Document:

EXHIBIT 10.37

THIS WARRANT (THIS  "WARRANT") HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT
OF 1933,  AS AMENDED  (THE "ACT"),  OR ANY STATE  SECURITIES  LAW.  NEITHER THIS
WARRANT NOR ANY SHARES OF COMMON STOCK  ISSUABLE  UPON  EXERCISE  HEREOF NOR ANY
INTEREST OR PARTICIPATION  HEREIN OR THEREIN MAY BE SOLD,  ASSIGNED,  MORTGAGED,
PLEDGED, HYPOTHECATED,  ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE ACT AND APPLICABLE STATE SECURITIES LAWS.

UNIGENE LABORATORIES, INC.

WARRANT

Warrant No.   F-1                       Original Issue Date: March 30, 2001

This  Warrant has been issued in  connection  with and  pursuant to that certain
Common Stock Purchase Agreement (the "Purchase Agreement") dated as of April 23,
2001, by and between UNIGENE  LABORATORIES,  INC., a Delaware  corporation  (the
"Company") and FUSION CAPITAL FUND II, LLC (the "Buyer").

     FOR VALUE  RECEIVED,  the  Buyer,  the  registered  holder  hereof,  or its
permitted  assigns  (the  "Holder"),  is entitled to purchase  from the Company,
during  the  period  specified  in  this  Warrant,   1,000,000  fully  paid  and
non-assessable  shares (subject to adjustment as hereinafter provided) of Common
Stock (the  "Warrant  Shares"),  of the Company at the purchase  price per share
provided in Section 1.2 of this  Warrant (the  "Warrant  Exercise  Price"),  all
subject to the terms and  conditions  set forth in this  Warrant.  All terms not
otherwise defined herein shall have the meaning ascribed to them in the Purchase
Agreement.

Section 1. Period for Exercise and Exercise Price.

     1.1 Period for  Exercise.  The right to purchase  shares of Warrant  Shares
represented by this Warrant shall be immediately  exercisable,  and shall expire
at 5:00 p.m., Chicago local time, March 31, 2006 (the "Expiration  Date").  From
and after the  Expiration  Date  this  Warrant  shall be null and void and of no
further force or effect whatsoever.

     1.2 Warrant Exercise Price. The Warrant Exercise Price per share of Warrant
Shares shall be $0.50 per share (subject to adjustment as hereinafter provided).

<PAGE>

Section 2. Exercise of Warrant.

     2.1 Manner of Exercise.  The Holder may exercise this Warrant,  in whole or
in part, immediately,  but not after the Expiration Date, during normal business
hours on any  business  day by  surrendering  this Warrant to the Company at the
principal  office of the  Company,  accompanied  by a Warrant  Exercise  Form in
substantially  the form annexed hereto duly executed by the Buyer and by payment
of the  Warrant  Exercise  Price for the number of shares of Warrant  Shares for
which this  Warrant is then  exercisable,  either (i) in  immediately  available
funds, (ii) by delivery of an instrument  evidencing  indebtedness  owing by the
Company  to the  Holder in the  appropriate  amount,  (iii) by  authorizing  the
Company to retain shares of Common Stock which would  otherwise be issuable upon
exercise  of this  Warrant  having  a fair  market  value  (defined  as the last
reported  Closing  Sale  Price  of the  Common  Stock  on the  date  immediately
preceding the date of the Warrant Exercise notice) on the date of delivery equal
to the aggregate  Warrant  Exercise Price, or (iv) in a combination of (i), (ii)
or (iii) above, provided, however, that in no event shall the Holder be entitled
to exercise this Warrant for a number of Warrant Shares in excess of that number
of Warrant Shares which,  upon giving effect to such  exercise,  would cause the
aggregate number of shares of Common Stock  beneficially owned by the Holder and
its  affiliates  to exceed 9.9% of the  outstanding  shares of the Common  Stock
following such exercise.  For purposes of the foregoing  proviso,  the aggregate
number of  shares  of Common  Stock  beneficially  owned by the  Holder  and its
affiliates  shall  include the number of shares of Common  Stock  issuable  upon
exercise of this Warrant with respect to which  determination of such proviso is
being made, but shall exclude the shares of Common Stock which would be issuable
upon (i) exercise of the remaining,  unexercised Warrants  beneficially owned by
the Holder and its affiliates and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of the Company beneficially owned
by the Holder  and its  affiliates  subject to a  limitation  on  conversion  or
exercise  analogous to the limitation  contained herein.  Except as set forth in
the preceding  sentence,  for purposes of this paragraph,  beneficial  ownership
shall be calculated in accordance with Section 13(d) of the Securities  Exchange
Act of 1934,  as  amended.  The Holder  may waive the  foregoing  limitation  by
written  notice to the Company upon not less than 61 days prior  written  notice
(with such waiver taking  effect only upon the  expiration of such 61 day notice
period).

     2.2 When Exercise Effective.  Each exercise of this Warrant shall be deemed
to have been effected on the day on which all  requirements of Section 2.1 shall
have been met with  respect to such  exercise.  At such time the person in whose
name any  certificate  for shares of Warrant  Shares shall be issuable upon such
exercise shall be deemed for all corporate purposes to have become the Holder of
record  of such  shares,  regardless  of the  actual  delivery  of  certificates
evidencing such shares.

     2.3  Delivery  of Stock  Certificates.  As soon as  practicable  after each
exercise  of this  Warrant,  and in any event no later  than 3 days  after  such
exercise, the Company at its expense will issue Warrant Shares via credit to the
Buyer's account with DTC for the number of Warrant Shares to which such Buyer is
entitled upon such Buyer's  submission

<PAGE>

of the  applicable  Warrant  Exercise  Form  or,  if the  Transfer  Agent is not
participating  in The DTC Fast Automated  Securities  Transfer  Program and DWAC
system,  issue and surrender to the address as specified in the Warrant Exercise
Form,, a certificate,  registered in the name of the Buyer or its designee,  for
the number of shares of Common  Stock to which the Buyer  shall be  entitled  to
upon such exercise.

Section 3.  Adjustment  of  Purchase  Price and Number of  Shares.  The  Warrant
Exercise Price and the kind of securities  issuable upon exercise of the Warrant
shall be adjusted from time to time as follows:

     3.1 Subdivision or Combination of Shares (Stock Splits).  If the Company at
any time effects a subdivision or combination  of the  outstanding  Common Stock
(through a stock  split or  otherwise),  the number of shares of Warrant  Shares
shall be  increased,  in the case of a  subdivision,  or the number of shares of
Warrant  Shares shall be decreased,  in the case of a  combination,  in the same
proportions  as the  Common  Stock  is  subdivided  or  combined,  in each  case
effective  automatically upon, and simultaneously with, the effectiveness of the
subdivision or combination which gives rise to the adjustment.

     3.2 Stock Dividends.  If the Company at any time pays a dividend,  or makes
any other  distribution,  to holders of Common Stock payable in shares of Common
Stock, or fixes a record date for the  determination  of holders of Common Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock,  then the number of shares of Warrant Shares in effect  immediately prior
to such action shall be proportionately  increased so that the Holder hereof may
receive upon  exercise of the Warrant the  aggregate  number of shares of Common
Stock which he or it would have owned  immediately  following such action if the
Warrant had been  exercised  immediately  prior to such action.  The  adjustment
shall  become  effective  immediately  as of the date the  Company  shall take a
record of the  holders of its Common  Stock for the  purpose of  receiving  such
dividend or distribution (or if no such record is taken, as of the effectiveness
of such dividend or distribution).

     3.3 Reclassification,  Consolidation or Merger. If at any time, as a result
of:

     (a) a capital reorganization or reclassification (other than a subdivision,
combination or dividend provided for elsewhere in this Section 3), or

     (b) a merger or  consolidation  of the  Company  with  another  corporation
(whether or not the Company is the surviving corporation),

the Common Stock issuable upon exercise of the Warrants shall be changed into or
exchanged  for the same or a different  number of shares of any class or classes
of  stock  of  the  Company  or  any  other  corporation,  or  other  securities
convertible  into  such  shares,   then,  as  a  part  of  such  reorganization,
reclassification, merger or consolidation,

<PAGE>

appropriate  adjustments  shall be made in the terms of the  Warrants (or of any
securities  into which the Warrants are  exercised or for which the Warrants are
exchanged), so that:

     (y)  the  Holders  of  Warrants  or of  such  substitute  securities  shall
thereafter  be  entitled to receive,  upon  exercise of the  Warrants or of such
substitute securities, the kind and amount of shares of stock, other securities,
money and property  which such Holders  would have  received at the time of such
capital  reorganization,  reclassification,  merger, or  consolidation,  if such
Holders  had  exercised  their  Warrants   immediately  prior  to  such  capital
reorganization, reclassification, merger, or consolidation, and

     (z) the Warrants or such substitute securities shall thereafter be adjusted
on  terms  as  nearly  equivalent  as may  be  practicable  to  the  adjustments
theretofore provided in this Section 3.3.

No consolidation or merger in which the Company is not the surviving corporation
shall be consummated  unless the surviving  corporation shall agree, in writing,
to the  provisions of this Section 3.3. The provisions of this Section 3.3 shall
similarly  apply  to  successive  capital  reorganizations,   reclassifications,
mergers and consolidations.

     3.4 Other Action  Affecting  Common Stock. If at any time the Company takes
any action affecting its Common Stock,  other than an action described in any of
Sections  3.1 - 3.3  which,  in the  opinion  of the Board of  Directors  of the
Company (the "Board"),  would have an adverse effect upon the exercise rights of
the Warrants, the Warrant Exercise Price or the kind of securities issuable upon
exercise of the Warrants,  or both, shall be adjusted in such manner and at such
time  as  the  Board  may  in  good  faith  determine  to be  equitable  in  the
circumstances; provided, however, that the purpose of this Section is to prevent
the Company  from taking any action  which has the effect of diluting the number
of shares of Warrant Shares issuable upon exercise of this Warrant.

     3.5 Notice of  Adjustment  Events.  Whenever the Company  contemplates  the
occurrence of an event which would give rise to  adjustments  under this Section
3, the Company shall mail to each Warrant Holder,  at least 20 days prior to the
record  date  with  respect  to such  event  or,  if no  record  date  shall  be
established,  at least 20 days prior to such event, a notice  specifying (i) the
nature of the contemplated  event, and (ii) the date on which any such record is
to be taken for the  purpose  of such  event,  and (iii) the date on which  such
event is expected to become effective, and (iv) the time, if any is to be fixed,
when the  holders  of  record of Common  Stock  (or other  securities)  shall be
entitled to exchange  their  shares of Common  Stock (or other  securities)  for
securities or other property deliverable in connection with such event.

     3.6  Notice of  Adjustments.  Whenever  the kind or  number  of  securities
issuable upon exercise of the Warrants,  or both, shall be adjusted  pursuant to
Section 3, the Company shall deliver a certificate signed by its Chief Executive
Officer and by its Chief Financial Officer, setting forth, in reasonable detail,
the event requiring the adjustment,  the amount of the adjustment, the method by
which such  adjustment was

<PAGE>

calculated  (including  a  description  of the basis on which the Board made any
determination  hereunder),  and the  Warrant  Exercise  Price  and  the  kind of
securities  issuable upon  exercise of the Warrants  after giving effect to such
adjustment,  and shall cause copies of such  certificate  to be mailed (by first
class  mail  postage  prepaid)  to  each  Warrant  Holder  promptly  after  each
adjustment.

Section 4. Reservation of Stock,  etc. The Company  covenants and agrees that it
will at all times  have  authorized,  reserve  and keep  available,  solely  for
issuance and delivery upon the exercise of this Warrant, the number of shares of
Warrant Shares from time to time issuable upon the exercise of this Warrant. The
Company  further  covenants  and agrees that this  Warrant is, and any  Warrants
issued in  substitution  for or  replacement  of this  Warrant  and all  Warrant
Shares,  will upon issuance be duly  authorized  and validly  issued and, in the
case of Warrant Shares,  upon issuance will be fully paid and non-assessable and
free from all preemptive  rights of any stockholder,  and from all taxes,  liens
and charges with respect to the issue thereof  (other than transfer  taxes) and,
if the Common  Stock of the  Company is then listed on any  national  securities
exchanges  (as defined in the  Exchange Act of 1934,  as amended (the  "Exchange
Act")) or quoted on NASDAQ,  shall be, subject to the  restrictions set forth in
Section 5, duly listed or quoted thereon,  as the case may be. In the event that
the number of authorized  but unissued  shares of such Common Stock shall not be
sufficient  to effect the exercise of this entire  Warrant into Warrant  Shares,
then in addition to such other  remedies as shall be  available to the Holder of
this Warrant,  the Company shall promptly take such  corporate  action as may be
necessary to increase its authorized but unissued shares of such Common Stock to
such number of shares as shall be sufficient for such purpose.

Section 5. Ownership, Transfer and Substitution of Warrants.

     5.1  Ownership of Warrants.  The Company may treat the person in whose name
any Warrant is registered  on the register  kept at the principal  office of the
Company as the owner and Holder  thereof for all purposes,  notwithstanding  any
notice to the contrary,  but in all events  recognizing  any  transfers  made in
accordance with the terms of this Warrant.

     5.2 Transfer and Exchange of Warrants.  Upon the  surrender of any Warrant,
properly endorsed, for registration of transfer or for exchange at the principal
office of the  Company,  the Company at its expense  will execute and deliver to
the Holder thereof,  upon the order of such Holder, a new Warrant or Warrants of
like tenor,  in the name of such  Holder or as such Holder may direct,  for such
number of shares with  respect to each such  Warrant,  the  aggregate  number of
shares in any event not to exceed the number of shares for which the  Warrant so
surrendered had not been exercised.

     5.3 REGISTRATION  RIGHTS. THE HOLDER OF THIS WARRANT IS ENTITLED TO CERTAIN
REGISTRATION  RIGHTS WITH RESPECT TO THE WARRANT  SHARES  ISSUABLE UPON EXERCISE
THEREOF.  SAID  REGISTRATION  RIGHTS  ARE SET  FORTH  IN A  REGISTRATION  RIGHTS

<PAGE>

AGREEMENT DATED AS OF APRIL 23, 2001, BY AND BETWEEN THE BUYER AND THE COMPANY.

5.4  Exemption  from  Registration.  If an  opinion  of  counsel  provides  that
registration  is not  required  for the  proposed  exercise  or transfer of this
Warrant or the  proposed  transfer of the Warrant  Shares and that the  proposed
exercise or transfer in the absence of registration would require the Company to
take any action including executing and filing forms or other documents with the
Securities and Exchange  Commission (the "SEC") or any state securities  agency,
or delivering to the Holder any form or document in order to establish the right
of the Holder to  effectuate  the  proposed  exercise or  transfer,  the Company
agrees promptly, at its expense, to take any such action; and provided, further,
that the Company will  reimburse the Holder in full for any expenses  (including
but not limited to the fees and  disbursements  of such  counsel,  but excluding
brokers'  commissions) incurred by the Holder or owner of Warrant Shares on his,
her or its behalf in connection with such exercise or transfer of the Warrant or
transfer of Warrant Shares.

Section 6. No Rights or Liabilities as  Shareholder.  Nothing  contained in this
Warrant shall be construed as conferring  upon the Holder hereof any rights as a
shareholder  of the Company or as  imposing  any  liabilities  on such holder to
purchase  any  securities  or as a  shareholder  of the  Company,  whether  such
liabilities are asserted by the Company or by creditors of the Company.

Section 7. Rule 144 Sales.  At the  request of any Holder who  proposes  to sell
securities  in  compliance  with  Rule  144 of the  SEC,  the  Company  will (i)
forthwith  furnish to such Holder a written  statement  of  compliance  with the
filing  requirements  of the SEC as set forth in Rule 144,  as such rules may be
amended from time to time and (ii) make  available to the public and such Holder
such information as will enable the Holder to make sales pursuant to Rule 144.

Section 8. Miscellaneous.

     8.1 Amendment and Waiver.  This Warrant may be amended with, and only with,
the  written  consent of the  Company  and the  Holder.  Any waiver of any term,
covenant, agreement or condition contained in this Warrant shall not be deemed a
waiver of any other term,  covenant,  agreement or condition,  and any waiver of
any default in any such term,  covenant,  agreement  or  condition  shall not be
deemed a waiver of any later  default  thereof  or of any  default  of any other
term, covenant, agreement or condition.

     8.2 Representations and Warranties to Survive Closing. All representations,
warranties  and  covenants  contained  herein shall  survive the  execution  and
delivery  of this  Warrant  and the  issuance  of any  Warrant  Shares  upon the
exercise hereof.

     8.3 Severability. In the event that any court or any governmental authority
or agency declares all or any part of any Section of this Warrant to be unlawful
or invalid,

<PAGE>

such  unlawfulness or invalidity shall not serve to invalidate any other Section
of this  Warrant,  and in the event  that only a portion  of any  Section  is so
declared to be unlawful or invalid,  such  unlawfulness or invalidity  shall not
serve to invalidate the balance of such Section.

     8.4 Binding Effect;  No Third Party  Beneficiaries.  All provisions of this
Warrant  shall be binding upon and inure to the benefit of the parties and their
respective heirs, legatees,  executors,  administrators,  legal representatives,
successors,  and  permitted  transferees  and assigns.  No person other than the
holder of this Warrant and the Company shall have any legal or equitable  right,
remedy or claim under or in respect of, this Warrant.

     8.5  Notices.  Any  notices,  consents,  waivers  or  other  communications
required or  permitted  to be given under the terms of this  Warrant  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 Trading 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:      973-227-6088
      Attention:      Dr. Warren Levy

With a copy to:
      Covington & Burling
      1201 Pennsylvania Avenue, N.W.
      Washington, D.C. 20004
      Telephone:      202-662-5276
      Facsimile:       202-778-5276
      Attention:       D. Michael Lefever

If to the Buyer:
      Fusion Capital Fund II, LLC
      222 Merchandise Mart Plaza, Suite 9-112
      Chicago, IL 60654
      Telephone:      312-644-6644
      Facsimile:      312-644-6244
      Attention:      Steven G. Martin

<PAGE>

If to the Transfer Agent:
      Registrar & Transfer Company
      10 Commerce Drive
      Cranford, NJ 07016
      Telephone:      908-497-2300
      Facsimile:      908-497-2310
      Attention: Ms. Florence Bogaenko

or at 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  three (3)  Trading  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, and recipient facsimile number or (C) provided by a nationally  recognized
overnight  delivery 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.

     8.6 Taxes,  Costs and  Expenses.  The Company  covenants and agrees that it
will pay when due and payable any and all federal,  state and local taxes (other
than  income  taxes) and any other  costs and  expenses  which may be payable in
respect of the preparation,  issuance, delivery, exercise, surrender or transfer
of this  Warrant  pursuant to the terms of this  Warrant or the  issuance of any
shares  of  Warrant  Shares  as a  result  thereof.  If any  suit or  action  is
instituted  or attorneys  employed to enforce this Warrant or any part  thereof,
the  Company  promises  and  agrees  to pay all costs  and  expenses  associated
therewith, including reasonable attorneys' fees and court costs.

     8.7 Governing  Law;  Jurisdiction;  Jury Trial.  The corporate  laws of the
State of Delaware shall govern all issues  concerning the relative rights of the
Company and its shareholders.  All other questions  concerning the construction,
validity,  enforcement and  interpretation  of this Warrant shall be governed by
the internal laws of the State of Illinois,  without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Illinois or
any other  jurisdictions)  that would cause the  application  of the laws of any
jurisdictions  other than the State of Illinois.  Each party hereby  irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of Chicago,  for the adjudication of any dispute hereunder or under the
other Transaction Documents or in connection herewith or therewith,  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

<PAGE>

any right to serve  process in any manner  permitted  by law.  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.

     8.8 Loss of Warrant.  Upon  receipt by the  Company of evidence  reasonably
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Warrant,  and (in the case of loss, theft or destruction) of  indemnification in
form and substance acceptable to the Company in its reasonable  discretion,  and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.

     8.9  Entire  Agreement.  This  Warrant,  the  Purchase  Agreement  and  the
Registration  Rights  Agreement  of even  date  herewith  represent  the  entire
agreement and  understanding  between the parties  concerning the subject matter
hereof and supercede all prior and contemporaneous  agreements,  understandings,
representations and warranties with respect thereto.

     8.10 Headings.  The headings used herein are used for convenience  only and
are not to be considered in construing or interpreting this Warrant.

                                COMPANY:

                                UNIGENE LABORATORIES, INC.

                                By:______________________________
                                   Name: Warren Levy
                                   Title: Chief Executive Officer

<PAGE>

                             WARRANT EXERCISE FORM

                                                        Date:_____________

Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, NJ  07004
Attention: Dr. Warren Levy

Ladies and Gentlemen:

The  undersigned,  being the  registered  holder of your Warrant  number  ______
accompanying this letter,  hereby  irrevocably  exercises such Warrant for _____
shares of  Warrant  Shares (as  defined in said  Warrant),  and  herewith  makes
payment  therefor in the amount of ($___________  )(via "cash-less  exercise" in
accordance with the Warrant), and requests that such shares of Warrant Shares be
issued in the name of, and  delivered  to Fusion  Capital  Fund II,  LLC, at the
address shown below the signature line hereof.

If said number of shares shall not be all the shares  issuable  upon exercise of
the  attached  Warrant,  a new  Warrant  is to be  issued  in  the  name  of the
undersigned  for the balance  remaining  of such  shares less any  fraction of a
share paid in cash.

Sincerely,

Fusion Capital Fund II, LLC

--------------------------------------
Signature of Registered Warrant Holder

Fusion Capital Fund II, LLC
222 Merchandise Mart Plaza, Suite 9-112
Chicago, IL  60654

<PAGE>

                FORM OF COMPANY CONFIRMATION OF WARRANT EXERCISE

     Reference is made to the Common Stock Purchase Agreement (the "Common Stock
Purchase  Agreement")  between  UNIGENE  LABORATORIES,  INC. (the "Company") and
FUSION  CAPITAL  FUND II,  LLC dated  April 23,  2001.  In  accordance  with and
pursuant  to the Common  Stock  Purchase  Agreement,  the  Company has issued to
FUSION  CAPITAL  FUND II, LLC a Warrant to Purchase  1,000,000  shares of common
stock,  par value  $.01 per share  (the  "Common  Stock")  of the  Company.  The
undersigned  hereby  confirms that FUSION CAPITAL FUND II, LLC has exercised the
Warrant to purchase  _____ shares of Common stock and authorizes the issuance of
______ shares of common stock,  par value $.01 per share (the "Common Stock") of
the Company,  in connection with the Warrant Exercise Notice  Specifically,  the
Company hereby confirms the following information:

  Number of shares of Common Stock to be issued:
  Remaining Number of shares

  Subject to Exercise:                  ______________________________________
  Exercise Price:                       $.50/share  of  Common  Stock (Subject
                                        to Adjustment pursuant to the Warrant)

The shares of Common Stock shall be issued in the name and to the address as set
forth in the applicable Warrant Exercise Notice.

Authorized Signature                   _______________________________________
                                       Name:__________________________________
                                       Title:_________________________________
                                       Phone #:_______________________________
                                       Fax #:_________________________________<PAGE>

                     GE LIFE AND ANNUITY ASSURANCE COMPANY
                     OPTIONAL ENHANCED DEATH BENEFIT RIDER
-------------------------------------------------------------------------------

This rider provides for an optional enhanced death benefit which is added to the
Death Benefit payable under your Contract or Policy.  For the purposes of this
rider, the term Contract Value will also refer to Account Value, if that term is
used in your Contract or Policy.

Enhanced Death Benefit

Enhanced death benefit if the Annuitant is, or both the Annuitant and Joint
Annuitant are, age 70 or younger at issue: The enhanced death benefit is equal
to 40% of (a) minus (b), where:
     (a)  is the Contract Value as of the date of receipt of due proof of death;
          and
     (b)  is the sum of premiums paid and not previously withdrawn or partially
          surrendered.

The enhanced death benefit cannot exceed 70% of premiums paid as adjusted for
withdrawals or partial surrenders.  Premiums, other than the initial premium,
paid within 12 months of death are not included in this calculation.  The
enhanced death benefit will never be less than zero.

Enhanced death benefit if the Annuitant, or the Joint Annuitant if applicable,
is older than age 70 at  issue:  The enhanced death benefit is equal to 25% of
(a) minus (b), where:
     (a) is the Contract Value as of the date of receipt of due proof of death;
         and
     (b) is the sum of premiums paid and not previously withdrawn or partially
         surrendered.

The enhanced death benefit cannot exceed 40% of premiums paid as adjusted for
withdrawals or partial surrenders.  Premiums, other than the initial premium,
paid within 12 months of death are not included in this calculation.  The
enhanced death benefit will never be less than zero.

Under both age scenarios listed above, withdrawals or partial surrenders are
taken first from gain and then from premiums made.  For purposes of this rider,
gain is calculated as (a) plus (b) minus (c) minus (d), but not less than zero
where:
     (a)  is the Contract Value on the date we receive your withdrawal or
          surrender request;
     (b)  is the total of any withdrawals or partial surrenders, excluding
          surrender charges, previously taken;
     (c)  is the total of premiums paid; and
     (d)  is the total of any gain previously withdrawn or partially
          surrendered.

When Enhanced Death Benefit is Calculated at Death of Annuitant or Any Joint
Annuitant:   The enhanced death benefit is calculated on the date that we
receive due proof of death at our Home Office.  Until we receive complete
written settlement instructions satisfactory to us from the beneficiary, the
calculated enhanced death benefit will remain allocated to the various
Investment Options according to your last instructions.  Therefore, the enhanced
death benefit will fluctuate with the performance of the underlying Investment
Options.

Annual Enhanced Death Benefit Charge

There will be a charge made for this rider while it is in effect.  This charge
is made in arrears at the beginning of each Contract or Policy year after the
first and at surrender.  The charge is made against the average of the Contract
Value at surrender.  This charge will be deducted proportionally from the
Subaccounts or Investment Subdivisions in which you are invested. The maximum
annual charge will

<PAGE>

be the rate shown on the Contract or Policy data pages times the average
Contract Value, as described above.

The actual charge will never be greater than the maximum annual charge.  The
charge at surrender will be a prorata portion of the annual charge.

If the Contract Value in the Separate Account is insufficient to cover the
annual death benefit charge, then the deduction will be made first from the
Contract Value in the Separate Account.  The excess of the charges over the
Contract Value in the Separate Account will then be deducted from the Contract
Value in the Guarantee Account.  Deductions from the Guarantee Account will be
taken first from the amounts which have been in the Guarantee Account for the
longest period of time.

When this Rider is Effective

This rider becomes effective on the Contract Date or Policy Date.  It will
remain in effect while this Contract or Policy is in force and before Income
Payments begin.  This rider cannot otherwise be terminated.

For GE Life and Annuity Assurance Company,

                                Pamela S. Schutz
                                   President

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