall make efforts to seek external financial and technological
support. The terms and conditions for future technological input from Party B
shall be agreed on through separate discussions.

Programs jointly agreed upon by Unigene and the JV that are related to Unigene’s
SecrePep®, NasaPep® and EnteriPep® Technology will be supported by Unigene.

 

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