Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of March 17, 2006, by
and among Unigene Laboratories Inc., a Delaware corporation, with headquarters
located at 110 Little Falls Road, Fairfield, New Jersey 07004 (the “Company”),
and the investors listed on the Schedule of Buyers attached hereto (each, a
“Buyer” and collectively, the “Buyers”).

WHEREAS:

A. In connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Securities Purchase Agreement”), the Company
has agreed, upon the terms and subject to the conditions of the Securities
Purchase Agreement, to issue and sell on the date hereof to each Buyer
(i) shares (the “Common Shares”) of the Company’s common stock, par value $0.01
per share (the “Common Stock”), and (ii) certain Warrants (the “Warrants”) which
will be exercisable to purchase additional shares of Common Stock (as exercised,
the “Warrant Shares”) in accordance with the terms of the Warrants.

B. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the “1933 Act”), and
applicable state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:

1. Definitions.

As used in this Agreement, the following terms shall have the following
meanings:

(a) “Business Day” means any day other than Saturday, Sunday or any other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.

(b) “Effective Date” means the date that the Registration Statement is first
declared effective by the SEC.

(c) “Effectiveness Deadline” means the date that is 150 days from the Closing
Date.

(d) “Filing Deadline” means the date that is 30 days from the Closing Date.

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

(e) “Investor” means a Buyer, any Permitted Transferee (as such term is defined
in Section 9(g) of the Securities Purchase Agreement) of the Common Shares or
Warrant Shares, as applicable, to whom a Buyer assigns its rights under this
Agreement in accordance with the provisions of this Agreement (including but not
limited to Section 9) and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and any transferee or assignee thereof to
whom a transferee or assignee of the Common Shares or Warrant Shares, as
applicable, assigns its rights under this Agreement in accordance with the
provisions of this Agreement (including but not limited to Section 9) and who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9.

(f) “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and
governmental or any department or agency thereof.

(g) “register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements (as defined
below) in compliance with the 1933 Act and pursuant to Rule 415, and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the SEC.

(h) “Registrable Securities” means (i) the Common Shares, (ii) the Warrant
Shares issued or issuable upon exercise of the Warrants and (iii) any shares of
capital stock issued or issuable with respect to the Common Shares or the
Warrant Shares as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitations on
exercise of the Warrants.

(i) “Registration Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering the Registrable
Securities.

(j) “Required Holders” means the holders of at least a majority of the
Registrable Securities.

(k) “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing
for offering securities on a continuous or delayed basis.

(l) “SEC” means the United States Securities and Exchange Commission.

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.

2. Registration.

(a) Mandatory Registration. Subject to its receipt of the Registration Statement
Questionnaire (as defined below) from each of the Investors, the Company shall
prepare, and, as soon as practicable but in no event later than the Filing
Deadline, file with the SEC the Registration Statement on Form S-3 covering the
resale of all of the Registrable Securities (the date of such filing, the
“Filing Date”). In the event that Form S-3 is unavailable

 

2

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

to the Company for such a registration, the Company shall use such other form as
is available to the Company for such a registration on another appropriate form
reasonably acceptable to the Required Holders, subject to the provisions of
Section 2(d). The Registration Statement prepared pursuant hereto shall register
for resale that number of shares of Common Stock equal to at that number of
Registrable Securities as of the trading day immediately preceding the date the
Registration Statement is initially filed with the SEC, subject to adjustment as
provided in Section 2(e), and shall contain the “Selling Stockholders” section
and “Plan of Distribution” in substantially the form attached hereto as Annex I
(except if otherwise required pursuant to written comments received from the SEC
upon a review of the Registration Statement). Subject to its receipt of the
Registration Statement Questionnaire from each of the Investors, the Company
shall use its reasonable best efforts to have the Registration Statement
declared effective by the SEC as soon as practicable, but in no event later than
the Effectiveness Deadline. By 9:30 am on the second Business Day following the
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final prospectus to be used in connection with sales
pursuant to such Registration Statement.

(b) Allocation of Registrable Securities. The initial number of Registrable
Securities included in any Registration Statement and each increase in the
number of Registrable Securities included therein shall be allocated pro rata
among the Investors based on the number of Registrable Securities held by each
Investor at the time the Registration Statement covering such initial number of
Registrable Securities or increase thereof is declared effective by the SEC. In
the event that an Investor sells or otherwise transfers any of such Investor’s
Registrable Securities, each transferee that becomes an investor shall be
allocated a pro rata portion of the then remaining number of Registrable
Securities included in the Registration Statement for such transferor. Any
shares of Common Stock included in the Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities covered
by such Registration Statement shall be allocated to the remaining Investors,
pro rata based on the number of Registrable Securities then held by such
Investors which are covered by such Registration Statement. In no event shall
the Company include any securities other than Registrable Securities on any
Registration Statement without the prior written consent of Buyers holding at
least a majority of the Registrable Securities.

(c) Legal Counsel. Subject to Section 5 hereof, the Buyers holding at least a
majority of the Registrable Securities shall have the right to select one legal
counsel to review and oversee any registration pursuant to this Section 2
(“Legal Counsel”), which shall be Schulte Roth & Zabel LLP or such other counsel
as thereafter designated by the holders of at least a majority of the
Registrable Securities. The Company and Legal Counsel shall reasonably cooperate
with each other in performing the Company’s and the Investors’ obligations under
this Agreement.

(d) Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on Form S-1 or
another appropriate form reasonably acceptable to the Required Holders and
(ii) undertake to register the Registrable Securities on Form S-3 as soon as
such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.

 

3

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

(e) Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a) is
insufficient to cover all of the Registrable Securities required to be covered
by such Registration Statement or an Investor’s allocated portion of the
Registrable Securities pursuant to Section 2(b), the Company shall amend the
applicable Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least
100% of the number of such Registrable Securities as of the trading day
immediately preceding the date of the filing of such amendment or new or
additional Registration Statement, in each case, as soon as practicable, but in
any event not later than twenty (20) days after the Company becomes aware of the
necessity therefor. The Company shall use its reasonable best efforts to cause
such amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any
time the number of shares of Common Stock available for resale under the
Registration Statement is less than the number of Registrable Securities. The
calculation set forth in the foregoing sentence shall be made without regard to
any limitations on the exercise of the Warrants and such calculation shall
assume that the Warrants are then exercisable into shares of Common Stock.

(f) Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) a Registration Statement covering all the
Registrable Securities required to be covered thereby and required to be filed
by the Company pursuant to this Agreement is (A) not filed with the SEC on or
before the 30th day after the Filing Deadline (a “Filing Failure”), or (B) filed
with the SEC but not declared effective by the SEC on or before the 30th day
after the Effectiveness Deadline (an “Effectiveness Failure”) or (ii) on any day
after the Effective Date sales of all of the Registrable Securities required to
be included on such Registration Statement cannot be made (other than during an
Allowable Grace Period (as defined in Section 3(q)) pursuant to such
Registration Statement (including, without limitation, because of a failure to
keep such Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to such Registration Statement, a
suspension or delisting of the Common Stock on its principal trading market or
exchange, or to register a sufficient number of shares of Common Stock) (a
“Maintenance Failure”), then, as partial relief for the damages to any holder by
reason of any such delay in or reduction of its ability to sell the underlying
shares of Common Stock (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall become liable for
payment to each holder of Registrable Securities relating to such Registration
Statement an amount in cash equal to two percent (2%) of the aggregate Purchase
Price (as such term is defined in the Securities Purchase Agreement) of such
Investor’s Registrable Securities included in such Registration Statement on
each of the following dates: (i) the day thirty (30) days after a Filing Failure
and on every thirtieth day (pro rated for periods totaling less than thirty
(30) days) thereafter until such Filing Failure is cured or until the date two
(2) years after the Closing Date; (ii) the day of an Effectiveness Failure and
on every thirtieth day (pro rated for periods totaling less than thirty
(30) days) thereafter until such Effectiveness Failure is cured or until the
date two (2) years after the Closing Date; and (iii) the initial day of a
Maintenance Failure and on every thirtieth day (pro

 

4

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

rated for periods totaling less than thirty (30) days) thereafter until such
Maintenance Failure is cured or until the date two (2) years after the Closing
Date. The payments to which a holder shall be entitled pursuant to this
Section 2(f) are referred to herein as “Registration Delay Payments.”
Registration Delay Payments shall be paid on the earlier of (I) the last day of
the calendar month during which such Registration Delay Payments are incurred
and (II) the third Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make
Registration Delay Payments in a timely manner, such Registration Delay Payments
shall bear interest at the rate of one and one-half percent (1.5%) per month
(prorated for partial months) until paid in full.

3. Related Obligations.

In connection with its obligations pursuant to Section 2, the Company shall have
the following obligations:

(a) The Company shall submit to the SEC, within three (3) Business Days after
the Company learns that no review of a particular Registration Statement will be
made by the staff of the SEC or that the staff of the SEC has no further
comments on a particular Registration Statement, as the case may be, a request
for acceleration of effectiveness of such Registration Statement to a time and
date not later than two (2) Trading Days after the submission of such request.
The Company shall keep each Registration Statement effective pursuant to Rule
415 at all times until the earlier of (i) the date as of which all of the
Investors may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144(k) (or successor
thereto) promulgated under the 1933 Act, (ii) the date twenty-four (24) months
after the Closing Date or (iii) the date on which the Investors shall have sold
all of the Registrable Securities covered by such Registration Statement (the
“Registration Period”). The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.

(b) The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period (except pursuant to Sections 3(f) and 3(q)), and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form
10-Q or Form 8-K or any analogous report under the Securities Exchange Act of
1934, as amended (the “1934 Act”), the Company shall have incorporated such
report by reference into such Registration Statement, if applicable, or shall
file such amendments

 

5

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

or supplements with the SEC as expeditiously as practicable on or following the
date on which the 1934 Act report is filed which created the requirement for the
Company to amend or supplement such Registration Statement.

(c) The Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least five (5) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K and any similar or successor reports) within a
reasonable number of days prior to their filing with the SEC, and (B) not file
any Registration Statement or amendment or supplement thereto in a form to which
Legal Counsel reasonably objects; provided, that, the failure of any Investor or
his, her or its counsel to respond to such proposed documents within five
(5) Business Days after receipt thereof shall be deemed approval of same. The
Company shall not submit a request for acceleration of the effectiveness of a
Registration Statement or any amendment or supplement thereto without the prior
approval of Legal Counsel, which consent shall not be unreasonably withheld. The
Company shall furnish to Legal Counsel, without charge, (i) copies of any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement (redacted to eliminate
material non-public information, if any, in such correspondence) The Company
shall reasonably cooperate with Legal Counsel in performing the Company’s
obligations pursuant to this Section 3.

(d) The Company shall furnish to Legal Counsel and each Investor whose
Registrable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, if
requested by an Investor and not otherwise available on the EDGAR system, at
least one copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference, all exhibits and each preliminary prospectus (redacted to
eliminate material non-public information, if any, in any such exhibit or other
document) and (ii) upon the effectiveness of any Registration Statement, ten
(10) copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request).

(e) The Company shall use its reasonable best efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by Investors of the Registrable Securities covered by a Registration
Statement under such other securities or “blue sky” laws of all applicable
jurisdictions in the United States, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction, (y) subject itself to general taxation in any
jurisdiction, or (z) file a general consent to service of process in any
jurisdiction in which it is not now so qualified or subject to general taxation
or has not currently so consented. The Company shall promptly notify Legal
Counsel and each Investor who holds Registrable Securities of the receipt by the

 

6

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

Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the
securities or “blue sky” laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threatening of any proceeding for
such purpose.

(f) The Company shall notify Legal Counsel and each Investor in writing (each
such notice to Legal Counsel and the Investors, a “Suspension Notice”) of the
happening of any of the following events, as promptly as practicable after
becoming aware of such event: (i) any request by the SEC or any other federal or
state governmental authority during the period of effectiveness of the
Registration Statement for amendments or supplements to a Registration Statement
or related prospectus or for additional information; (ii) the issuance by the
SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose; (iii) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; or (iv) any event or circumstance which necessitates the making of any
changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not include any untrue statement of
a material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the prospectus, it will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), and, subject to Section 3(q), promptly prepare a
supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver a copy of such supplement or amendment to
Legal Counsel and each Investor (or such other number of copies as Legal Counsel
or such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel and each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and each
Investor by facsimile on the same day of such effectiveness and by overnight
mail) and (ii) of the Company’s reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.

(g) The Company shall use its reasonable best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of the Registration
Statement (other than during an Allowable Grace Period), or the suspension of
the qualification of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension as soon as reasonably practicable
consistent with the provisions of Section 3(f) and to notify Legal Counsel and
each Investor who holds Registrable Securities being sold of the issuance of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.

(h) If any Investor is required under applicable securities law to be described
in the Registration Statement as an underwriter, at the reasonable request of
such Investor, the Company shall furnish to such Investor, on the date of the
effectiveness of the

 

7

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

Registration Statement and thereafter from time to time on such dates as an
Investor may reasonably request (i) a letter, dated such date, from the
Company’s independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the Investors, and (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the Investors.

(i) Uon the written request of any Investor in connection with any Investor’s
due diligence requirements, if any, the Company shall make available for
inspection by (i) any Investor, (ii) Legal Counsel and (iii) one firm of
accountants or other agents retained by the Investors (collectively, the
“Inspectors”), all pertinent financial, corporate and other records
(collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector to fulfill a due diligence obligation by an Investor, and cause the
Company’s chief executive officer, chief financial officer and executive vice
president and secretary to be reasonably available to the Inspectors for
questions regarding the Records and to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall
agree in writing to hold in strict confidence and shall not make any disclosure
(except to an Investor) or use of any Record or other information which the
Company determines in good faith to be confidential, and of which determination
the Inspectors are so notified, unless (a) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order from a court or
government body of competent jurisdiction, or (b) the information in such
Records has been made generally available to the public other than by disclosure
in violation of this or any other Transaction Document. Nothing herein (or in
any other confidentiality agreement between the Company and any Investor) shall
be deemed to limit the Investors’ ability to sell Registrable Securities in a
manner which is otherwise consistent with this Agreement and the other
Transaction Documents, applicable laws and regulations.

(j) The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

(k) The Company shall use its reasonable best efforts either to (i) cause all
the Registrable Securities covered by the Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all of the Registrable Securities covered by the
Registration Statement on The Nasdaq Capital Market or the American Stock
Exchange. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).

 

8

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

(l) The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable pursuant to the
Transaction Documents, facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
Investors may reasonably request and registered in such names as the Investors
may request.

(m) If requested by an Investor and if the Company’s counsel deems such
inclusion not inconsistent with the 1933 Act or the 1934 Act or other applicable
law, the Company shall (i) as soon as practicable incorporate in a prospectus
supplement or post-effective amendment such information as an Investor
reasonably requests to be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being offered or sold, the
purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) as soon as practicable
make all required filings of such prospectus supplement or post-effective
amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) as soon as
practicable, supplement or make amendments to any Registration Statement if
reasonably requested by an Investor holding any Registrable Securities.

(n) The Company shall make generally available to its security holders as soon
as practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the effective date of a Registration Statement.

(o) The Company shall otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder.

(p) Within two (2) Business Days after the Registration Statement which covers
Registrable Securities is declared effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

(q) Notwithstanding anything to the contrary herein, at any time after the
Effective Date, upon any event or circumstance which necessitates the making of
any changes in the Registration Statement or prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not include any untrue statement of
a material fact or omission to state a material fact required to be

 

9

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

stated therein or necessary to make the statements therein not misleading, and
that in the case of the prospectus, it will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, the suspension pursuant to the Company’s Suspension Notice
will not trigger any payment or liability for payment by the Company of any
Registration Delay Payments otherwise payable or owing by the Company pursuant
to Section 2(f) of this Agreement (a “Grace Period”); provided, that the Company
shall promptly (i) notify the Investors in writing of the existence of a Grace
Period in conformity with the provisions of this Section 3(q)(provided that in
each notice the Company will not disclose the content of such material,
non-public information to the Investors) and the date on which the Grace Period
will begin, and (ii) as soon as such date may be determined, promptly notify the
Investors in writing of the date on which the Grace Period ends; and, provided
further, that no Grace Period shall exceed twenty (20) consecutive days and
during any three hundred sixty five (365) day period such Grace Periods shall
not exceed an aggregate of sixty (60) days and the first day of any Grace Period
must be at least five (5) trading days after the last day of any prior Grace
Period (each, an “Allowable Grace Period”). For purposes of determining the
length of a Grace Period above, the Grace Period shall begin on and include the
date the Investors receive the notice referred to in clause (i) and shall end on
and include the later of the date the Investors receive the notice referred to
in clause (ii) and the date referred to in such notice. For the avoidance of
doubt, no Maintenance Failure shall occur during an Allowable Grace Period. The
provisions of Section 3(g) hereof shall not be applicable during the period of
any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material, non-public information is
no longer applicable. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with any sale of Registrable Securities with
respect to which an Investor has entered into a contract for sale, and delivered
a copy of the prospectus included as part of the applicable Registration
Statement, in each case prior to the Investor’s receipt of the Suspension Notice
related to the Grace Period and for which the Investor has not yet settled.

4. Obligations and Covenants Of The Investors.

(a) The Investor has completed or caused to be completed the Registration
Statement Questionnaire (the “Registration Statement Questionnaire”) attached
hereto as Annex II, for use in preparation of the Registration Statement, and
the answers thereto are true and correct as of the date hereof and, as may be
updated by an Investor in writing, will be true and correct as of the effective
date of the Registration Statement. At least five (5) Business Days prior to the
first anticipated filing date of the Registration Statement, the Company shall
notify each Investor in writing of any additional information the Company
requires from each such Investor. It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect and maintain the effectiveness of the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.

 

10

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

(b) Each Investor, by such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

(c) Each Investor agrees that, upon receipt of any Suspension Notice from the
Company, such Investor will immediately discontinue disposition of Registrable
Securities pursuant to any Registration Statement covering such Registrable
Securities until such Investor’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(f) or receipt of notice from the
Company in writing that no supplement or amendment is required. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Securities Purchase Agreement in connection with any sale
of Registrable Securities under all of the circumstances described in the last
sentence of Section 3(q).

(d) Each Investor acknowledges that there may occasionally be times when the
Company must suspend the use of the Prospectus forming a part of the
Registration Statement, and each Investor covenants and agrees that it will not
make any sale of Registrable Securities under the Registration Statement without
complying with the provisions of this Agreement (including but not limited to
the prohibition on sales after the Effective Date beginning with delivery of a
Suspension Notice to such Investor and ending at the time the Company gives such
Investor written notice that such Investor may thereafter effect sales pursuant
to said prospectus or an amended or supplemented prospectus forming part of a
Registration Statement) and each Investor covenants and agrees that it will
comply with any applicable prospectus delivery requirements of the 1933 Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement. Upon receipt of a Suspension Notice, each Investor
will refrain from selling any Registrable Securities pursuant to a Registration
Statement until the Investor’s receipt of copies of a supplemented or amended
prospectus prepared and filed by the Company, or until it is advised in writing
by the Company that the current prospectus may be used.

(e) Upon a request by the Company, each Investor will, as soon as practicable,
but in no event later than two (2) Business Days after such request, notify the
Company whether such Investor continues to hold Registrable Securities.

5. Expenses of Registration.

All reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company shall be paid by the Company. The Company shall also
reimburse the Investors for the fees and disbursements of Legal Counsel in
connection with registration, filing or qualification pursuant to Sections 2 and
3 of this Agreement which amount shall be limited to $7,500.

 

11

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

6. Indemnification.

In the event any Registrable Securities are included in the Registration
Statement (provided that for the purpose of this Section 6, the term
“Registration Statement” shall include any preliminary prospectus, final
prospectus, exhibit, supplement or amendment included in or relating to, and any
document incorporated by reference in, the Registration Statement as such term
is defined in Section 1) under this Agreement:

(a) The Company agrees to indemnify, hold harmless and defend each Investor, the
directors, officers, partners, members, employees, agents, representatives of,
and each Person, if any, who controls any Investor within the meaning of the
1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys’ fees, amounts paid in settlement (if such settlement is
effected with the written consent of the party from whom indemnification is
sought, which consent shall not be unreasonably withheld or delayed) or
expenses, joint or several (collectively, “Claims”), incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC,
whether pending or threatened, (“Indemnified Damages”), to which any of them may
become subject insofar as such Claims or Indemnified Damages arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a material
fact in the Registration Statement or any post-effective amendment thereto or in
any filing made in connection with the qualification of the offering under the
securities or other “blue sky” laws of any jurisdiction in which Registrable
Securities are offered (“Blue Sky Filing”), or the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in the light of the circumstances under which the statements therein
were made, not misleading, (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement or (iv) any material violation of this Agreement (the
matters in the foregoing clauses (i) through (iv) being, collectively,
“Violations”). Subject to Section 6(c), the Company shall reimburse the
Indemnified Persons, promptly as such expenses are reasonably incurred and are
due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim or
Indemnified Damages sought by an Indemnified Person arising out of or based upon
a Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person for such
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto; and
(ii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.

 

12

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

(b) In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend the Company, each of its directors, each of its
officers who signs the Registration Statement and each Person, if any, who
controls the Company within the meaning of the 1933 Act (each, an “Indemnified
Party”) to the same extent and in the same manner as is set forth in
Section 6(a) with respect to the Indemnified Persons, against any Claim or
Indemnified Damages to which any of them may become subject insofar as such
Claim or Indemnified Damages arise out of or are based upon: any Violation, to
the extent, and only to the extent, that such Violation occurs in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Investor expressly for use in connection with such Registration
Statement, including but not limited to the Registration Statement Questionnaire
attached hereto as Annex II; or (ii) the use by such Investor of an outdated or
defective prospectus after the Company has notified such Investor in writing
that the prospectus is outdated or defective; and, subject to Section 6(c), such
Investor will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim or Indemnified Damages if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld or delayed; provided, further,
however, that an Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement giving rise to such indemnification obligation. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented.

(c) Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of the written threat of or notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim or Indemnified Damages, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, promptly deliver to the indemnifying party a written
notice of the written threat of or notice of the commencement of such action. In
case any such action is brought against any Indemnified Party or Indemnified
Person and such Indemnified Party or Indemnified Person seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the indemnifying
party and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that if the defendants in any such action include both the
Indemnified Party

 

13

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

or Indemnified Person, on the one hand, and the indemnifying party, on the other
hand, and the Indemnified Party or Indemnified Person shall have reasonably
concluded, based on an opinion of counsel reasonably satisfactory to the
indemnifying party, that the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such
proceeding and/or that there may be legal defenses available to it and/or any
other Indemnified Party or Indemnified Person which are different from or
additional to those available to the indemnifying party; provided further, that
the indemnifying party shall not be responsible for the reasonable fees and
expenses of more than one (1) separate legal counsel for all such Indemnified
Persons or Indemnified Parties. In the case of an Indemnified Person, legal
counsel referred to in the immediately preceding sentence shall be selected by
the Investors holding at least a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim or
Indemnified Damages relate. The Indemnified Party or Indemnified Person shall
reasonably cooperate with the indemnifying party in connection with any
negotiation or defense of any such action or Claim or Indemnified Damages by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim or Indemnified Damages. The indemnifying party
shall keep the Indemnified Party or Indemnified Person reasonably apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim, investigation, inquiry or proceeding effected without its prior
written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim, Indemnified Damages or
litigation, and such settlement shall not include any admission as to fault on
the part of the Indemnified Party. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
materially prejudiced in its ability to defend such action as a result of such
failure.

(d) No Person involved in the sale of Registrable Securities who is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such sale shall be entitled to
indemnification from any Person who is not guilty of such fraudulent
misrepresentation.

(e) The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

 

14

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

(f) The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law. Notwithstanding the
foregoing, in the event that any of the provisions of Section 9(k) of the
Securities Purchase Agreement and this Section 6 may be deemed to both be
applicable to any of the same losses, claims, damages, liabilities, judgments,
fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in
settlement or expenses incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, the
provisions of this Section 6 shall control and such provisions of the
Section 9(k) of the Securities Purchase Agreement shall be inoperative.

7. Contribution.

To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to, in lieu of indemnifying such
Indemnified Person or Indemnified Party, as applicable, make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable
Securities which Person is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation; and (iii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.

8. Reports Under The 1934 Act.

With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration (“Rule 144”), at all times during which there
are Registrable Securities outstanding which have not been previously (a) sold
to or through a broker or dealer or underwriter in a public distribution, or
(b) sold in a transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act under Section 4(l) thereof, in the case of either
clause (a) or clause (b) in such a manner that, upon the consummation of such
sale, all transfer restrictions and restrictive legends with respect to such
shares are removed upon the consummation of such sale, the Company agrees to use
reasonable efforts to:

(a) make and keep public information available, as contemplated by Rule 144(c)
of the 1933 Act;

(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long as the
Company remains subject to such requirements and the filing of such reports and
other documents is required for the applicable provisions of Rule 144; and

 

15

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

(c) furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144(c), the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.

9. Assignment of Registration Rights.

The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of such Investor’s Registrable
Securities if: (i) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act or applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein and in each of the
other Transaction Documents; and (v) such transfer shall have been to a
Permitted Transferee and permitted and made in accordance with the applicable
requirements of the Securities Purchase Agreement, including but not limited to
those in Section 9(g) thereof.

10. Amendment of Registration Rights.

Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

11. Miscellaneous.

(a) A Person is deemed to be a holder of Registrable Securities whenever such
Person owns or is deemed to own of record such Registrable Securities. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company shall act
upon the basis of instructions, notice or election received from the such record
owner of such Registrable Securities.

 

16

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

(b) Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

If to the Company:

Unigene Laboratories, Inc.

110 Little Falls Road

Fairfield, New Jersey 07004

Telephone: (973) 882-0860

Facsimile:

Attention:

with a copy (for informational purposes only) to:

Dechert LLP

Princeton Pike Corporate Center

P.O.Box 5218

Princeton, NJ 08543-5218

Telephone: (609)620-3200

Facsimile: (609) 620-3259

Attention: James J. Marino, Esq.

If to Legal Counsel:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone: (212) 756-2000

Facsimile: (212) 593-5955

Attention: Eleazer Klein, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer’s representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

 

17

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

(c) Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

(d) All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

(e) This Agreement, the other Transaction Documents (as defined in the
Securities Purchase Agreement) and the instruments referenced herein and therein
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

(f) Subject to the requirements of Section 9, this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of
the parties hereto.

(g) The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

 

18

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

(h) This Agreement may be executed in identical counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.

(i) Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

(j) All consents and other determinations required to be made by the Investors
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Required Holders.

(k) The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent and no rules of strict
construction will be applied against any party.

(l) This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

(m) The obligations of each Investor hereunder are several and not joint with
the obligations of any other Investor, and no provision of this Agreement is
intended to confer any obligations on any Investor vis-à-vis any other Investor.
Nothing contained herein, and no action taken by any Investor pursuant hereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated herein.

* * * * * *

 

19

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

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

COMPANY: UNIGENE LABORATORIES, INC.

By:

 

/s/ Warren P. Levy

Name:

  Warren P. Levy

Title:

  President and Chief Executive Officer

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

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

BUYERS: MAGNETAR CAPITAL MASTER FUND, LTD.

By: Magnetar Financial LLC,

Its Financial Manager

By:

 

/s/ Paul Smith

Name:

  Paul Smith

Title:

  General Counsel

[Signature Page to Registration Rights Agreement]

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

SCHEDULE OF BUYERS

 

Buyer

 

Buyer Address

and Facsimile Number

 

Buyer’s Representative’s Address

and Facsimile Number

Magnetar Capital Master Fund, Ltd.

 

1603 Orrington Avenue

Evanston, IL 60201

Attn: Richard Levy and Matthew Ray

Facsimile: (847) 905-5603

Telephone: (847) 905-4707

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Eleazer Klein, Esq.

Facsimile: (212) 593-5955

Telephone: (212) 756-2000

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

EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

Registrar & Transfer Co.

10 Commerce Drive

Cranford, NJ 07016

Attention: Michael Lasichak

Re:    Unigene Laboratories, Inc.

Ladies and Gentlemen:

[We are][I am] counsel to Unigene Laboratories, Inc., a Delaware corporation
(the “Company”), and have represented the Company in connection with that
certain Securities Purchase Agreement, dated as of March 16, 2006 (the
“Securities Purchase Agreement”), entered into by and among the Company and the
buyers named therein (collectively, the “Holders”) pursuant to which the Company
issued to the Holders its shares of the Company’s Common Stock, par value $0.01
per share (the “Common Stock”) and warrants exercisable for shares of Common
Stock (the “Warrants”). Pursuant to the Securities Purchase Agreement, the
Company also has entered into a Registration Rights Agreement with the Holders
(the “Registration Rights Agreement”) pursuant to which the Company agreed,
among other things, to register the resale of the Registrable Securities (as
defined in the Registration Rights Agreement), including the shares of Common
Stock issuable upon exercise of the Warrants under the Securities Act of 1933,
as amended (the “1933 Act”). In connection with the Company’s obligations under
the Registration Rights Agreement, on                          , 2006, the
Company filed a Registration Statement on Form S-1 (File No. 333-            )
(the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names each of the Holders as
a selling stockholder thereunder.

In connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.

This letter shall serve as our standing advice to you that you may issue or
reissue shares of Common Stock without legend to the Holders as contemplated by
the Company’s Irrevocable Transfer Agent Instructions dated March [    ], 2006
(the “Transfer Agent Instructions”) and you need not require further letters
from us to effect any future legend-free issuance or reissuance of shares of
Common Stock to the Holders as contemplated by the Transfer Agent Instructions.

 

Very truly yours,

[ISSUER’S COUNSEL]

By:

 

 

CC:    [LIST NAMES OF HOLDERS]

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

ANNEX I

SELLING STOCKHOLDERS

The shares of common stock being offered by the selling stockholders are those
previously issued to the Selling Stockholders and those issuable to the Selling
Stockholders upon exercise of the warrants. For additional information regarding
the issuances of common stock and the warrants, see “Private Placement of Common
Shares and Warrants” above. We are registering the shares of common stock in
order to permit the selling stockholders to offer the shares for resale from
time to time. Except for the ownership of the shares of common stock and the
warrants, the selling stockholders have not had any material relationship with
us within the past three years.

The table below lists the selling stockholders and other information regarding
the beneficial ownership of the shares of common stock by each of the selling
stockholders. The second column lists the number of shares of common stock
beneficially owned by each selling stockholder, based on its ownership of the
shares of common stock and the warrants, as of                     , 2006,
assuming exercise of the warrants held by the selling stockholders on that date,
without regard to any limitations on exercise.

The third column lists the shares of common stock being offered by this
prospectus by the selling stockholders.

In accordance with the terms of registration rights agreement with the holders
of the shares of common stock and the warrants, this prospectus generally covers
the resale of that number of shares of common stock equal to the number of
shares of common stock issued and the shares of common stock issuable upon
exercise of the related warrants, determined as if the outstanding warrants were
exercised, as applicable, in full, in each case, as of the trading day
immediately preceding the date this registration statement was initially filed
with the SEC. The fourth column assumes the sale of all of the shares offered by
the selling stockholders pursuant to this prospectus.

Under the terms of the warrants, a selling stockholder may not exercise the
warrants, to the extent such exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 4.99% of our then outstanding shares of common stock
following such exercise, excluding for purposes of such determination shares of
common stock issuable upon exercise of the warrants which have not been
exercised. The number of shares in the second column does not reflect this
limitation. The selling stockholders may sell all, some or none of their shares
in this offering. See “Plan of Distribution.”

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

Name of Selling Stockholder

  

Number of Shares of

Common Stock Owned

Prior to Offering

  

Maximum Number of Shares

of Common Stock to be Sold

Pursuant to this Prospectus

  

Number of Shares of

Common Stock Owned

After Offering

Magnetar Capital Master Fund, Ltd. (1)          0

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

(1) Magnetar Financial LLC is the investment advisor of Magnetar Capital Master
Fund, Ltd. (“Magnetar Master Fund”) and consequently has voting control and
investment discretion over securities held by Magnetar Master Fund. Magnetar
Financial LLC disclaims beneficial ownership of the securities held by Magnetar
Master Fund. Alec Litowitz is the manager of Magnetar Capital Partners LLC,
which is the sole member of Magnetar Financial LLC. As a result, Mr. Litowitz
may be considered the beneficial owner of any shares deemed to be beneficially
owned by Magnetar Financial LLC. Mr. Litowitz disclaims beneficial ownership of
these shares.

 

Annex I-2

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

PLAN OF DISTRIBUTION

We are registering the shares of common stock previously issued and the shares
of common stock issuable upon exercise of the warrants to permit the resale of
these shares of common stock by the holders of the common stock and warrants
from time to time after the date of this prospectus. We will not receive any of
the proceeds from the sale by the selling stockholders of the shares of common
stock. We will bear all fees and expenses incident to our obligation to register
the shares of common stock.

The selling stockholders may sell all or a portion of the shares of common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent’s commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,

 

  •   on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;

 

  •   in the over-the-counter market;

 

  •   in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

 

  •   through the writing of options, whether such options are listed on an
options exchange or otherwise;

 

  •   ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

 

  •   block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

  •   purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

 

  •   an exchange distribution in accordance with the rules of the applicable
exchange;

 

  •   privately negotiated transactions;

 

  •   short sales;

 

  •   sales pursuant to Rule 144;

 

  •   broker-dealers may agree with the selling securityholders to sell a
specified number of such shares at a stipulated price per share;

 

Annex I-3

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

  •   a combination of any such methods of sale; and

 

  •   any other method permitted pursuant to applicable law.

If the selling stockholders effect such transactions by selling shares of common
stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the shares of common stock or otherwise, the selling stockholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of common stock short and
deliver shares of common stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. The
selling stockholders may also loan or pledge shares of common stock to
broker-dealers in connection with bona fide margin accounts secured by the
shares of common stock, which shares broker-dealers could in turn sell such
shares if the selling stockholders default in the performance of their secured
obligations.

The selling stockholders may pledge or grant a security interest in some or all
of the warrants or shares of common stock owned by them and, if they default in
the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer and donate the shares of common stock
in other circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.

The selling stockholders and any broker-dealer participating in the distribution
of the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular
offering of the shares of common stock is made, a prospectus supplement, if
required, will be distributed which will set forth the aggregate amount of
shares of common stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the selling stockholders and any
discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.

 

Annex I-4

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

There can be no assurance that any selling stockholder will sell any or all of
the shares of common stock registered pursuant to the shelf registration
statement, of which this prospectus forms a part.

The selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, that the selling
stockholders will pay all underwriting discounts and selling commissions, if
any. We will indemnify the selling stockholders against liabilities, including
some liabilities under the Securities Act, in accordance with the registration
rights agreements, or the selling stockholders will be entitled to contribution.
We may be indemnified by the selling stockholders against civil liabilities,
including liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling stockholder specifically for use in
this prospectus, in accordance with the related registration rights agreements,
or we may be entitled to contribution.

Once sold under the shelf registration statement, of which this prospectus forms
a part, the shares of common stock will be freely tradable in the hands of
persons other than our affiliates.

 

Annex I-5