Exhibit 10.2



                             ARTICLES OF ASSOCIATION

                                       of

                     "SHIJIAZHUANG - UNIGENE PHARMACEUTICAL
                              CORPORATION LIMITED"





                                  June 15, 2000




<PAGE>


                                TABLE OF CONTENTS



Chapter I GENERAL PROVISIONS.............................................3
Chapter II PURPOSE AND SCOPE OF OPERATION................................3
Chapter III TOTAL INVESTMENT AND REGISTERED CAPITAL......................4
Chapter IV BOARD OF DIRECTORS............................................5
Chapter V MANAGEMENT ORGANIZATION........................................7
Chapter VI CONFIDENTIALITY...............................................9
Chapter VII FINANCE AND ACCOUNTING.......................................9
Chapter VIII PROFITS AND LOSSES.........................................10
Chapter IX STAFF AND WORKERS............................................11
Chapter X TRADE UNION...................................................11
Chapter XI TERM, TERMINATION AND LIQUIDATION............................12
Chapter XII RULES AND REGULATIONS.......................................13
Chapter XIII APPENDICES.................................................13
    Exhibit A............................................................i
    Exhibit B...........................................................ii


<PAGE>

                          Chapter I  GENERAL PROVISIONS

Article 1. Pursuant to the Law of the People's  Republic of China (the "PRC") on
Joint Ventures Using Chinese and Foreign  Investment and other relevant  Chinese
laws and regulations  and the Joint Venture  Contract (the  "Contract")  between
Shijiazhuang   Pharmaceutical  Group  Company,  Ltd.  ("Party  A")  and  Unigene
Laboratories,  Inc.  ("Party B") (each of Party A and Party B, a "JV Party") for
the establishment of "Shijiazhuang - Unigene Pharmaceutical Corporation Limited"
(the "JV") signed on the 15th day of June,  2000,  these Articles of Association
for the JV are hereby adopted by Party A and Party B.

Article 2. The name of the JV in Chinese is:




and the name of the JV in English is:

          "Shijiazhuang - Unigene Pharmaceutical Corporation Limited".

Article 3. The JV's  address:  High and New  Technology  Industrial  Development
Zone, Shijiazhuang, Hebei Province.

Article 4. Parties to the JV:

Party A: Shijiazhuang Pharmaceutical Group Company, Ltd.
Legal Address: 276 Zhongshan West Road Shijiazhuang, Hebei Province, PRC
Legal Representative: Mr. Cai Dong Chen, Chairman and President
Telephone: 0086-311-7039508
Fax: 0086-311-7039608

Party B: Unigene Laboratories, Inc.
Legal Address: 110 Little Falls Road, Fairfield, New Jersey, 07004, USA
Legal Representative: Dr. Warren P. Levy, President
Telephone: 001-973-882-0860
Fax: 001-973-227-6088

Article 5. The JV takes the form of a Limited Liability Company.

Article  6. The JV is a legal  person  of the PRC  under  the  jurisdiction  and
protection of the laws of the PRC. All the activities of the JV shall conform to
the pertinent laws, decrees, rules and regulations of the PRC.

                  Chapter II  PURPOSE AND SCOPE OF OPERATION

Article 7. The purpose of the JV is to use advanced  technology  and  scientific
operational   management   expertise   to   carry   out   the   manufacture   of
pharmaceutical-grade recombinant salmon

                                       3
<PAGE>

*omitted and filed  separately  with the United States  Securities  and Exchange
Commission pursuant to a request for confidential treatment.

calcitonin  (the  "Calcitonin")  in injectable and nasal  formulations  (the "JV
Products")  using the  processes of Party B that include the use of an amidating
enzyme that the JV will  purchase  from Party B (the "AE") and the  distribution
and sale of JV  Products  in the PRC and such  other  regions  as decided by the
Board of Directors of the JV (the "Territory") in order to obtain a satisfactory
return on investment for all parties.

Article 8. The business scope of the JV is (a) to construct, equip, own, manage,
and  operate  a  manufacturing  facility  in the PRC  that has the  capacity  to
manufacture  Calcitonin  in  accordance  with the  terms and  conditions  of the
Contract (the "JV Facility") and prepare, fill, label and package injectable and
nasal  formulations  thereof;  and (b) to  market,  distribute  and  sell the JV
Products in the Territory.

Article 9. Scale of Production:

1. Upon completion of the JV Facility, the JV intends its scale of production to
be an annual  output of * of bulk  Calcitonin  and JV Products in the  following
quantities:

     o    *

     o    *

     o    *

2. Proper adjustment will be made to the intended scale of production to reflect
the development of operations and market changes.

            Chapter III   TOTAL INVESTMENT AND REGISTERED CAPITAL

Article 10. The total investment of the JV is *

Article 11. The registered capital of the JV is * The contributions from Party A
and Party B are as follows:

Party A shall  contribute the Renminbi  equivalent of *, in cash, to the capital
of the JV, for an equity share of 55%.

Party B shall contribute cash and technology valued, in the aggregate,  at * for
an equity share of 45%.

Article 12. Both parties shall make their  respective  contributions at the time
and in the manner described in the Contract. After capital contribution has been
effected by a party,  the amount of such  contribution  shall be recorded in the
JV's accounts and a certificate of capital  contribution shall be issued to such
party by the JV (a "Certificate of Capital Contribution").

                                       4
<PAGE>

*omitted and filed  separately  with the United States  Securities  and Exchange
Commission pursuant to a request for confidential treatment.

The Certificate of Capital  Contribution  will include the following  items: the
name of the JV, the establishment date of the JV, the names of the joint venture
parties and their  respective  contributions to date, the date of the applicable
contribution,   and  the  date  of  issuance  of  the   Certificate  of  Capital
Contribution.

Article 13. Neither Party may sell, assign,  transfer,  convey, pledge, encumber
or  liquidate,  in whole or in part,  its rights under the  Contract,  except as
provided for in Chapter XIII of the Contract.

Article  14.  Any  change  in the  registered  capital  shall  be  made  only in
accordance with the Contract.

                      Chapter IV   BOARD OF DIRECTORS

Article  15.  The  Board of  Directors  of the JV shall be the  highest  body of
authority of the JV.

Article  16. The Board of  Directors  of the JV shall  decide  all major  issues
concerning the JV. Without  limiting the generality of the foregoing,  the major
authorities  and  responsibilities  of the Board of Directors  shall include the
following:

     1.   Approving on an annual basis the operating plan;

     2.   Investigating and approving any expenditures by the JV in excess of *;

     3.   Investigating  and  approving  the  obtainment  by the JV of all third
          party financing;

     4.   Selecting and approving any foreign country market regions for sale of
          the JV Products and  determining the ratio of export sales to domestic
          sales;

     5.   Examining and approving the fiscal  budget,  financial  statements and
          balance sheets of the JV;

     6.   Approving any change to the profit allocation  procedures set forth in
          Article  58 of  the JV  Contract,  approving  any  failure  to  make a
          distribution  of profits  otherwise  required  by Article 58 of the JV
          Contract,  and  determining and approving the loss offset plan for the
          JV;

     7.   Approving any change in the registered capital for the JV;

     8.   Approving the transfer of the registered  capital of the JV to a third
          party;

     9.   Approving   any   merger,   separation,   acquisition,    dissolution,
          liquidation or alteration of the JV;

     10.  Amending the Articles of Association;

                                       5
<PAGE>

     11.  Formulating and approving the major rules and regulations of the JV;

     12.  Formulating the management structure of the JV;

     13.  Determining the terms of employment,  termination and treatment of the
          general  manager,  deputy  general  manager,  chief  engineer,   chief
          accountant and chief auditor of the JV;

     14.  Approving the marketing and/or development of products by the JV other
          than the JV  Products,  including  without  limitation  the use of the
          Marks (as defined in the JV Contract) in advertising  and  promotional
          materials;

     15.  Approving the banks at which to open accounts for the JV;

     16.  Approving insurance carriers to provide insurance coverage to the JV;

     17.  Approving the accounting  firm to provide  accounting  services to the
          JV;

     18.  Approving  the  transfer,  sale or  licensing  to a third party of any
          improvements in technology that belong to the JV or contractually  may
          be transferred, sold or licensed by the JV;

     19.  Determining allocations to the Three Funds (as defined below); and

     20.  Other issues of importance so deemed by the Board of Directors.

Article 17. The Board of  Directors  shall be  composed  of five (5)  directors.
Three (3) directors  will be selected by Party A and two (2)  directors  will be
selected by Party B. Each  director  shall be  appointed  for a term of four (4)
years,  subject to  renewal,  but may be replaced at any time during his term by
the party that appointed him, upon prior written notice to the other party.

Article 18. The Board of  Directors  of the JV shall have one (1)  director  who
shall serve as Chairman and one (1)  director who shall serve as  Vice-Chairman.
The  Chairman  shall be  appointed  by Party A, and the  Vice-Chairman  shall be
appointed  by Party B. The  Chairman  of the  Board of  Directors  is the  legal
representative   of  the  JV.  When  the  Chairman  is  unable  to  perform  his
responsibilities, the Vice-Chairman shall be authorized to represent the JV.

Article  19. A Board of  Directors'  meeting is to be  convened  at least once a
year. Four (4) directors present in person or by proxy shall constitute a quorum
for the transaction of business.  No business shall be transacted in the absence
of a quorum. The Chairman of the Board shall convene interim Board meetings upon
proposal by two or more directors.

Article 20. Board  meetings  shall be called and presided  over by the Chairman.
The Vice-Chairman will call and preside over the board meeting in the absence of
the Chairman.  Each director  (chairman and deputy chairman included) shall only
have one vote.

                                       6
<PAGE>

Article  21.   Written   notice  shall  be  provided  by  the  Chairman  or  the
Vice-Chairman,  as appropriate,  to all Directors  forty-five (45) days prior to
the date of each Board  meeting,  which notice shall state the time and place of
the meeting and the topics for discussion at such meeting. No topic that has not
been  included  in such  notice  shall be acted  upon at a meeting  without  the
unanimous  consent of all  Directors.  Board  meetings may be conducted with the
assistance of modern communication facilities, including, without limitation, by
means of telephone conference or similar  communications  equipment by which all
persons  participating  in the meeting can hear, and make himself heard,  to the
other participants, or in such other manner as unanimously agreed by the Board.

Article 22. When a director is unable to attend a Board of Directors meeting, he
may issue a proxy in writing  entrusting another to represent him in attendance.
Without  being  present  or  issuing a duly  appointed  proxy for a  meeting,  a
director will be regarded as absent from the meeting.

Article 23. All Board  meetings  shall be conducted both in Chinese and English.
All topics for Board meeting  discussion and all minutes and  resolutions by the
Board shall be written in both  English and Chinese  which  versions  shall each
have equal force. Minutes of all decisions or other actions taken at any meeting
of the Board shall be circulated to all directors as soon as  practicable  after
such  meeting.  The minutes of each  meeting  shall be submitted  for  approval,
subject  to  appropriate  amendment,  at the next  meeting  of the  Board.  Once
approved,  the  minutes  of any  meeting  shall be  signed by the  Chairman  and
Vice-Chairman  and  entered  into a  minute-book  that shall be kept at the JV's
principal  place of  business  and shall be  conclusive  of the  proceedings  in
question.  Such minute-book shall be available for inspection by any director or
his  authorized  representative  at any  reasonable  time.  A copy of the signed
minutes of each meeting shall be sent to each director.

ARTICLE 24. Any action  required or  permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting if all members of the Board of
Directors  consent  thereto in writing and if such writing or writings are filed
with the minutes of  proceedings  of the Board of Directors.  Such consent shall
have the same effect as a unanimous vote of the Board for all purposes.

ARTICLE 25. The vote of four of the five members of the Board of  Directors  (or
their duly appointed  proxies)  shall be sufficient to constitute  action of the
Board on all matters except the matters set forth in sections 1-10, 14 and 18 of
Article 16, as to which the Board may take action only by unanimous  decision of
the five (5) members (or their duly appointed proxies).

                     Chapter V   MANAGEMENT ORGANIZATION

ARTICLE  26. The Board of  Directors  of the JV shall  establish  operation  and
management  organs  for the JV,  to be  responsible  for daily  operational  and
managerial  work.  Each organ shall have a department  manager  reporting to the
general  manager.  The structure of organization and  responsibilities  for each
position  shall be proposed by the general  manager and approved by the Board of
Directors.


                                       7
<PAGE>


ARTICLE 27. The JV shall establish an Advisory Board that will provide  business
development, marketing and technological assistance to the JV in accordance with
Exhibit A attached hereto.

ARTICLE  28. The JV shall have one  general  manager,  who shall be  selected by
Party B, and one deputy general manager, who shall be selected by Party A.

Article  29. The term of service of each of the  general  manager and the deputy
general  manager  is four (4)  years,  which term may be renewed by the Board of
Directors. The general manager and the deputy general manager may be removed for
cause by the vote of the  Board of  Directors  and  otherwise  by the  selecting
party.  Upon  removal of the general  manager or the deputy  general  manager or
expiration of their respective  terms without  renewal,  the party that selected
the general  manager or deputy general  manager,  as the case may be, shall have
the right to select the replacement  general manager or deputy general  manager,
as the case may be.

Article 30. The qualifications of the general manager are described in Exhibit B
attached hereto. The qualifications and  responsibilities  of the deputy general
manager shall be established by the general manager and approved by the Board.

Article 31. The general  manager  shall  report to the Board of  Directors,  and
shall be responsible  for the daily  management of the JV. Without  limiting the
generality  of the  foregoing,  the  general  manager  shall be vested  with the
following authorities and responsibilities:

          1.   Carrying out various  resolutions  of the Board of Directors  and
               organizing and leading the daily  operation and management of the
               JV;

          2.   Preparing the JV annual Business Plan;

          3.   Developing  and  proposing to the Board of Directors for approval
               the internal management structure of the JV;

          4.   Developing the management systems of the JV;

          5.   Proposing  the  nomination  and  dismissal of the deputy  general
               manager and persons in charge of finance and  accounting  for the
               JV;

          6.   Hiring and dismissing  other managers or working staff not within
               the  retaining  and  dismissal  responsibility  of the  Board  of
               Directors;

          7.   Implementing a confidentiality and security policy;

          8.   Performing Human Resource Management functions; and

          9.   Other  responsibilities  assigned to the  general  manager by the
               Board of Directors.

Article 32. The Chairman,  Vice-Chairman and directors of the Board of Directors
may not act concurrently in the capacity of the general manager,  deputy general
manager or other high-level managerial positions of the JV.

Article  33.  The  general  manager  or the  deputy  general  managers  may  not
concurrently  act as general  managers or deputy  general  managers of any other
economic  organizations,  and may not  participate  in activities in competition
with the JV.

Article 34. The JV shall establish the position of one chief  accountant and one
chief auditor, each to be selected by the Board of Directors.

                                       8
<PAGE>

Article  35.  Both  Parties  agree that the JV shall  operate as an  independent
entity from the parent  companies.  Relationships  between the JV and its parent
companies outside the responsibilities described by the Contract and the Article
of Association  shall be conducted on an arms-length basis and shall be regarded
as normal business relationships.

                         Chapter VI  CONFIDENTIALITY

Article 36. In order to keep confidentiality of the trade secrets of the JV, the
JV shall  establish  a  Confidentiality  Policy,  which  shall be  substantially
similar to the Confidentiality Agreement entered into by and between Party A and
Party B on October 29,1998 and shall comply with Article 74 of the Contract.

Article 37. The JV shall  require all  directors,  managers,  employees,  staff,
workers, independent contractors,  agents and representatives of the JV to agree
to be subject to such Confidentiality  Policy in writing, in accordance with the
terms of Article 74 of the Contract.

                      Chapter VII  FINANCE AND ACCOUNTING

Article 38. The  financial and  accounting  system of the JV shall be formulated
according to, and consistent with, the relevant laws and regulations of the PRC.

Article  39. The fiscal  year of the JV shall be January 1 through  December  31
(the Gregorian calendar year).

Article  40.  All  vouchers,   accounts,  books,  and  financial  and  reporting
statements shall be written in Chinese.  All monthly and annual statements,  and
quarterly  reports  shall be  prepared  both in Chinese  and  English  with both
versions having equal force and effect.  The JV shall render  assistance to each
party for review of such documents by such party.

Article 41. The JV shall adopt Renminbi as the standard currency for the keeping
of accounts.  Except as otherwise  expressly  provided  herein,  the  conversion
between  Renminbi and other foreign  currencies  shall be computed at the posted
exchange rate announced by the PRC  Administration  for Foreign Exchange Control
for the purchase of such currencies on the day payment is made.

Article 42. The JV shall open Renminbi and foreign exchange accounts with a bank
or banks  approved  to handle  foreign  currency  business  by the PRC  national
administrative agencies for foreign exchange control, as determined by the Board
of Directors.

Article 43. The JV shall adopt the internationally used accrual system and debit
and credit method for the keeping of accounts.

Article  44. The JV shall keep full and  accurate  books of account  showing all
revenues and  disbursements  and all assets and  liabilities  of the JV. Without
limiting the  generality of the  foregoing,  such books of account shall include
the following items:

1.   All cash receipts and expenses of the JV;


                                       9
<PAGE>

*omitted and filed  separately  with the United States  Securities  and Exchange
Commission pursuant to a request for confidential treatment.

2.   All records of sales, losses and purchases by the JV;

3.   The registered capital and liability of the JV;

4.   The timing of registered capital contributions,  distributions, changes and
     assignment.

Article 45. The JV shall provide  accounting reports in both English and Chinese
to the Board of  Directors  and each of Party A and Party B on a  quarterly  and
annual basis, and shall include such information in the reports to each of Party
A and Party B. The JV's management  shall provide the annual report of the JV to
the Board of Directors for approval  within two (2) months  following the end of
each fiscal year.

Article  46. An annual  audit of the JV's  accounts  shall be carried  out by an
internationally  known and recognized  accounting  firm  (registered in the PRC)
appointed by the Board of  Directors.  The auditor  shall submit  reports to the
Board of Directors and to the general manager.  All costs and expenses  incurred
in connection with such annual audit shall be borne by the JV. Party A and Party
B shall  each have the right to  procure a special  audit of the JV's  books and
records, provided that the external auditor is from an internationally known and
recognized  accounting  firm,  whose reports shall  likewise be submitted to the
Board of Directors and the general manager.  The costs and expenses  incurred in
connection  with such additional  audit shall be borne by the requesting  party,
unless  such  audit  shall  disclose  one or more  errors in the  regular  audit
totaling at least one percent (1%) of the aggregate  expenses of the JV for such
year, in which case the JV shall bear such costs and expenses. Party A and Party
B may designate duly  authorized  personnel to inspect,  at reasonable  business
hours, the books and records of the JV at the expense of such party.

Article 47. The period of the capital assets depreciation shall be determined by
the Board of Directors in accordance  with the relevant laws and  regulations of
PRC.

Article 48. All matters  concerning  foreign exchange of the JV shall be handled
in accordance with the "Provisional Regulations for Foreign Exchange of the PRC"
and other relevant regulations.

                     Chapter VIII   PROFITS AND LOSSES

Article 49. The Board of Directors  shall  determine the amounts to be allocated
to the reserve fund,  the enterprise  expansion  fund, and the staff and workers
welfare  and  incentive  fund  (collectively,  the  "Three  Funds")  before  any
distribution  of  profits  is made to  Party A and  Party B. The JV may not make
allocations to such funds (or any similar funds) if such allocations  exceed, in
the aggregate * of the after-tax  profits of the JV, without the unanimous prior
consent of the Board of Directors.


                                       10
<PAGE>


Article 50.  Profits of the JV  (calculated  after (a) repayment of any loans to
third parties  (other than Party A or Party B); (b) payment of any and all taxes
owing by the JV; (c)  satisfaction  of losses for any  previous  years;  and (d)
allocations to the Three Funds in accordance  with Article  49)(the "JV Profit")
shall be distributed to Party A and Party B annually in accordance  with Chapter
XV of the Contract, unless the Board of Directors unanimously determines that no
such  distribution  should be made. The  distribution  of the JV Profit shall be
made within three (3) months of the end of each fiscal year.  All  distributions
to Party B shall be made in US dollars and all distributions to Party A shall be
made in Renminbi.

Article 51. Neither Party A nor Party B shall have any liability of any sort for
the  debts or  obligations  of the JV  beyond  their  contributions  to  capital
pursuant  to the  Contract,  except to the extent of any  third-party  financing
guaranteed by such party pursuant to Article 16 of the Contract.

                      Chapter IX   STAFF AND WORKERS

Article  52.  Matters  relating  to the  staff  and  workers  of the JV  such as
recruitment, employment, dismissal, resignation, wages, labor insurance, welfare
benefits,  incentive and penalty systems,  and labor disciplines are to be dealt
with in accordance with "The PRC Labor Law" and other relevant regulations.

Article 53. All staff and workers for the JV shall be recruited  through an open
and competitive process from the general public. Employment is to be on merit.

Article 54. The JV has the right to issue warnings,  record demerits, and reduce
wages to those staff and workers who violate the rules, policies and disciplines
of the JV. The JV may  dismiss  those  staff and  workers who violate the rules,
policies  and  disciplines  of the JV. Such  dismissal  shall be reported to the
local labor administrative department.

Article 55. The wage system for the staff and workers of the JV shall be decided
by the Board of Directors in accordance  with the relevant PRC  regulations  and
the specific conditions of the JV, and shall be specified in the labor contract.
Matters relating to the recruitment,  wage treatment, social insurance,  welfare
benefits  and  standard of travel  expenses of high level  managerial  personnel
shall be subject to approval of the Board of Directors.

Article  56.  Matters  relating  to  the  welfare  benefits,  incentives,  labor
protection  and  labor  insurance  shall  be  stipulated  by the  JV in  clearly
specified  internal  policies in order to ensure production and work carried out
under normal conditions by the staff and workers.

                          Chapter X   TRADE UNION

Article 57. Staff and workers of the JV have the right to establish trade unions
and conduct trade union  activities  in accordance  with the "Trade Union Law of
the PRC."

                                       11
<PAGE>

Article  58. The trade  union of the JV, if any,  is the  representative  of the
interests  of the  staff  and  workers.  Its  mission  will  be to  protect  the
democratic rights and material interests of the staff and workers, to assist the
JV with the  arrangement  and reasonable use of welfare and incentive  funds, to
organize  the staff and  workers  in the study of  political,  professional  and
scientific  and technical  knowledge,  and develop  literary,  recreational  and
sports  activities,  and to  educate  the staff and  workers  to  observe  labor
discipline and strive to fulfill various economic tasks of the JV.

Article 59. No trade union activities shall intervene in the regular  production
and business  activities of the JV. All trade union members must  participate in
regular production  activities and perform their professional  responsibilities.
By the decision of the general manager,  the heads of trade union may be engaged
in other job responsibilities.

Article 60.  Trade union  representatives  have the right to attend as nonvoting
delegates,  making known the  opinions and demands of the staff and workers,  at
meetings of the Board of  Directors at which such major  matters as  development
plans and production and operational activities of the JV are under discussion.

Article 61. The trade union of the JV shall participate in the meditation of the
disputes between staff and workers and the JV.

Article 62. In the event of the establishment of a trade union and to the extent
required by applicable law in the PRC, the JV shall each month allot two percent
(2%) out of the total amount of the real wages of the JV's staff and workers for
payment into the trade union fund, for the trade union to use in accordance with
the Regulations of the Trade Union Funds promulgated by the All-China Federation
of Trade Unions of the PRC.

                 Chapter XI  TERM, TERMINATION AND LIQUIDATION

Article 63. These Articles of Association shall come into force and effect,  and
the JV shall be deemed to have been established,  as of the date of the issuance
of the JV's business  license in accordance with the laws of the PRC. Subject to
Article  64,  the term of the JV shall  be  thirty  (30)  years  unless  earlier
dissolved in accordance with these Articles of Association.

Article 64. Upon the proposal of one party and  unanimous  approval by the Board
of Directors,  the JV may extend the term of the JV by filing an application for
extension of the JV term with the original  examination  and approval  organ six
(6) months before the date of expiration of the JV term. The JV shall  undertake
appropriate  registration procedures with the original Administrative Bureau for
Industry and Commerce.

Article 65. The JV shall be  dissolved  (a) upon  expiration  of the term of the
Contract,  unless extended by the parties  thereto,  and (b) upon termination of
the Contract, in accordance  therewith.

Article  66.  Upon the  dissolution  of the JV,  the  Board of  Directors  shall
formulate the procedures and  principles  for  liquidation

                                       12
<PAGE>

and shall select the members of the liquidation  committee,  which shall include
at least one representative from Party A and one representative from Party B.

Article  67.  The  tasks of the  liquidation  committee  shall be to  conduct  a
complete  check of the JV's  property and its  creditors'  rights and debts,  to
prepare a  statement  of assets and  liabilities  and a list of  properties,  to
submit a valuation of the property and the basis of calculation,  to formulate a
liquidation plan, and to submit these to a meeting of the Board of Directors and
implement them after adoption by the Board of Directors.

Article 68. During the period of liquidation,  the  liquidation  committee shall
represent the JV in suing and being sued. The  liquidation  expenses  (which the
liquidation  committee  shall ensure are  reasonable)  and the  remuneration  of
members of the liquidation  committee shall be paid from the existing  resources
of the JV and shall be given  priority  over  other  obligations  of the JV. The
remuneration  of  members  of the  liquidation  committee  shall be  subject  to
approval by the Board.

Article 69. The property  remaining  after  discharge of all the debts of the JV
(including, without limitation, the payment of any liquidation expense) shall be
distributed in accordance with the respective Distribution Ratios (as defined in
the Contract) of Party A and Party B.

Article 70. Upon completion of the liquidation,  the JV is to submit a report to
the  original  examination  and approval  organ.  Cancellation  of  registration
procedures are to be undertaken with the Administrative  Bureau for Industry and
Commerce  and  the  business   license  handed  in  for   cancellation.   Public
announcement shall be made thereafter.

                     Chapter XII   RULES AND REGULATIONS

Article 71. Regulations and rules to be adopted by the Board of Directors are as
follows:

1.   Operation and management rules;
2.   Policy for staff and workers;
3.   Labor and wages system;
4.   Welfare system for staff and workers;
5.   Financial and accounting systems;
6.   Internal confidentiality and security system;
7.   Other necessary rules and regulations.

                         Chapter XIII   APPENDICES

Article 72.  Amendments to this Articles of Association  shall be adopted by the
unanimous  agreement  by the Board of  Directors  and  reported to the  original
examination and approval organ for approval.

Article 73.  These  Articles  of  Association  are  written in both  Chinese and
English,  which  versions  shall each have equal force.  The original is made in
eight copies.

                                       13
<PAGE>

These Articles of Association are signed by representatives of Party A and Party
B in Parsippany, New Jersey, United States of America, on June (month) 15 (day),
2000.

/s/ Cai Dong Chen
-----------------
Legal Representative

SHIJIAZHUANG PHARMACEUTICAL GROUP COMPANY, LTD


/s/ Dr. Warren P. Levy
----------------------
Legal Representative

UNIGENE LABORATORIES, INC.


                                       14
<PAGE>

Exhibit A.

Advisory Board

The Mission:  The  Advisory  Board  shall  be a  non-standing  body  of the JV,
              established to assist the JV and the General  Manager in bringing
              advanced   business   expertise  (e.g.   marketing,   management,
              information  technology,  medical,  etc) to the JV. The  Advisory
              Board shall operate in accordance  with the following  procedures
              and such other procedures as may be established from time to time
              by the  General  Manager  or the  Board.  The  membership  of the
              Advisory Board shall change on an as-needed basis.

1.    The Advisory  Board shall  provide  recommendations  at the request of the
      General Manager with respect to the operation of the JV, including without
      limitation with respect to marketing,  management,  information technology
      and medical issues. The General Manager shall determine  whether,  and the
      manner in which,  to implement any such  recommendations.  In the event of
      any dispute  regarding such matters between a Permanent Member (as defined
      below)  and the  General  Manager,  such  Permanent  Member may bring such
      dispute to the attention of the Board of  Directors.  Neither the Advisory
      Board  nor  any of its  members  in  their  capacity  as such  shall  have
      authority to act for or represent the JV.

2.   The General Manager may nominate members of the Advisory Board to the Board
     of  Directors,  who shall have the right to approve or dismiss such members
     (the "Permanent Members").  Each Permanent Member shall serve as such for a
     term of two (2) years,  unless  earlier  removed by the Board of Directors.
     The General  Manager may select,  or a Permanent  Member may  nominate  for
     approval  by the  General  Manager,  additional  members  to  serve  on the
     Advisory Board (in either case, a "Temporary Member").  The General Manager
     may, in his  discretion,  dismiss any  Temporary  Member  unless  otherwise
     provided by the Board of Directors or may recommend that a Permanent Member
     be  dismissed by the Board of  Directors.  The  membership  of the Advisory
     Board  may  include  third  parties  as well as  employees  of a JV  Party;
     provided,  however,  that no more than three (3)  Permanent  Members may be
     employees of a JV Party and  provided,  further,  that in no event shall an
     employee of a JV Party be  obligated  to serve as a member of the  Advisory
     Board.

3.   Members of the Advisory Board who are also employed by a JV Party shall not
     receive additional compensation from the JV for their service as members of
     the Advisory Board unless otherwise agreed by the Board of Directors. Other
     members of the  Advisory  Board may be  compensated  for their  services as
     required by Chinese law and as otherwise agreed by the Board of Directors.

4.   Any expenses  resulting  from or related to duties  performed by members of
     the  Advisory  Board,  including  but not limited to  expenses  for travel,
     lodging and meals, will be paid by the JV as required by Chinese law and as
     otherwise agreed by the Board of Directors, to the extent such expenses are
     pre-approved by the General Manager.


                                       i
<PAGE>

Exhibit B.

Qualifications of the General Manager

Statement of Purpose:  The General  Manager shall be responsible for meeting all
     responsibilities and obligations of the JV as specified in the JV Contract

To  ensure  the  above,   the  General   Manager   should  have  the   following
qualifications:

1.   Fluent knowledge of both Chinese and English,  strong communication skills,
     and considerable level of computer literacy.

2.   Minimum 3 years experience in an upper management  position in a foreign JV
     in the PRC.

3.   A Masters Degree from a reputable university (MBA highly preferred.)

4.   Appropriate and proven educational and practical  background  providing for
     knowledge and experience in both Chinese and Western (preferably  American)
     business practices.

5.   Proven record of integrity  (with a minimum of four  references  from upper
     management required.)


                                       ii