Document:

EXHIBIT 10.35

                                                                 EXECUTION COPY

                         COMMON STOCK PURCHASE AGREEMENT

     COMMON STOCK PURCHASE  AGREEMENT (the  "Agreement"),  dated as of April 23,
2001 by and between  UNIGENE  LABORATORIES,  INC., a Delaware  corporation  (the
"Company"),  and  FUSION  CAPITAL  FUND II,  LLC  (together  with its  permitted
assigns,  the "Buyer").  Capitalized terms used herein and not otherwise defined
herein are defined in Section 10 hereof.

                                    WHEREAS:

     Subject  to the  terms and  conditions  set  forth in this  Agreement,  the
Company  wishes  to sell to the  Buyer,  and the  Buyer  wishes  to buy from the
Company, up to Twenty One Million Dollars  ($21,000,000) of the Company's common
stock, par value $.01 per share (the "Common Stock"). The shares of Common Stock
to be purchased hereunder are referred to herein as the "Purchase Shares."

     NOW THEREFORE, the Company and the Buyer hereby agree as follows:

     1.   PURCHASE OF COMMON STOCK.

     Subject to the terms and conditions set forth in Sections 6, 7 and 9 below,
the Company  hereby agrees to sell to the Buyer,  and the Buyer hereby agrees to
purchase from the Company, shares of Common Stock as follows:

     (a)  Commencement  of Purchases of Common  Stock.  The purchase and sale of
Common Stock  hereunder  shall  commence  (the  "Commencement")  within five (5)
Trading Days following the date of satisfaction (or waiver) of the conditions to
the  Commencement  set  forth  in  Sections  6 and 7  below,  (the  date of such
Commencement, the "Commencement Date").

     (b) Buyer's Purchase Rights and Obligations. Subject to the Company's right
to suspend  purchases under Section  1(d)(ii)  hereof,  the Buyer shall purchase
shares of Common Stock on each  Trading Day during each Monthly  Period equal to
the Daily Base Amount at the Purchase  Price in  accordance  with Section  1(e).
Within one (1) Trading Day of receipt of Purchase Shares, the Buyer shall pay to
the Company an amount equal to the Purchase Amount with respect to such Purchase
Shares as full payment for the purchase of the Purchase Shares so received.  The
Company  shall not  issue  any  fraction  of a share of  Common  Stock  upon any
purchase. All shares of Common Stock (including fractions thereof) issuable upon
a purchase under this Agreement  shall be aggregated for purposes of determining
whether the  purchase  would  result in the issuance of a fraction of a share of
Common  Stock.  If, after the  aforementioned  aggregation,  the issuance  would
result in the  issuance  of a fraction of a share of Common  Stock,  the Company
shall round such  fraction of a share of Common  Stock up or down to the nearest
whole share.  All  payments  made under this  Agreement  shall be made in lawful
money of the United States of America by wire transfer of immediately  available
funds to such account as the Company may from time to time  designate by written
notice in accordance with the provisions of this Agreement.  Whenever any amount
expressed  to be due by the terms of this  Agreement  is due on any day which is
not a Trading  Day,  the same shall  instead be due on the next  succeeding  day
which is a Trading Day.

     (c) Company's Right to Decrease or Increase the Daily Base Amount

<PAGE>

          (i)  Company's  Right to Decrease the Daily Base  Amount.  The Company
     shall always have the right at any time to decrease the amount of the Daily
     Base Amount by  delivering  written  notice (a "Daily Base Amount  Decrease
     Notice")  to the Buyer  which  notice  shall  specify the amount of the new
     Daily Base  Amount.  The  decrease  in the Daily Base Amount  shall  become
     effective  one  Trading  Day after  receipt  by the Buyer of the Daily Base
     Amount Decrease.  Any Purchase Notices  submitted by the Buyer which have a
     Purchase  Date on or prior to the first (1st)  Trading Day after receipt by
     the Buyer of a Daily Base  Amount  Decrease  Notice  must be honored by the
     Company as otherwise provided herein. The decrease in the Daily Base Amount
     shall remain in effect until the Company delivers to the Buyer a Daily Base
     Amount Increase Notice (as defined below).

          (ii) Company's Right to Increase Daily Base Amount.  The Company shall
     always  have the right at any time to  increase  amount  of the Daily  Base
     Amount up to the Original Daily Base Amount by delivering written notice to
     the Buyer  stating  the new amount of the Daily Base  Amount (a "Daily Base
     Amount Increase Notice").  If the Closing Sale Price of the Common Stock on
     each of the five (5) consecutive  Trading Days immediately prior to a Daily
     Base Amount Increase  Notice is at least $4.00,  the Company shall have the
     right to deliver a Daily Base Amount  Increase  Notice which  increases the
     amount of the Daily Base Amount to any amount above the Original Daily Base
     Amount.  A Daily Base Amount Increase Notice shall be effective one Trading
     Day after  receipt by the Buyer.  Such  increase in the amount of the Daily
     Base Amount  shall  continue in effect until the delivery to the Buyer of a
     Daily  Base  Amount  Decrease  Notice.   Notwithstanding  anything  to  the
     contrary,  if the Daily  Base  Amount  then in effect is  greater  than the
     Original  Daily Base Amount and the Sale Price of the Common  Stock  during
     any Trading Day is less than $4.00, the amount of the Daily Base Amount for
     such  Trading Day on which the Sale Price of the Common  Stock is less than
     $4.00 and for each Trading Day thereafter  shall be the Original Daily Base
     Amount or such lesser  amount as  specified  by the Company in a Daily Base
     Amount Decrease Notice.  Thereafter, the Company shall again have the right
     to  increase  the amount of the Daily Base  Amount to any amount  above the
     Original  Daily Base Amount  only if the  Closing  Sale Price of the Common
     Stock is at least $4.00 on each of five (5) consecutive Trading Days

     (d)  Limitations on Purchases.

          (i) Limitation on Beneficial  Ownership.  The Buyer shall not have the
     right to purchase shares of Common Stock under this Agreement to the extent
     that after  giving  effect to such  purchase  the Buyer  together  with its
     affiliates  would  beneficially  own in excess  of 4.9% of the  outstanding
     shares of the Common Stock  following such purchase.  For purposes  hereof,
     the number of shares of Common  Stock  beneficially  owned by the Buyer and
     its affiliates or acquired by the Buyer and its affiliates, as the case may
     be,  shall  include  the  number  of shares of  Common  Stock  issuable  in
     connection  with a Purchase  Notice  under this  Agreement  with respect to
     which the  determination  is being  made,  but shall  exclude the number of
     shares of Common  Stock which would be issuable  upon (1) a purchase of the
     remaining  Available Amount which has not been submitted for purchase,  and
     (2) exercise or conversion of the unexercised or unconverted portion of any
     other  securities  of  the  Company  (including,  without  limitation,  any
     warrants)  subject to a limitation on  conversion or exercise  analogous to
     the limitation  contained  herein  beneficially  owned by the Buyer and its
     affiliates.  If the 4.9%  limitation is ever reached the Company shall have
     the option to  increase  such  limitation  to 9.9% by  delivery  of written
     notice to the Buyer.  Thereafter,  if the 9.9%  limitation  is ever reached
     this shall not effect or

                                       2
<PAGE>

     limit the Buyer's obligation to purchase the Daily Base Amount as otherwise
     provided in this  Agreement.  For purposes of this Section,  in determining
     the number of outstanding  shares of Common Stock the Buyer may rely on the
     number  of  outstanding  shares  of Common  Stock as  reflected  in (1) the
     Company's  most  recent  Form 10-Q or Form 10-K,  as the case may be, (2) a
     more recent  public  announcement  by the Company or (3) any other  written
     communication by the Company or its transfer agent setting forth the number
     of shares of Common Stock outstanding.  Upon the reasonable written or oral
     request of the Buyer,  the Company  shall  promptly  confirm  orally and in
     writing to the Buyer the number of shares of Common Stock then outstanding.
     In any case,  the number of  outstanding  shares of Common  Stock  shall be
     determined after giving effect to any purchases under this Agreement by the
     Buyer  since  the date as of which  such  number of  outstanding  shares of
     Common  Stock was  reported.  Except as  otherwise  set forth  herein,  for
     purposes of this Section 1(d)(i),  beneficial ownership shall be determined
     in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
     amended.

          (ii) Company's Right to Suspend Purchases. The Company may at any time
     give  written  notice  (a  "Purchase   Suspension  Notice")  to  the  Buyer
     suspending  purchases  by the Buyer  under  this  Agreement.  The  Purchase
     Suspension Notice shall be effective only for Purchase Notices which have a
     Purchase  Date later than one (1) Trading Day after receipt of the Purchase
     Suspension Notice by the Buyer. Any Purchase Notices submitted by the Buyer
     which have a Purchase Date on or prior to the first (1st) Trading Day after
     receipt by the Buyer of the Company's  Purchase  Suspension  Notice must be
     honored  by  the  Company  as  otherwise  provided  herein.  Such  purchase
     suspension  shall continue in effect until the revocation in writing by the
     Company, at its sole discretion. So long as a Purchase Suspension Notice is
     in effect, the Buyer shall not be obligated to purchase any Purchase Shares
     from the Company under Section 1 of this Agreement.

     (e) Mechanics of  Purchasing.  The purchase of shares of Common Stock under
this Agreement shall be conducted in the following manner:

          (i) Buyer's Delivery Requirements.  On each Trading Day that the Buyer
     is to purchase shares of Common Stock under this Agreement, the Buyer shall
     transmit by  facsimile  (or  otherwise  deliver) on or prior to 11:59 p.m.,
     Central Time on the date of purchase,  a copy of a fully executed notice of
     purchase  substantially  in the form  attached  hereto  as  Exhibit  A (the
     "Purchase  Notice") to the  Company.

          (ii)  Company's  Response.  Upon receipt by the Company of a copy of a
     Purchase Notice, the Company shall as soon as practicable,  but in no event
     later than one (1) Trading Day after receipt of such Purchase Notice,  send
     via facsimile (or otherwise  deliver),  a  confirmation  of receipt of such
     Purchase  Notice  in the form  attached  hereto as  Exhibit  B (a  "Company
     Confirmation  of  Purchase  Notice")  to (1) the Buyer and (2) along with a
     copy of the Purchase Notice, the Company's  designated  transfer agent (the
     "Transfer  Agent"),  which  confirmation  shall  constitute an  irrevocable
     instruction  to the  Transfer  Agent to  process  such  Purchase  Notice in
     accordance  with the terms herein.  Upon receipt by the Transfer Agent of a
     copy of the executed  Purchase Notice and a copy of the applicable  Company
     Confirmation  of Purchase  Notice,  the Transfer Agent shall,  on the first
     (1st) Trading Day following the date of receipt of the Company Confirmation
     of Purchase Notice, (A) provided the Transfer Agent is participating in The
     Depository Trust Company's ("The DTC") Fast Automated  Securities  Transfer
     Program,

                                       3
<PAGE>

     credit such  aggregate  number of shares of Common Stock to which the Buyer
     shall be entitled to the Buyer's or its designee's balance account with The
     DTC through its Deposit  Withdrawal At Custodian ("DWAC") system, or (B) if
     the  Transfer  Agent  is  not  participating  in  The  DTC  Fast  Automated
     Securities  Transfer  Program and DWAC  system,  issue and  surrender  to a
     common  carrier for  overnight  delivery to the address as specified in the
     Purchase  Notice,  a certificate,  registered in the name of the Buyer, for
     the number of shares of Common Stock to which the Buyer shall be entitled.

          (iii)  Dispute  Resolution.  In  the  case  of a  dispute  as  to  the
     determination  of the  Purchase  Price,  the  Company  shall  instruct  the
     Transfer  Agent to issue to the Buyer the number of shares of Common  Stock
     that is not  disputed  and shall  submit  the  disputed  determinations  or
     arithmetic  calculations to the Buyer via facsimile  within one (1) Trading
     Day of receipt of the Buyer's Purchase Notice. If the Buyer and the Company
     are unable to agree upon the determination of the Purchase Price within one
     (1) Trading  Day of such  disputed  determination  being  submitted  to the
     Buyer,  then the  Company  shall  within  one (1)  Trading  Day  submit via
     facsimile  the  disputed   determination   of  the  Purchase  Price  to  an
     independent, reputable investment bank selected by the Company and approved
     by the Buyer.  The Company shall cause the  investment  bank to perform the
     determinations and notify the Company and the Buyer of the results no later
     than the fifth (5th)  Trading Day after the date it receives  the  disputed
     determinations  of Purchase  Price.  Such investment  bank's  determination
     shall be binding upon all parties absent manifest error.

          (iv)  Record  Holder.  The person or persons  entitled  to receive the
     shares of Common Stock issuable upon a purchase under this Agreement  shall
     be treated for all purposes as the record  holder or holders of such shares
     of Common Stock on the Purchase Date.

          (v) Company's  Failure to Timely  Deliver  Shares.  If within five (5)
     Trading Days after the Company's  receipt of a copy of the Purchase  Notice
     properly  submitted  in  accordance  with the term and  conditions  of this
     Section 1(e) (subject to extension in accordance with Section 1(e)(iii) for
     a good faith  dispute in  accordance  with the terms of Section  1(e)(iii))
     (the "Share Delivery  Period"),  the Transfer Agent fails to issue Purchase
     Shares  via  credit  to the  Buyer's  account  with DTC for the  number  of
     Purchase Shares  specified in a Purchase Notice  submitted by the Buyer 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 Purchase Notice,  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.  (a  "Purchase  Failure"),  in
     addition to all other  available  remedies which the Buyer may pursue under
     applicable laws and this Agreement (including  indemnification  obligations
     of the  Company set forth in Section 8 hereof),  the  Company  shall pay in
     cash,  on demand,  additional  damages to the Buyer for each day after such
     fifth (5th)  Trading Day that the issuance of such  Purchase  Shares is not
     timely  effected,  in an  amount  equal to 1.5% of the  product  of (I) the
     number  of  Purchase  Shares  not  issued  to the  Buyer on a timely  basis
     pursuant to Section  1(e)(ii)  and to which the Buyer is entitled  and (II)
     the Closing Sale Price of the Common Stock on the Purchase Date.

          (vi) Book Entry.  Notwithstanding  anything to the  contrary set forth
     herein,  upon purchase of any portion of the Available Amount in accordance
     with the terms  hereof,  the  Buyer  shall not be  required  to  physically
     surrender  this  Agreement to the Company.  The Buyer and the Company shall
     each maintain records showing the remaining  Available Amount and the dates
     and  Purchase  Amounts for each  purchase  or shall use such other  method,
     reasonably  satisfactory

                                       4
<PAGE>

     to the Buyer and the Company,  so as not to require  physical  surrender of
     this Agreement upon each purchase. The Buyer and any permitted assignee, by
     acceptance of this Agreement,  acknowledge and agree that, by reason of the
     provisions  of this  paragraph,  following  purchase  of any portion of the
     Available Amount, the remaining Available Amount under this Agreement shall
     be less than the aggregate Available Amount set forth on the face hereof.

     (f) Taxes. The Company shall pay any and all taxes that may be payable with
respect to the  issuance and delivery of any shares of Common Stock to the Buyer
made under of this Agreement.

     2.   BUYER'S REPRESENTATIONS AND WARRANTIES.

     The Buyer represents and warrants to the Company that:

     (a)  Investment  Purpose.  The Buyer is entering  into this  Agreement  and
acquiring the Securities (as defined in Section 4(f) hereof) for its own account
for  investment  only and not with a view  towards,  or for resale in connection
with, the public sale or distribution  thereof;  provided however, by making the
representations  herein,  the Buyer does not agree to hold any of the Securities
for any minimum or other specific term.

     (b) Accredited  Investor Status.  The Buyer is an "accredited  investor" as
that term is defined in Rule 501(a)(3) of Regulation D.

     (c) Reliance on Exemptions.  The Buyer  understands that the Securities are
being  offered  and  sold to it in  reliance  on  specific  exemptions  from the
registration requirements of United States federal and state securities laws and
that the  Company  is relying  in part upon the truth and  accuracy  of, and the
Buyer's   compliance   with,  the   representations,   warranties,   agreements,
acknowledgments  and  understandings  of the Buyer set forth  herein in order to
determine the  availability  of such exemptions and the eligibility of the Buyer
to acquire the Securities.

     (d) Information.  The Buyer has been furnished with all materials  relating
to the business,  finances and operations of the Company and materials  relating
to the offer and sale of the Securities that have been  reasonably  requested by
the Buyer,  including,  without  limitation,  the SEC  Documents  (as defined in
Section  3(f)  hereof).  The  Buyer  understands  that  its  investment  in  the
Securities  involves  a high  degree of risk.  The Buyer (i) is able to bear the
economic risk of an investment in the  Securities  including a total loss,  (ii)
has such knowledge and  experience in financial and business  matters that it is
capable of  evaluating  the merits and risks of the proposed  investment  in the
Securities  and (iii) has had an  opportunity  to ask  questions  of and receive
answers from the officers of the Company concerning the financial  condition and
business of the  Company  and others  matters  related to an  investment  in the
Securities.  Neither such  inquiries nor any other due diligence  investigations
conducted by the Buyer or its representatives  shall modify, amend or affect the
Buyer's right to rely on the Company's  representations and warranties contained
in Section 3 below. The Buyer has sought such  accounting,  legal and tax advice
as it has  considered  necessary to make an informed  investment  decision  with
respect to its acquisition of the Securities.

     (e) No Governmental  Review.  The Buyer  understands  that no United States
federal  or state  agency or any other  government  or  governmental  agency has
passed on or made any  recommendation  or

                                       5
<PAGE>

endorsement  of the  Securities or the fairness or suitability of the investment
in the Securities nor have such  authorities  passed upon or endorsed the merits
of the offering of the Securities.

     (f) Transfer or Resale.  The Buyer  understands  that except as provided in
the Registration  Rights Agreement (as defined in Section 6(a) hereof):  (i) the
Securities have not been and are not being  registered under the 1933 Act or any
state  securities  laws,  and may not be offered  for sale,  sold,  assigned  or
transferred  unless (A) subsequently  registered  thereunder or (B) an exemption
exists  permitting such Securities to be sold,  assigned or transferred  without
such registration;  (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance  with the terms of Rule 144 and further,  if Rule
144 is not applicable, any resale of the Securities under circumstances in which
the seller (or the person  through whom the sale is made) may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation to register the Securities or the Purchase  Shares under the 1933 Act
or any state  securities  laws or to comply with the terms and conditions of any
exemption thereunder.

     (g)  Validity;  Enforcement.  This  Agreement  has been  duly  and  validly
authorized,  executed  and  delivered  on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable  against the Buyer in accordance with
its terms,  subject as to enforceability to general  principles of equity and to
applicable bankruptcy, insolvency,  reorganization,  moratorium, liquidation and
other  similar laws  relating to, or affecting  generally,  the  enforcement  of
applicable creditors' rights and remedies.

     (h) Residency. The Buyer is a resident of the State of Illinois.

     (i) No Prior  Short  Selling.  The Buyer  represents  and  warrants  to the
Company  that at no time  prior  to the  date of this  Agreement  has any of the
Buyer,  its agents,  associates,  representatives  or  affiliates  engaged in or
effected, in any manner whatsoever, directly or indirectly, any (i) "short sale"
(as such term is defined  in Rule 3b-3 of the 1934 Act) of the  Common  Stock or
(ii) hedging transaction, which establishes a net short position with respect to
the Common Stock.

     3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     The Company represents and warrants to the Buyer that:

     (a)  Organization  and  Qualification.  The Company and its  "Subsidiaries"
(which for  purposes of this  Agreement  means any entity in which the  Company,
directly or indirectly, owns 50% or more of the voting stock or capital stock or
other similar  equity  interests)  are  corporations  duly organized and validly
existing in good standing under the laws of the  jurisdiction  in which they are
incorporated,  and have the requisite corporate power and authority to own their
properties  and to carry on their business as now being  conducted.  Each of the
Company and its  Subsidiaries  is duly qualified as a foreign  corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business  conducted by it makes such qualification
necessary,  except to the extent  that the failure to be so  qualified  or be in
good  standing  could not  reasonably  be  expected  to have a Material  Adverse
Effect. As used in this Agreement,  "Material Adverse Effect" means any material
adverse  effect on any of: (i) the  business,  properties,  assets,  operations,
results  of   operations   or  financial   condition  of  the  Company  and  its
Subsidiaries,  if any,  taken as a whole,  (ii)  the  transactions  contemplated
hereby or by the  agreements  and  instruments  to be entered into in connection
herewith  or (iii) the  authority  or  ability of the  Company  to  perform  its
obligations under the Transaction Documents

                                       6
<PAGE>

(as defined in Section 3(b) hereof).  The Company has no Subsidiaries  except as
set forth on Schedule 3(a).

     (b) Authorization;  Enforcement;  Validity. (i) The Company had and has the
requisite   corporate  power  and  authority  to  enter  into  and  perform  its
obligations  under this  Agreement,  the  Warrant  (as  defined in Section  4(f)
hereof),  the Registration  Rights Agreement (as defined in Section 6(a) hereof)
and each of the other  agreements (the forms of which are attached hereto) to be
entered  into  by  the  parties  hereto  in  connection  with  the  transactions
contemplated by this Agreement (collectively,  the "Transaction Documents"), and
to issue the  Securities  and the Purchase  Shares in accordance  with the terms
hereof and thereof, (ii) the execution and delivery of the Transaction Documents
by the  Company  and the  consummation  by it of the  transactions  contemplated
hereby and thereby, including without limitation, the issuance of the Commitment
Shares (as defined in Section 4(f) hereof),  and Warrant and the reservation for
issuance and the issuance of the Purchase  Shares  issuable under this Agreement
and the Warrant  Shares (as defined in Section 4(f)  hereof)  under the Warrant,
have been duly  authorized  by the  Company's  Board of Directors and no further
consent or authorization  is required by the Company,  its Board of Directors or
its shareholders, (iii) this Agreement and the Warrant have been, and each other
Transaction  Document  shall  be on or  prior  to the  Commencement  Date,  duly
executed and  delivered by the Company and (iv) this  Agreement  and the Warrant
constitute,  and each other Transaction Document upon its execution on behalf of
the Company, shall constitute,  the valid and binding obligations of the Company
enforceable  against the Company in accordance with their terms,  except as such
enforceability  may be  limited by general  principles  of equity or  applicable
bankruptcy, insolvency, reorganization,  moratorium, liquidation or similar laws
relating to, or affecting  generally,  the enforcement of creditors'  rights and
remedies.

     (c) Capitalization.  As of the date hereof, the authorized capital stock of
the Company  consists of 60,000,000  shares of Common Stock,  of which as of the
date hereof,  46,436,940  shares are issued and  outstanding,  7,290 are held as
treasury  shares,  1,350,000  shares are reserved  for issuance  pursuant to the
Company's stock option plans of which only  approximately  765,000 shares remain
available and 1,598,002  shares are issuable and reserved for issuance  pursuant
to securities  (other than stock options issued  pursuant to the Company's stock
option plans)  exercisable or exchangeable  for, or convertible  into, shares of
Common  Stock.  No other shares or classes of capital  stock of the Company have
been  authorized by the Company.  All of such  outstanding  shares have been, or
upon  issuance  will be,  validly  issued and are fully paid and  nonassessable.
Except as disclosed in Schedule  3(c),  (i) no shares of the  Company's  capital
stock are subject to preemptive  rights or any other similar rights or any liens
or  encumbrances  suffered  or  permitted  by the  Company,  (ii)  there  are no
outstanding debt securities,  (iii) there are no outstanding options,  warrants,
scrip, rights to subscribe to, calls or commitments of any character  whatsoever
relating to, or securities  or rights  convertible  into,  any shares of capital
stock of the  Company or any of its  Subsidiaries,  or  contracts,  commitments,
understandings  or arrangements by which the Company or any of its  Subsidiaries
is or may  become  bound to issue  additional  shares  of  capital  stock of the
Company  or any of its  Subsidiaries  or  options,  warrants,  scrip,  rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company or any of its Subsidiaries, (iv) there are no agreements or arrangements
under which the Company or any of its  Subsidiaries is obligated to register the
sale of any of their  securities  under the 1933 Act  (except  the  Registration
Rights Agreement), (v) there are no outstanding securities or instruments of the
Company or any of its  Subsidiaries  which  contain  any  redemption  or similar
provisions,  and  there  are  no  contracts,   commitments,   understandings  or
arrangements  by which the Company or any of its  Subsidiaries  is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing  anti-dilution or similar provisions
that were or will be triggered by the issuance of the Securities or the

                                       7
<PAGE>

Purchase  Shares as described in this  Agreement  and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar  plan or  agreement.  The  Company has  furnished  to the Buyer true and
correct copies of the Company's Certificate of Incorporation,  as amended and as
in effect on the date  hereof  (the  "Certificate  of  Incorporation"),  and the
Company's  By-laws,  as  amended  and as in  effect  on  the  date  hereof  (the
"By-laws"),  and summaries of the terms of all  securities  convertible  into or
exercisable for Common Stock, if any, and copies of any documents containing the
material rights of the holders thereof in respect thereto.

     (d) Issuance of Securities.  The  Commitment  Shares and Warrant have been,
and the Warrant  Shares shall be, upon issuance,  duly  authorized in accordance
with the terms hereof,  validly issued,  fully paid and non-assessable and (free
from all taxes,  liens and charges with respect to the issue thereof.  6,000,000
shares of Common Stock have been duly  authorized and reserved for issuance upon
purchase under this Agreement. Upon issuance and payment therefore in accordance
with the terms and conditions of this  Agreement,  the Purchase  Shares shall be
validly issued,  fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue  thereof,  with the holders being  entitled to
all rights accorded to a holder of Common Stock.

     (e) No  Conflicts.  Except as disclosed in Schedule  3(e),  the  execution,
delivery and  performance  of the  Transaction  Documents by the Company and the
consummation by the Company of the transactions  contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Purchase  Shares)  will not (i)  result in a  violation  of the  Certificate  of
Incorporation,  any Certificate of  Designations,  Preferences and Rights of any
outstanding  series of  preferred  stock of the  Company or the  By-laws or (ii)
conflict  with,  or constitute a default (or an event which with notice or lapse
of time or both would become a default)  under,  or give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture or  instrument  to which the Company or any of its  Subsidiaries  is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree  (including  federal and state  securities  laws and  regulations and the
rules and regulations of the Principal  Market  applicable to the Company or any
of its  Subsidiaries) or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected, except in the case of conflicts, defaults
and  violations  under clause (ii),  which could not  reasonably  be expected to
result in a Material  Adverse  Effect.  Except as  disclosed  in Schedule  3(e),
neither the Company nor its  Subsidiaries  is in  violation of any term of or in
default under its Certificate of Incorporation,  any Certificate of Designation,
Preferences  and  Rights of any  outstanding  series of  preferred  stock of the
Company or By-laws or their  organizational  charter or  by-laws,  respectively.
Except as  disclosed  in  Schedule  3(e),  neither  the  Company  nor any of its
Subsidiaries  is in violation of any term of or is in default under any material
contract, agreement, mortgage,  indebtedness,  indenture,  instrument, judgment,
decree or order or any statute,  rule or regulation applicable to the Company or
its  Subsidiaries,  except for possible  conflicts,  defaults,  terminations  or
amendments  which could not  reasonably  be expected to have a Material  Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted,
and shall not be conducted,  in violation of any law,  ordinance,  regulation of
any governmental entity, except for possible violations, the sanctions for which
either individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required  under the 1933 Act,  the Company is not  required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or  governmental  agency or any  regulatory or  self-regulatory  agency in
order for it to  execute,  deliver or perform  any of its  obligations  under or
contemplated by the Transaction Documents in accordance with the terms hereof or
thereof.  Except as disclosed in Schedule  3(e),  all consents,  authorizations,
orders,  filings  and  registrations  which the  Company is  required  to obtain
pursuant to the preceding  sentence shall be obtained or effected on or prior to
the Commencement  Date. Except as disclosed in Schedule 3(e), the

                                       8
<PAGE>

Company is not and has not been  since  January 1,  1999,  in  violation  of the
listing requirements of the Principal Market.

     (f) SEC Documents;  Financial  Statements.  Except as disclosed in Schedule
3(f),  since  January  1,  1999,  the  Company  has  timely  filed all  reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act") (all of the foregoing  filed prior to the date
hereof and all exhibits included therein and financial  statements and schedules
thereto and  documents  incorporated  by  reference  therein  being  hereinafter
referred to as the "SEC  Documents").  As of their  respective  dates (except as
they have been correctly  amended),  the SEC Documents  complied in all material
respects with the  requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents,  and none of the
SEC Documents, at the time they were filed with the SEC (except as they may have
been correctly  amended),  contained any untrue  statement of a material fact or
omitted to state a material fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they were made, not  misleading.  As of their  respective  dates (except as they
have been correctly amended),  the financial  statements of the Company included
in the  SEC  Documents  complied  as to  form  in  all  material  respects  with
applicable  accounting  requirements  and the published rules and regulations of
the SEC with respect  thereto.  Such financial  statements have been prepared in
accordance with generally accepted accounting principles,  consistently applied,
during the periods  involved  (except (i) as may be otherwise  indicated in such
financial  statements  or the  notes  thereto  or (ii) in the case of  unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position  of  the  Company  as of the  dates  thereof  and  the  results  of its
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited statements, to normal year-end audit adjustments).

     (g) Absence of Certain Changes. Except as disclosed in Schedule 3(g), since
September 30, 2000,  there has been no material  adverse change in the business,
properties,  operations,  financial  condition or results of  operations  of the
Company or its  Subsidiaries.  The Company has not taken any steps, and does not
currently  expect  to  take  any  steps,  to  seek  protection  pursuant  to any
bankruptcy  law  nor  does  the  Company  or any of its  Subsidiaries  have  any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings.

     (h) Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation  before  or  by  any  court,  public  board,   government  agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its  Subsidiaries,  threatened  against or affecting the Company,  the
Common Stock or any of the Company's Subsidiaries or any of the Company's or the
Company's Subsidiaries' officers or directors in their capacities as such, which
could reasonably be expected to have a Material Adverse Effect. A description of
each action, suit, proceeding,  inquiry or investigation before or by any court,
public board, government agency,  self-regulatory organization or body which, as
of the date of this  Agreement,  is pending or threatened in writing  against or
affecting the Company, the Common Stock or any of the Company's  Subsidiaries or
any of the  Company's or the  Company's  Subsidiaries'  officers or directors in
their capacities as such, is set forth in Schedule 3(h).

     (i) Acknowledgment  Regarding Buyer's Status. The Company  acknowledges and
agrees that the Buyer is acting solely in the capacity of arm's length purchaser
with respect to the  Transaction  Documents  and the  transactions  contemplated
hereby and  thereby.  The  Company  further  acknowledges  that the Buyer is not
acting as a  financial  advisor or  fiduciary  of the Company (or in any similar
capacity)  with  respect  to the  Transaction  Documents  and  the  transactions
contemplated  hereby and thereby and any advice given by the Buyer or any of its
representatives  or agents in connection with the Transaction  Documents and the
transactions contemplated hereby and

                                       9
<PAGE>

thereby is merely incidental to the Buyer's purchase of the Purchase Shares. The
Company  further  represents to the Buyer that the  Company's  decision to enter
into  the  Transaction  Documents  has  been  based  solely  on the  independent
evaluation by the Company and its representatives and advisors.

     (j)  No  General  Solicitation.   Neither  the  Company,  nor  any  of  its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation  D under  the 1933 Act) in  connection  with the offer or sale of the
Securities  or  the  Purchase  Shares  other  than  the  registration  statement
contemplated in Section 4(a) hereof.

     (k) No Integrated Offering. Neither the Company, nor any of its affiliates,
nor any person acting on its or their behalf has,  directly or indirectly,  made
any offers or sales of any security or solicited any offers to buy any security,
under  circumstances  that would require  registration  of any of the Securities
under the 1933 Act or cause this offering of the  Securities or Purchase  Shares
to be  integrated  with prior  offerings by the Company for purposes of the 1933
Act  or any  applicable  shareholder  approval  provisions,  including,  without
limitation,  under  the rules  and  regulations  of any  exchange  or  automated
quotation  system on which any of the  securities  of the  Company are listed or
designated,  nor will the Company or any of its Subsidiaries  take any action or
steps that would require  registration  of any of the Securities or the Purchase
Shares  under the 1933 Act or cause the offering of the  Securities  or Purchase
Shares to be integrated with other offerings.

     (l) Dilutive  Effect.  The Company  understands and  acknowledges  that the
number of Purchase  Shares  purchasable  under this  Agreement  will increase in
certain  circumstances.  The Company further acknowledges that its obligation to
issue  Purchase  Shares  under this  Agreement in  accordance  with the term and
conditions  hereof is absolute  and  unconditional  regardless  of the  dilutive
effect  that  such  issuance  may  have  on the  ownership  interests  of  other
shareholders of the Company.

     (m) Intellectual  Property Rights.  The Company and its Subsidiaries own or
possess adequate rights or licenses to use all material trademarks, trade names,
service  marks,  service mark  registrations,  service  names,  patents,  patent
rights,    copyrights,    inventions,    licenses,    approvals,    governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses as now conducted.  Except as set forth on Schedule 3(m),  none of the
Company's  material  trademarks,   trade  names,  service  marks,  service  mark
registrations,  service names, patents, patent rights,  copyrights,  inventions,
licenses,   approvals,   government  authorizations,   trade  secrets  or  other
intellectual  property  rights have expired or terminated,  or, by the terms and
conditions  thereof,  are scheduled to expire or terminate within two years from
the date of this  Agreement.  The Company and its  Subsidiaries  do not have any
knowledge of any infringement by the Company or its Subsidiaries of any material
trademark,  trade name rights, patents, patent rights,  copyrights,  inventions,
licenses, service names, service marks, service mark registrations, trade secret
or other  similar  rights of others,  or of any such  development  of similar or
identical  trade secrets or technical  information by others and,  except as set
forth on Schedule 3(m),  there is no claim,  action or proceeding  being made or
brought against, or to the Company's  knowledge,  being threatened against,  the
Company or its Subsidiaries  regarding  trademark,  trade name, patents,  patent
rights,  invention,  copyright,  license,  service names, service marks, service
mark registrations,  trade secret or other infringement,  which could reasonably
be expected to have a Material Adverse Effect.

                                       10
<PAGE>

     (n)  Environmental  Laws.  The  Company  and  its  Subsidiaries  (i) are in
compliance with any and all applicable  foreign,  federal,  state and local laws
and  regulations  relating to the  protection  of human  health and safety,  the
environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable  Environmental Laws to conduct
their  respective  businesses  and  (iii) are in  compliance  with all terms and
conditions of any such permit, license or approval, except where, in each of the
three  foregoing  clauses,  the  failure to so comply  could not  reasonably  be
expected to have, individually or in the aggregate, a Material Adverse Effect.

     (o) Title. The Company and its Subsidiaries  have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property  owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except  such as are  described  in  Schedule  3(o) or such as do not  materially
affect the value of such  property  and do not  interfere  with the use made and
proposed to be made of such property by the Company and any of its Subsidiaries.
Any real property and facilities  held under lease by the Company and any of its
Subsidiaries  are held by them under valid,  subsisting and  enforceable  leases
with such  exceptions as are not material and do not interfere with the use made
and proposed to be made of such  property  and  buildings by the Company and its
Subsidiaries.

     (p)  Insurance.  The  Company and each of its  Subsidiaries  are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such  amounts as  management  of the  Company  believes to be prudent and
customary  in the  businesses  in which the  Company  and its  Subsidiaries  are
engaged.  Neither the Company nor any such  Subsidiary has any reason to believe
that it will not be able to renew its  existing  insurance  coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue  its business at a cost that would not  materially  and
adversely  affect  the  condition,  financial  or  otherwise,  or the  earnings,
business or operations of the Company and its Subsidiaries, taken as a whole.

     (q)  Regulatory  Permits.  The  Company  and its  Subsidiaries  possess all
material  certificates,  authorizations  and permits  issued by the  appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses,  and neither the  Company  nor any such  Subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

     (r) Tax Status.  The Company and each of its Subsidiaries has made or filed
all federal and state income and all other  material  tax  returns,  reports and
declarations  required by any  jurisdiction  to which it is subject  (unless and
only to the extent that the Company and each of its  Subsidiaries  has set aside
on its books  provisions  reasonably  adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental  assessments and
charges  that are  material  in amount,  shown or  determined  to be due on such
returns,  reports and  declarations,  except those being contested in good faith
and has set aside on its books provision  reasonably adequate for the payment of
all taxes for periods  subsequent to the periods to which such returns,  reports
or declarations  apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any  jurisdiction,  and the officers of the
Company know of no basis for any such claim.

     (s) Transactions With Affiliates.  Except as set forth on Schedule 3(s) and
other than the grant or exercise of stock  options  disclosed on Schedule  3(c),
none of the  officers,  directors,  or  employees  of the Company is presently a
party to any transaction with the Company or any of its Subsidiaries (other than
for services as  employees,  officers and  directors),  including  any contract,

                                       11
<PAGE>

agreement or other  arrangement  providing for the  furnishing of services to or
by,  providing for rental of real or personal  property to or from, or otherwise
requiring payments to or from any officer,  director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any  officer,  director,  or any such  employee  has an  interest or is an
officer, director, trustee or partner.

     (t)  Application  of  Takeover  Protections.  The  Company and its board of
directors have taken or will take prior to the  Commencement  Date all necessary
action, if any, in order to render  inapplicable any control share  acquisition,
business  combination,  poison pill (including any  distribution  under a rights
agreement) or other similar  anti-takeover  provision  under the  Certificate of
Incorporation  or the laws of the state of its  incorporation  which is or could
become  applicable to the Buyer as a result of the transactions  contemplated by
this Agreement,  including,  without  limitation,  the Company's issuance of the
Securities and the Purchase  Shares and the Buyer's  ownership of the Securities
and the Purchase Shares.

     (u)  Foreign  Corrupt  Practices.  Neither  the  Company,  nor  any  of its
Subsidiaries,  nor any director, officer, agent, employee or other person acting
on behalf of the  Company or any of its  Subsidiaries  has, in the course of its
actions  for, or on behalf of, the  Company,  used any  corporate  funds for any
unlawful contribution,  gift,  entertainment or other unlawful expenses relating
to  political  activity;  made any direct or  indirect  unlawful  payment to any
foreign or  domestic  government  official  or employee  from  corporate  funds;
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices Act of 1977, as amended; or made any unlawful bribe,  rebate,  payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

     4.   COVENANTS.

     (a) Filing of Registration Statement.  The Company shall within thirty (30)
Trading Days from the date hereof file a new registration statement covering the
sale of at least 6,000,000  Purchase Shares and all ofthe Commitment  Shares and
Warrant Shares. The Buyer and its counsel shall have a reasonable opportunity to
review  and  comment  upon such  registration  statement  or  amendment  to such
registration  statement and any related  prospectus prior to its filing with the
SEC. The Company shall use its best efforts to have such registration  statement
or amendment declared effective by the SEC at the earliest possible date.

     (b) Blue Sky. The Company shall, on or before the  Commencement  Date, take
such action,  if any, as the Company shall reasonably  determine is necessary in
order to obtain an  exemption  for or to qualify the  Commitment  Shares and the
Purchase  Shares  for  sale  to the  Buyer  pursuant  to  this  Agreement  under
securities or "Blue Sky" laws of the states of the United  States  designated by
the Buyer,  and shall provide  evidence of any such action so taken to the Buyer
on or prior to the  Commencement  Date.  The Company  shall make all filings and
reports relating to the offer and sale of the Commitment Shares and the Purchase
Shares required under applicable  securities or "Blue Sky" laws of the states of
the United States following the Commencement Date.

     (c) No Variable Priced Financing.  Other than pursuant to this Agreement or
in  connection  with a  licensing  agreement  with a  pharmaceutical  company or
current licensees of the Company, the primary purpose of which is not to make an
equity investment in the Company,  the Company agrees that beginning on the date
of this  Agreement and ending on the date of  termination  of this Agreement (as
provided  in  Section  11(k)  hereof),  neither  the  Company  nor  any  of  its
Subsidiaries shall, without the prior written consent of the Buyer, contract for
any equity financing  (including any debt financing with

                                       12
<PAGE>

an equity  component)  or issue any  equity  securities  of the  Company  or any
Subsidiary  or  securities  convertible  or  exchangeable  into  or  for  equity
securities of the Company or any Subsidiary  (including  debt securities with an
equity  component)  which, in any case (i) are convertible  into or exchangeable
for an indeterminate number of shares of common stock, (ii) are convertible into
or  exchangeable  for Common Stock at a price which varies with the market price
of the Common Stock,  (iii)  directly or indirectly  provide for any "re-set" or
adjustment of the purchase  price,  conversion  rate or exercise price after the
issuance of the security, or (iv) contain any "make-whole" provision based upon,
directly or indirectly,  the market price of the Common Stock after the issuance
of the security, in each case, other than reasonable and customary anti-dilution
adjustments for issuance of shares of Common Stock at a price which is below the
market price of the Common Stock.

     (d) Listing.  The Company shall  promptly  secure the listing of all of the
Purchase  Shares,  Commitment  Shares  and  Warrant  Shares  upon each  national
securities exchange and automated quotation system, if any, upon which shares of
Common Stock are then listed  (subject to official notice of issuance) and shall
maintain,  so long as any other shares of Common Stock shall be so listed,  such
listing of all such securities from time to time issuable under the terms of the
Transaction   Documents.   The  Company  shall   maintain  the  Common   Stock's
authorization for quotation on the Principal Market. Neither the Company nor any
of its Subsidiaries  shall take any action that would be reasonably  expected to
result in the  delisting  or  suspension  of the Common  Stock on the  Principal
Market.  The Company  shall  promptly,  and in no event later than the following
Trading  Day,  provide to the Buyer  copies of any notices it receives  from the
Principal  Market  regarding the continued  eligibility  of the Common Stock for
listing on such automated quotation system or securities  exchange.  The Company
shall pay all fees and expenses in connection  with  satisfying its  obligations
under this Section.

     (e)  Limitation on Short Sales and Hedging  Transactions.  The Buyer agrees
that  beginning  on the  date  of  this  Agreement  and  ending  on the  date of
termination of this  Agreement as provided in Section  11(k),  the Buyer and its
agents,  representatives and affiliates shall not in any manner whatsoever enter
into or effect,  directly or  indirectly,  any (i) "short sale" (as such term is
defined  in Rule 3b-3 of the 1934 Act) of the  Common  Stock or (ii)  hedging or
other  transaction  that  establishes  a net short  position with respect to the
Common Stock;  provided,  however, that such restrictions shall not apply if the
Buyer  submits to the  Company  within one Trading Day after a sale of shares of
Common  Stock a  Purchase  Notice  entitling  the  Buyer to  receive a number of
Purchase  Shares at least  equal to the number of shares so sold and the Company
fails to timely issue to the Buyer the number of Purchase  Shares at least equal
to the number of shares so sold in accordance with the terms of this Agreement.

     (f)  Previous  Issuance  of  Securities/Limitation  on Sales of  Commitment
Shares.  The Company has previously  issued to the Buyer (i) 2,000,000 shares of
Common Stock (the  "Commitment  Shares") and (ii) a warrant (the  "Warrant")  to
purchase  1,000,000  shares of Common Stock (the  "Warrant  Shares" and together
with the Commitment Shares and the Warrant, the "Securities").  The Buyer agrees
that the Buyer  shall not  transfer  or sell the  Commitment  Shares or  Warrant
Shares  until 480  Trading  Days from the date of this  Agreement  or until this
Agreement has been terminated,  provided,  however, that such restrictions shall
not apply: (i) to transfers to or among affiliates (as defined in the 1934 Act),
(ii) to a pledge in  connection  with a bona fide loan (but not the  foreclosure
thereon) or a deposit to a margin  account,  or (iii) if an Event of Default has
occurred, or any event which, after notice and/or lapse of time, would become an
Event of Default,  including any failure by the Company to timely issue Purchase
Shares  under  this  Agreement.  Notwithstanding  the  forgoing,  the  Buyer may
transfer Commitment Shares or Warrant Shares to a third party in order to settle
a sale made by the Buyer  where the Buyer  reasonably  expects  the  Company  to
deliver  Purchase  Shares to the Buyer under this Agreement so long as the Buyer
maintains  ownership  of the same  overall  number of shares of Common

                                       13
<PAGE>

Stock by "replacing" the Commitment Shares or Warrant Shares so transferred with
Purchase  Shares when the Purchase  Shares are actually issued by the Company to
the Buyer.

     (h) Due Diligence. The Buyer shall have the right, from time to time as the
Buyer may reasonably deem  appropriate,  to perform  reasonable due diligence on
the Company  during  normal  business  hours.  The Company and its  officers and
employees  shall  reasonably  cooperate  with the Buyer in  connection  with any
reasonable  request by the Buyer  related to the  Buyer's due  diligence  of the
Company.

     5. TRANSFER AGENT INSTRUCTIONS.

     On the Commencement,  the Company shall cause any restrictive legend on the
Commitment  Shares to be  removed  and all of the  Purchase  Shares to be issued
under this  Agreement and Warrant Shares to be issued under the Warrant shall be
issued  without  any  restrictive  legend  and shall be issued by the  Company's
transfer  agent  via The DTC Fast  Automated  Securities  Transfer  Program,  by
crediting  the  appropriate  number of shares of Common Stock to which the Buyer
shall be entitled to the Buyer's or its designee's  balance account with The DTC
through The DTC DWAC system,  or, if the Transfer Agent is not  participating in
The DTC Fast Automated  Securities  Transfer Program and DWAC system,  issue and
surrender to the Buyer,  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.  The Company shall issue  irrevocable  instructions to its transfer
agent,  and any subsequent  transfer agent, to issue Purchase Shares in the name
of the  Buyer  or its  respective  nominee(s),  for  the  Purchase  Shares  (the
"Irrevocable  Transfer Agent  Instructions").  The Company warrants to the Buyer
that no  instruction  other than the  Irrevocable  Transfer  Agent  Instructions
referred  to in this  Section 5, will be given by the  Company  to its  transfer
agent with respect to the Purchase Shares and that the Commitment Shares and the
Purchase Shares shall otherwise be freely  transferable on the books and records
of the  Company  as and to  the  extent  provided  in  this  Agreement  and  the
Registration  Rights Agreement  subject to the provisions of Section 4(f) in the
case of the Commitment Shares.

     6.   CONDITIONS TO THE COMPANY'S  OBLIGATION TO COMMENCE SALES OF SHARES OF
          COMMON STOCK.

     The  obligation of the Company  hereunder to commence sales of the Purchase
Shares is subject to the satisfaction of each of the following  conditions on or
before  the  Commencement  Date,  provided  that  these  conditions  are for the
Company's  sole benefit and may be waived by the Company at any time in its sole
discretion by providing the Buyer with prior written notice thereof:

     (a) The Buyer shall have  executed  each of the  Transaction  Documents  to
which  it is a party  and  delivered  the  same  to the  Company  including  the
Registration Rights Agreement substantially in the form of Exhibit C hereto (the
"Registration Rights Agreement").

     (b) Subject to the Company's  compliance  with Section 4(a), a registration
statement  covering the sale of the Commitment  Shares and Warrant Shares and at
least  6,000,000  Purchase  Shares shall have been declared  effective under the
1933 Act by the SEC and no stop order with respect to the Registration Statement
shall be pending or threatened by the SEC.

     (c) The  representations  and  warranties  of the  Buyer  shall be true and
correct  in  all  material  respects  as of the  date  when  made  and as of the
Commencement  Date as though made at that time (except for  representations  and
warranties  that  speak  as of a  specific  date),  and  the  Buyer  shall  have

                                       14
<PAGE>

performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Buyer at or prior to the Commencement Date.

     7.   CONDITIONS TO THE BUYER'S  OBLIGATION TO COMMENCE  PURCHASES OF SHARES
          OF COMMON STOCK.

     The obligation of the Buyer to commence  purchases of Purchase Shares under
this  Agreement is subject to the  satisfaction,  on or before the  Commencement
Date, of each of the following  conditions,  provided that these  conditions are
for the Buyer's  sole  benefit and may be waived by the Buyer at any time in its
sole discretion by providing the Company with prior written notice thereof:

     (a) The Company shall have executed each of the  Transaction  Documents and
delivered the same to the Buyer  including  the  Registration  Rights  Agreement
substantially in the form of Exhibit C hereto.

     (b) The  Company  shall  have  removed  any  restrictive  legend  from  the
Commitment Shares

     (c) The Common Stock shall be  authorized  for  quotation on the  Principal
Market, trading in the Common Stock shall not have been within the last 365 days
suspended by the SEC or the  Principal  Market and the  Purchase  Shares and the
Commitment Shares shall be approved for listing upon the Principal Market.

     (d) The Buyer  shall have  received  the  opinions of the  Company's  legal
counsel  dated  as of  the  Commencement  Date  covering  customary  matters  in
customary form.

     (e) The  representations  and  warranties  of the Company shall be true and
correct  in all  material  respects  (except  to the  extent  that  any of  such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such  representations  and warranties  shall be true and
correct  without further  qualification)  as of the date when made and as of the
Commencement  Date as though made at that time (except for  representations  and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed, satisfied and complied with the covenants,  agreements and conditions
required by the  Transaction  Documents to be  performed,  satisfied or complied
with by the Company at or prior to the  Commencement  Date. The Buyer shall have
received a  certificate,  executed by the CEO,  President or CFO of the Company,
dated as of the Commencement  Date, to the foregoing effect in the form attached
hereto as Exhibit E.

     (f) The Board of  Directors of the Company  shall have adopted  resolutions
substantially  in the form  attached  hereto as Exhibit F which shall be in full
force  and  effect  without  any  amendment  or  supplement  thereto  as of  the
Commencement Date.

     (g) As of the Commencement Date, the Company shall have reserved out of its
authorized  and  unissued  Common  Stock,  solely for the  purpose of  effecting
purchases of Purchase  Shares  hereunder,  at least  6,000,000  shares of Common
Stock.

     (h) The Irrevocable  Transfer Agent Instructions,  in the form of Exhibit G
attached hereto, shall have been delivered to and acknowledged in writing by the
Company and the Company's transfer agent.

                                       15
<PAGE>

     (i) The Company shall have delivered to the Buyer a certificate  evidencing
the  incorporation  and good  standing  of the  Company in the State of Delaware
issued by the  Secretary  of State of the State of  Delaware as of a date within
ten (10) Trading Days of the Commencement Date.

     (j) The Company shall have  delivered to the Buyer a certified  copy of the
Certificate of Incorporation as certified by the Secretary of State of the State
of Delaware within ten (10) Trading Days of the Commencement Date.

     (k) The Company shall have delivered to the Buyer a secretary's certificate
executed by the Secretary of the Company,  dated as of the Commencement Date, in
the form attached hereto as Exhibit H.

     (l) A  registration  statement  covering the sale of all of the  Commitment
Shares,  the Warrant Shares and at least  6,000,000  Purchase  Shares shall have
been  declared  effective  under the 1933 Act by the SEC and no stop  order with
respect to the registration statement shall be pending or threatened by the SEC.
The  Company  shall have  prepared  and  delivered  to the Buyer a final form of
Prospectus  to be  used  by the  Buyer  in  connection  with  any  sales  of any
Commitment Shares, Warrant Shares or any Purchase Shares. The Company shall have
made all  filings  under  all  applicable  federal  and  state  securities  laws
necessary to consummate the issuance of the  Securities and the Purchase  Shares
pursuant to this Agreement in compliance with such laws.

     (m) No Event of Default has  occurred,  or any event  which,  after  notice
and/or lapse of time, would become an Event of Default has occurred.

     (n) On or  prior to the  Commencement  Date,  the  Company  shall  take all
necessary action, if any, and such actions as reasonably requested by the Buyer,
in  order  to  render  inapplicable  any  control  share  acquisition,  business
combination,  shareholder rights plan or poison pill (including any distribution
under a rights  agreement) or other similar  anti-takeover  provision  under the
Certificate of Incorporation or the laws of the state of its incorporation which
is or could  become  applicable  to the  Buyer as a result  of the  transactions
contemplated by this Agreement,  including,  without  limitation,  the Company's
issuance of the Securities and the Purchase Shares and the Buyer's  ownership of
the Securities and the Purchase Shares.

     8.   INDEMNIFICATION.

     In consideration  of the Buyer's  execution and delivery of the Transaction
Documents and acquiring the Securities and the Purchase Shares  hereunder and in
addition  to  all of the  Company's  other  obligations  under  the  Transaction
Documents,  the Company shall defend,  protect,  indemnify and hold harmless the
Buyer and all of its affiliates,  shareholders,  officers, directors,  employees
and direct or indirect  investors  and any of the foregoing  person's  agents or
other  representatives  (including,   without  limitation,   those  retained  in
connection with the transactions  contemplated by this Agreement) (collectively,
the  "Indemnitees")  from and  against  any and all  actions,  causes of action,
suits, claims,  losses,  costs,  penalties,  fees,  liabilities and damages, and
expenses in connection therewith (irrespective of whether any such Indemnitee is
a party to the  action  for which  indemnification  hereunder  is  sought),  and
including  reasonable   attorneys'  fees  and  disbursements  (the  "Indemnified
Liabilities"),  incurred by any Indemnitee as a result of, or arising out of, or
relating  to (a)  any  misrepresentation  or  breach  of any  representation  or
warranty  made  by  the  Company  in the  Transaction  Documents  or  any  other
certificate,  instrument  or document  contemplated  hereby or thereby,  (b) any
breach of any covenant,  agreement or obligation of the Company contained in the
Transaction   Documents  or  any  other  certificate,   instrument  or  document
contemplated  hereby  or  thereby,  or (c) any  cause of  action,  suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution,  delivery, performance or enforcement of the Transaction Documents or
any other certificate,  instrument

                                       16
<PAGE>

or  document  contemplated  hereby  or  thereby,  other  than  with  respect  to
Indemnified  Liabilities  which  directly  and  primarily  result from the gross
negligence  or willful  misconduct  of the  Indemnitee.  To the extent  that the
foregoing  undertaking by the Company may be unenforceable  for any reason,  the
Company shall make the maximum  contribution to the payment and  satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law.

     9.   EVENTS OF DEFAULT.

     An "Event of Default"  shall be deemed to have  occurred at any time as any
of the following events occurs:

     (a) while any registration statement is required to be maintained effective
pursuant to the terms of the Registration Rights Agreement, the effectiveness of
such  registration   statement  lapses  for  any  reason   (including,   without
limitation,  the  issuance of a stop order) or is  unavailable  to the Buyer for
sale of all of the Registrable Securities (as defined in the Registration Rights
Agreement) in accordance with the terms of the  Registration  Rights  Agreement,
and such lapse or unavailability  continues for a period of ten (10) consecutive
Trading  Days or for more than an  aggregate  of thirty (30) Trading Days in any
365-day period;

     (b) the suspension from trading or failure of the Common Stock to be listed
on the Principal Market for a period of ten (10) consecutive Trading Days or for
more than an aggregate of thirty (30) Trading Days in any 365-day period;

     (c) the  failure  of the  Company  or the  Common  Stock to fully  meet the
requirements  for continued  listing on the Principal Market for a period of ten
(10)  consecutive  Trading  Days or for more than an  aggregate  of thirty  (30)
Trading Days in any 365-day period;

     (d) the Company's or the Transfer Agent's notice, verbal or written, to the
Buyer,  including by way of public  announcement,  at any time, of its intention
not to comply with a proper  request for purchase of Purchase  Shares under this
Agreement that is tendered in accordance  with the provisions of this Agreement,
or the  failure of the  Company to deliver a Company  Confirmation  of  Purchase
Notice to the Buyer and to the Transfer Agent in accordance  with the provisions
of this  Agreement  within two (2) Trading Days after the receipt by the Company
of a Purchase Notice (subject to extension in accordance with Section  1(e)(iii)
for a  good  faith  dispute  made  in  accordance  with  the  terms  of  Section
1(e)(iii));  or the  failure  for any  reason  by the  Transfer  Agent  to issue
Purchase  Shares to the Buyer within five (5) Trading Days after the  applicable
Purchase Date; or Warrant Shares to the Buyer within five (5) Trading Days after
the applicable notice.

     (e) intentionally omitted;

     (f) the Company breaches any  representation,  warranty,  covenant or other
term or condition under any Transaction Document if such breach could reasonably
be  expected  to have a Material  Adverse  Effect and  except,  in the case of a
breach of a covenant which is reasonably curable,  only if such breach continues
for a period of at least ten (10) Trading Days;

                                       17
<PAGE>

     (g) except as set forth on Schedule  9(g),  any payment  default  under any
contract  whatsoever  or any  acceleration  prior to maturity  of any  mortgage,
indenture,  contract or  instrument  under which there may be issued or by which
there may be secured or evidenced  any  indebtedness  for money  borrowed by the
Company  or for money  borrowed  the  repayment  of which is  guaranteed  by the
Company,  whether such  indebtedness or guarantee now exists or shall be created
hereafter, which in any case, is in excess of $1,000,000;

     (h) if any Person commences a proceeding against the Company pursuant to or
within the meaning of any Bankruptcy Law;

     (i) if the Company pursuant to or within the meaning of any Bankruptcy Law;
(A) commences a voluntary case, (B) consents to the entry of an order for relief
against  it in an  involuntary  case,  (C)  consents  to  the  appointment  of a
Custodian of it or for all or  substantially  all of its  property,  (D) makes a
general assignment for the benefit of its creditors,  (E) becomes insolvent,  or
(F) is generally unable to pay its debts as the same become due; or

     (j) a court of competent  jurisdiction  enters an order or decree under any
Bankruptcy  Law that;  (A) is for relief  against the Company in an  involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary.

In addition  to any other  rights and  remedies  under  applicable  law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default  has  occurred  and is  continuing,  or if any event
which, after notice and/or lapse of time, would become an Event of Default,  has
occurred  and is  continuing,  the Buyer shall not be  obligated to purchase any
shares of Common  Stock  under  this  Agreement.  If  pursuant  to or within the
meaning of any  Bankruptcy  Law, the Company  commences a voluntary  case or any
Person commences a proceeding  against the Company, a Custodian is appointed for
the  Company or for all or  substantially  all of its  property,  or the Company
makes a general assignment for the benefit of its creditors, (any of which would
be an Event of Default as described in Sections 9(h), 9(i) and 9(j) hereof) this
Agreement shall automatically  terminate without any liability or payment to the
Company without further action or notice by any Person.  No such  termination of
this Agreement shall affect the Company's or the Buyer's  obligations under this
Agreement with respect to pending  purchases and the Company and the Buyer shall
complete  their  respective  obligations  with respect to any pending  purchases
under this Agreement.

     10.  CERTAIN DEFINED TERMS.

     For  purposes  of this  Agreement,  the  following  terms  shall  have  the
following meanings:

     (a) "1933 Act" means the Securities Act of 1933, as amended.

     (b)  "Available   Amount"  means  initially   Twenty  One  Million  Dollars
$21,000,000  in the  aggregate  which  amount  shall be reduced by the  Purchase
Amount as the Buyer  purchases  shares of Common  Stock  pursuant  to  Section 1
hereof.

     (c)  "Bankruptcy  Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.

                                       18
<PAGE>

     (d) "Closing Sale Price" means,  for any security as of any date,  the last
closing  trade price for such  security on the  Principal  Market as reported by
Bloomberg,  or, if the Principal Market is not the principal securities exchange
or trading  market  for such  security,  the last  closing  trade  price of such
security  on the  principal  securities  exchange or trading  market  where such
security is listed or traded as reported by Bloomberg.

     (e)  "Custodian"  means any  receiver,  trustee,  assignee,  liquidator  or
similar official under any Bankruptcy Law.

     (f) "Daily Base Amount" means  initially Forty Three Thousand Seven Hundred
Fifty  Dollars  ($43,750)  per Trading  Day,  which  amount may be  increased or
decreased from time to time pursuant to Section 1(c) hereof.

     (g)  "Maturity  Date" means the date that is 480  Trading  Days (24 Monthly
Periods) from the Commencement  Date which such date may be extended by up to an
additional  six (6) Month  Periods by the Company,  in its sole  discretion,  by
written notice to the Buyer.

     (h) "Monthly Base Amount" means Eight Hundred Seventy Five Thousand Dollars
($875,000) per Monthly Period.

     (i) "Monthly Period" means each successive 20 Trading Day period commencing
with the Commencement Date.

     (j) "Original  Daily Base Amount" means Forty Three  Thousand Seven Hundred
Fifty Dollars ($43,750) per Trading Day

     (k) "Person" means an individual or entity including any limited  liability
company,  a  partnership,   a  joint  venture,   a  corporation,   a  trust,  an
unincorporated  organization  and a  government  or  any  department  or  agency
thereof.

     (l)  "Principal  Market"  means The  Nasdaq  OTC/  Bulletin  Board  market,
provided,  however,  that (i) in the event the  Company's  Common  Stock is ever
listed for trading on the Nasdaq National Market,  Nasdaq SmallCap Market or the
American  Stock  Exchange,  than the  "Principal  Market"  shall mean such other
market on which the Company's Common Stock is then listed, and (ii) for purposes
of Section 9(c) hereof only,  "Principal  Market" shall mean The Nasdaq SmallCap
Market in respect of the  requirements  for  continued  listing on the Principal
Market.

     (m) "Purchase Amount means the portion of the Available Amount submitted in
a Purchase  Notice to be used to  purchase  Common  Stock  pursuant to Section 1
hereof.

     (n) "Purchase Date" means the actual date that the Buyer submits a Purchase
Notice to the Company to purchase  Common  Stock  hereunder so long as the Buyer
shall transmit by facsimile (or otherwise deliver) to the Company on or prior to
11:59 p.m., Central Time on such date.

                                       19
<PAGE>

     (o) "Purchase  Price" means,  as of any Purchase Date, the lower of the (A)
the lowest  Sale Price of the Common  Stock on the  Purchase  Date or such other
date of  determination  and(B)  the  arithmetic  average  of the five (5) lowest
Closing Sale Prices for the Common  Stock  during the fifteen  (15)  consecutive
Trading Days ending on the Trading Day immediately  preceding such Purchase Date
or  other  date  of  determination   (to  be  appropriately   adjusted  for  any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar transaction).

     (p) "Sale Price"  means,  for any security as of any date,  the trade price
for such  security  (other  than in a trade  effected by the Buyer or any of its
affiliates)  on the  Principal  Market  as  reported  by  Bloomberg,  or, if the
Principal Market is not the principal  securities exchange or trading market for
such  security,  the trade price of such  security on the  principal  securities
exchange or trading  market where such  security is listed or traded as reported
by Bloomberg.

     (q) "SEC" means the United States Securities and Exchange Commission.

     (r) "Trading Day" means any day on which the  Principal  Market is open for
customary trading.

     11.  MISCELLANEOUS.

     (a) 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  Agreement  and  the  other
Transaction  Documents  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 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.

     (b)  Counterparts.  This Agreement may be executed in two or more identical
counterparts,  all of which shall be considered  one and the same  agreement and
shall  become  effective  when  counterparts  have been signed by each party and
delivered  to the other  party;  provided  that a facsimile  signature  shall be
considered  due execution  and shall be binding upon the signatory  thereto with
the same force and effect as if the signature were an original,  not a facsimile
signature.

                                       20
<PAGE>

     (c)  Headings.  The  headings  of this  Agreement  are for  convenience  of
reference  and shall not form part of, or affect  the  interpretation  of,  this
Agreement.

     (d)  Severability.  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.

     (e)  Entire  Agreement;  Amendments.  Except  for (1)  the  Confidentiality
Agreement  dated  October  13,  2000  between  the  Company  and the Buyer  (the
"Confidentiality  Agreement") and (2) the Letter Agreement dated the date hereof
between the Company and the Buyer (the "Letter  Agreement"),  (i) this Agreement
supersedes  all other prior oral or written  agreements  between the Buyer,  the
Company, their affiliates and persons acting on their behalf with respect to the
matters  discussed herein including that certain  Confidential  Term Sheet dated
November 14, 2000, and (ii) this Agreement,  the other Transaction Documents and
the  instruments  referenced  herein  contain  the entire  understanding  of the
parties  with  respect to the  matters  covered  herein and  therein.  Except as
specifically set forth in the Confidentiality  Agreement,  the Letter Agreement,
this Agreement or the other Transaction Documents and the instruments referenced
herein or therein,  neither the Company nor the Buyer makes any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement may be amended other than by an instrument in writing  signed by
the Company and the Buyer,  and no provision  hereof may be waived other than by
an instrument in writing signed by the party against whom enforcement is sought.

     (f)  Notices.  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 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

                                       21
<PAGE>

         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

         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.

     (g) Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties and their respective  successors and assigns.  The
Company shall not assign this Agreement or any rights or  obligations  hereunder
without  the  prior  written  consent  of the  Buyer,  including  by  merger  or
consolidation. The Buyer may not assign its rights under this Agreement.

     (h) No Third  Party  Beneficiaries.  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.

     (i) Publicity.  The Buyer shall have the right to approve  before  issuance
any press  releases or any other public  disclosure  (including any filings with
the  SEC)  with  respect  to the  transactions  contemplated  hereby;  provided,
however,  that the Company shall be entitled,  without the prior approval of any
Buyer,  to make any press  release or other  public  disclosure  (including  any
filings  with the SEC) with  respect  to such  transactions  as is  required  by
applicable  law and  regulations  (although  the Buyer shall be consulted by the
Company in  connection  with any such press  release or other public  disclosure
prior to its release and shall be provided with a copy thereof).

     (j) Further  Assurances.  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
the 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.

     (k) Termination. This Agreement may be terminated only as follows:

                                       22
<PAGE>

          (i) By the  Buyer  any time an Event of  Default  exists  without  any
     liability or payment to the Company.  However, if pursuant to or within the
     meaning of any  Bankruptcy  Law, the Company  commences a voluntary case or
     any Person  commences a  proceeding  against the  Company,  a Custodian  is
     appointed for the Company or for all or substantially  all of its property,
     or the Company makes a general assignment for the benefit of its creditors,
     (any of which would be an Event of Default as described  in Sections  9(h),
     9(i) and 9(j) hereof) this Agreement shall automatically  terminate without
     any liability or payment to the Company without further action or notice by
     any  Person.  No such  termination  of this  Agreement  under this  Section
     11(k)(i) shall affect the Company's or the Buyer's  obligations  under this
     Agreement  with respect to pending  purchases and the Company and the Buyer
     shall complete  their  respective  obligations  with respect to any pending
     purchases under this Agreement.

          (ii) In the event that the Commencement  shall not have occurred,  the
     Company shall have the option to terminate this Agreement for any reason or
     for no reason without liability of any party to any other party.

          (iii) In the event that the Commencement shall not have occurred on or
     before May31,  2001, due to the failure to satisfy the conditions set forth
     in  Sections  6 and 7 above  with  respect  to the  Commencement  (and  the
     nonbreaching party's failure to waive such unsatisfied  condition(s)),  the
     nonbreaching party shall have the option to terminate this Agreement at the
     close of business on such date or thereafter without liability of any party
     to any other party.

          (iv) If by the Maturity Date, for any reason or for no reason the full
     Available  Amount under this  Agreement has not been  purchased as provided
     for in Section 1 of this  Agreement,  by the Buyer without any liability or
     payment to the Company.

          (v) At any time after the  Commencement  Date, the Company the Company
     shall have the option to terminate  this Agreement for any reason or for no
     reason by delivering written notice (a "Company Termination Notice") to the
     Buyer electing to terminate this Agreement without any liability or payment
     to the Buyer. The Company  Termination  Notice shall not be effective until
     one (1) Trading Days after it has been received by the Buyer.  Any Purchase
     Notices  submitted  by the Buyer which have a Purchase  Date on or prior to
     the first  (1st)  Trading  Day after  receipt  by the Buyer of the  Company
     Termination  Notice,  must be honored by the Company as otherwise  provided
     herein.

          (vi) This Agreement shall automatically terminate on the date that the
     Company  sells  and  the  Buyer   purchases   Twenty  One  Million  Dollars
     ($21,000,000)  of Common  Stock as provided  herein,  without any action or
     notice on the part of any party.

Except as set forth in Sections 11(k)(i) and 11(k)(vi),  any termination of this
Agreement  pursuant to this  Section  11(k) shall be effected by written  notice
from the Company to the Buyer, or the Buyer to the Company,  as the case may be,
setting forth the basis for the  termination  hereof.  The  representations  and
warranties  of the Company and the Buyer  contained  in Sections 2 and 3 hereof,
the indemnification  provisions set forth in Section 8 hereof and the agreements
and covenants set forth in Section 11, shall  survive the  Commencement  and any
termination of this Agreement. No termination of this Agreement shall effect the
Company's  or the  Buyer's  obligations  under this  Agreement  with  respect to
pending  purchases and the Company and the Buyer shall complete their respective
obligations with respect to any pending purchases under this Agreement.

                                       23
<PAGE>

     (l) No Financial  Advisor,  Placement Agent,  Broker or Finder. The Company
acknowledges  that  it has  retained  Gruntal  & Co.  as  financial  advisor  in
connection with the transactions contemplated hereby. The Company represents and
warrants  to the Buyer  that it has not  engaged  any other  financial  advisor,
placement   agent,   broker  or  finder  in  connection  with  the  transactions
contemplated  hereby.  The Buyer  represents and warrants to the Company that it
has not engaged any  financial  advisor,  placement  agent,  broker or finder in
connection  with the  transactions  contemplated  hereby.  The Company  shall be
responsible for the payment of any fees or commissions, if any, of any financial
advisor,  placement  agent,  broker or finder  relating to or arising out of the
transactions  contemplated  hereby.  The Company  shall pay,  and hold the Buyer
harmless against, any liability, loss or expense (including, without limitation,
attorneys' fees and out of pocket expenses)  arising in connection with any such
claim.

     (m) No Strict  Construction.  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.

     (n)  Remedies,  Other  Obligations,  Breaches and  Injunctive  Relief.  The
Buyer's remedies  provided in this Agreement shall be cumulative and in addition
to all other remedies available to the Buyer under this Agreement,  at law or in
equity  (including  a decree of specific  performance  and/or  other  injunctive
relief),  no remedy of the Buyer  contained  herein  shall be deemed a waiver of
compliance  with the  provisions  giving rise to such remedy and nothing  herein
shall limit the Buyer's  right to pursue  actual  damages for any failure by the
Company to comply with the terms of this  Agreement.  The  Company  acknowledges
that a breach by it of its obligations  hereunder will cause irreparable harm to
the Buyer and that the remedy at law for any such breach may be inadequate.  The
Company  therefore  agrees that,  in the event of any such breach or  threatened
breach,  the  Buyer  shall be  entitled,  in  addition  to all  other  available
remedies,  to an  injunction  restraining  any breach,  without the necessity of
showing economic loss and without any bond or other security being required.

     (o)  Changes  to the  Terms  of  this  Agreement.  This  Agreement  and any
provision  hereof may only be amended by an instrument in writing  signed by the
Company and the Buyer. The term "Agreement" and all reference  thereto,  as used
throughout this instrument,  shall mean this instrument as originally  executed,
or if later amended or supplemented, then as so amended or supplemented.

     (p) Enforcement Costs. If: (i) this Agreement is placed by the Buyer in the
hands of an attorney  for  enforcement  or is enforced by the Buyer  through any
legal proceeding;  or (ii) an attorney is retained to represent the Buyer in any
bankruptcy,   reorganization,   receivership  or  other  proceedings   affecting
creditors'  rights  and  involving  a claim  under this  Agreement;  or (iii) an
attorney is retained to represent the Buyer in any other proceedings  whatsoever
in connection with this  Agreement,  then the Company shall pay to the Buyer, as
incurred by the Buyer,  all reasonable costs and expenses  including  attorneys'
fees  incurred in  connection  therewith,  in addition to all other  amounts due
hereunder.

     (q) Failure or Indulgence  Not Waiver.  No failure or delay in the exercise
of any power,  right or privilege  hereunder  shall operate as a waiver thereof,
nor shall any single or partial  exercise of any such power,  right or privilege
preclude  other or  further  exercise  thereof or of any other  right,  power or
privilege.

                                    * * * * *

                                       24
<PAGE>

         IN WITNESS WHEREOF, the Buyer and the Company have caused this Common
Stock Purchase Agreement to be duly executed as of the date first written above.

                                          THE COMPANY:

                                          UNIGENE LABORATORIES, INC.

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

                                          BUYER:

                                          FUSION CAPITAL FUND II, LLC
                                          BY: FUSION CAPITAL PARTNERS, LLC
                                          BY: SGM HOLDINGS CORP.

                                          By:__________________________
                                          Name: Steven G. Martin
                                          Title: President

                                       25
<PAGE>

                                    SCHEDULES

Schedule 3(a)      Subsidiaries
Schedule 3(c)      Capitalization
Schedule 3(e)      Conflicts
Schedule 3(f)      1934 Act Filings
Schedule 3(g)      Material Changes
Schedule 3(h)      Litigation
Schedule 3(m)      Intellectual Property
Schedule 3(o)      Liens
Schedule 3(s)      Certain Transactions
Schedule 9(g)      Certain Indebtedness

                                    EXHIBITS

Exhibit A          Form of Purchase Notice
Exhibit B          Form of Company Confirmation of Purchase Notice
Exhibit C          Form of Registration Rights Agreement
Exhibit D          [Intentionally Omitted]
Exhibit E          Form of Officer's Certificate
Exhibit F          Form of Resolutions of Board of Directors of the Company
Exhibit G          Form of Irrevocable Transfer Agent Instructions
Exhibit H          Form of Secretary's Certificate

<PAGE>

                              DISCLOSURE SCHEDULES

Schedule 3(a) - Subsidiaries

Schedule 3(c) - Capitalization

Schedule 3(e) - No Conflicts

Schedule 3(f) - 1934 Act Filings

Schedule 3(g) - Absence of Certain Changes

Schedule 3(h) - Litigation

Schedule 3(m) - Intellectual Property Rights

Schedule 3(o) - Title

Schedule 3(s) - Transactions with Affiliates

Schedule 9(g)

<PAGE>

                                    EXHIBIT A

                             FORM OF PURCHASE NOTICE

     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 __________. In accordance with and pursuant to
the Common Stock Purchase  Agreement,  the undersigned hereby elects to purchase
shares of common stock,  par value $.01 per share (the "Common  Stock"),  of the
Company for the Available Amount indicated below as of the date specified below.

         Purchase Date:
                                                 -----------------------------
         Monthly Period Dates:
                                                 -----------------------------
         Initial Available Amount:               $21,000,000
         Monthly Base Amount:                    $875,000

         Remaining Available Amount
         prior to this purchase:                 $
         --------                                -----------------------------

         Remaining Monthly Base Amount
         prior to this purchase:                 $
         --------                                -----------------------------

         Available Amount to be purchased:       $
                                                 --------

         Remaining Available Amount
         after this purchase:                    $
         -----                                   -----------------------------

         Remaining Monthly Base Amount
         after this purchase:                    $
         -----                                   -----------------------------

Please confirm the following information:

         Purchase Price per share:               $
                                                 --------

           Low Sale Price on Date Hereof
           Average of [___] Closing Sale Prices for ______($___), ______($___),
         _______($___), _______($___) and ________($___).

         Number of shares of Common Stock to be issued:

Please issue the shares of Common Stock in the following name and to the
following address:

         Issue to:
                                                 -----------------------------

         Authorized Signature:
                                                 -----------------------------
                                                 Name:
                                                      ------------------------
                                                 Title:
                                                       -----------------------
                                                 Phone #:
                                                         ---------------------

         Broker DTC Participant Code:            ________________
         Account Number* :                       ________________

         * Note that receiving broker must initiate transaction on DWAC System.

<PAGE>

                                    EXHIBIT B

                 FORM OF COMPANY CONFIRMATION OF PURCHASE NOTICE

     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  ________.  In accordance with and pursuant to
the Common  Stock  Purchase  Agreement,  the  undersigned  hereby  confirms  and
authorizes the issuance of shares of common stock, par value $.01 per share (the
"Common  Stock") of the Company,  in  connection  with the  Purchase  Notice (as
defined in the Common Stock Purchase Agreement)  attached hereto.  Specifically,
the Company hereby confirms the following information:

         Purchase Date:
                                               --------------------------------
         Monthly Period Dates:
                                               --------------------------------
         Initial Available Amount:             $21,000,000.00
         Monthly Base Amount:                  $875,000.00

         Remaining Available Amount
         prior to this purchase:               $
         --------                              --------------------------------

         Remaining Monthly Base Amount
         prior to this purchase:               $
         --------                              --------------------------------

         Available Amount to be purchased:     $
                                               --------

         Remaining Available Amount
         after this purchase:                  $
         -----                                 --------------------------------

         Remaining Monthly Base Amount
         after this purchase:                  $
         -----                                 --------------------------------

         Purchase Price per share:             $
                                               --------

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

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

         Authorized Signature
                                               --------------------------------
                                               Name:
                                                    ---------------------------
                                               Title:
                                                     --------------------------
                                               Phone #:
                                                       ------------------------
                                               Fax #:
                                                     --------------------------

<PAGE>

                                    EXHIBIT C

                      FORM OF REGISTRATION RIGHTS AGREEMENT

[Sent separately]

<PAGE>

                                    EXHIBIT E

                          FORM OF OFFICER'S CERTIFICATE

     This Officer's  Certificate  ("Certificate") is being delivered pursuant to
Section  7(e) of that  certain  Common  Stock  Purchase  Agreement  dated  as of
_________,  2001 ("Common Stock  Purchase  Agreement"),  by and between  UNIGENE
LABORATORIES,  INC., a Delaware corporation (the "Company"),  and FUSION CAPITAL
FUND II, LLC (the  "Buyer").  Terms used herein and not otherwise  defined shall
have the meanings ascribed to them in the Common Stock Purchase Agreement.

     The  undersigned,  ___________,   ______________  of  the  Company,  hereby
certifies as follows:

          1. I am the  _____________  of the  Company  and make  the  statements
     contained in this Certificate;

          2. The  representations and warranties of the Company contained in the
     Common Stock Purchase Agreement are true and correct as of the date hereof;

          3. The Company has  performed,  satisfied and complied in all material
     respects  with  covenants,   agreements  and  conditions  required  by  the
     Transaction  Documents to be  performed,  satisfied or complied with by the
     Company at or prior to the Commencement Date.

     IN  WITNESS  WHEREOF,  I have  hereunder  signed my name on this ___ day of
     ___________.

                                                  ----------------------
                                                  Name:
                                                  Title:

     The undersigned as Secretary of ________,  a ________  corporation,  hereby
certifies that ___________ is the duly elected, appointed,  qualified and acting
________ of  _________  and that the  signature  appearing  above is his genuine
signature.

                                    -----------------------------------
                                    Secretary

<PAGE>

                                    EXHIBIT F

                           FORM OF COMPANY RESOLUTIONS

     WHEREAS,  there has been  presented  to the Board of  Directors  of UNIGENE
LABORATORIES,  INC.,  (the  "Corporation")  a draft of a Common  Stock  Purchase
Agreement (the "Purchase  Agreement")  by and among the  Corporation  and Fusion
Capital Fund II, LLC  ("Fusion"),  providing for the purchase by Fusion of up to
Twenty One Million Dollars  ($21,000,000) of the Corporation's common stock, par
value $.01 (the "Common Stock"); and

     WHEREAS,  after  careful  consideration  of  the  Purchase  Agreement,  the
documents  incident  thereto and other factors  deemed  relevant by the Board of
Directors, the Board of Directors has determined that it is advisable and in the
best interests of the Corporation to engage in to  transactions  contemplated by
the Purchase Agreement.

                              Transaction Documents

     RESOLVED,  that the  transactions  described in the Purchase  Agreement are
hereby    approved   and    ____________________________________________    (the
"Authorized  Officers")  are  severally  authorized  to execute  and deliver the
Purchase Agreement,  and any other agreements or documents  contemplated thereby
(including,  without  limitation,  a Warrant for the purchase of _____ shares of
Company Common Stock (the  "Warrant") and a registration  rights  agreement (the
"Registration  Rights  Agreement")  providing  for the sale of the shares of the
Company's Common Stock issuable in respect of the Purchase  Agreement) on behalf
of the Corporation,  with such amendments,  changes,  additions and deletions as
the Authorized Officers may deem to be appropriate and approve on behalf of, the
Corporation,  such approval to be conclusively  evidenced by the signature of an
Authorized Officer thereon; and

     FURTHER RESOLVED,  that the terms and provisions of the Registration Rights
Agreement by and among the  Corporation  and Fusion are hereby  approved and the
Authorized  Officers  are  authorized  to execute and  deliver the  Registration
Rights Agreement  (pursuant to the terms of the Purchase  Agreement),  with such
amendments,  changes, additions and deletions as the Authorized Officer may deem
appropriate  and  approve  on behalf of, an  Corporation,  such  approval  to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

     FURTHER  RESOLVED,  that the terms and provisions of the Warrant are hereby
approved and the  Authorized  Officers are authorized to execute and deliver the
Warrant (pursuant to the terms of the Purchase Agreement), with such amendments,
changes,  additions and deletions as the Authorized Officer may deem appropriate
and  approve on behalf of, an  Corporation,  such  approval  to be  conclusively
evidenced by the signature of an Authorized Officer thereon; and

     FURTHER  RESOLVED,  that the terms and  provisions  of the Form of Transfer
Agent Instructions (the  "Instructions")  are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement),  with such amendments,  changes, additions and
deletions as the Authorized  Officers may deem appropriate and approve on behalf
of, the Corporation, such approval to be conclusively evidenced by the signature
of an Authorized Officer thereon; and

<PAGE>

                         Execution of Purchase Agreement

     FURTHER  RESOLVED,  that the  Corporation be and it hereby is authorized to
execute the Purchase Agreement providing for the purchase of common stock of the
Corporation having an aggregate value of up to $___________; and

                            Issuance of Common Stock

     FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue the
Commitment Shares (as defined in the Purchase Agreement) and that, upon issuance
of the  Commitment  Shares  pursuant to the Purchase  Agreement,  the Commitment
Shares will be duly  authorized,  validly issued,  fully paid and  nonassessable
with no personal liability attaching to the ownership thereof; and

     FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue the
Warrant Shares (as defined in the Purchase Agreement) and that, upon issuance of
the Warrant  Shares  pursuant to the  Warrant,  the Warrant  Shares will be duly
authorized,  validly  issued,  fully  paid and  nonassessable  with no  personal
liability attaching to the ownership thereof; and

     FURTHER RESOLVED, that the Corporation is hereby authorized to issue shares
of Common Stock upon the purchase of shares of Common Stock up to the  available
amount under the Purchase  Agreement (the "Purchase  Shares") in accordance with
the terms of the  Purchase  Agreement  and that,  upon  issuance of the Purchase
Shares  pursuant to the Purchase  Agreement,  the  Purchase  Shares will be duly
authorized,  validly  issued,  fully  paid and  nonassessable  with no  personal
liability attaching to the ownership thereof; and

     FURTHER  RESOLVED,  that the Corporation  shall initially reserve 1,000,000
shares of Common Stock for issuance as Warrant Shares under the Warrant; and

     FURTHER  RESOLVED,  that the Corporation  shall initially reserve _________
shares of Common  Stock for  issuance  as  Purchase  Shares  under the  Purchase
Agreement.

                             Registration Statement

     The  management  of the  Corporation  has  prepared  an initial  draft of a
Registration  Statement on Form ___ (the  "Registration  Statement") in order to
register  the  sale  of  the   Purchase   Shares  and  the   Commitment   Shares
(collectively, the "Shares"); and

     The Board of Directors has determined to approve the Registration Statement
and to authorize the  appropriate  officers of the  Corporation to take all such
actions as they may deem appropriate to effect the Offering; and

     NOW,  THEREFORE,  BE IT RESOLVED,  that the  officers and  directors of the
Corporation  be, and each of them hereby is,  authorized and directed,  with the
assistance of counsel and accountants for the Corporation,  to prepare,  execute
and file with the  Securities and Exchange  Commission  (the  "Commission")  the
Registration   Statement,   which   Registration   Statement   shall   be  filed
substantially in the form presented to the Board of Directors, with such changes
therein as the Chief Executive  Officer of the Corporation or any Vice President
of  the  Corporation  shall  deem  desirable  and in the  best  interest  of the
Corporation and its shareholders  (such officer's  execution  thereof  including
such changes shall be deemed to evidence conclusively such determination); and

     FURTHER RESOLVED, that the officers of the Corporation be, and each of them
hereby  is,  authorized  and  directed,  with  the  assistance  of  counsel  and
accountants  for  the  Corporation,  to  prepare,

<PAGE>

execute and file with the Commission all  amendments,  including  post-effective
amendments, and supplements to the Registration Statement, and all certificates,
exhibits,   schedules,   documents  and  other   instruments   relating  to  the
Registration  Statement,  as such officers  shall deem  necessary or appropriate
(such  officer's  execution  and  filing  thereof  shall be deemed  to  evidence
conclusively such determination); and

     FURTHER RESOLVED,  that the execution of the Registration  Statement and of
any  amendments  and  supplements  thereto by the officers and  directors of the
Corporation  be,  and  the  same  hereby  is,  specifically   authorized  either
personally or by the Authorized  Officers as such  officer's or director's  true
and lawful attorneys-in-fact and agents; and

     FURTHER RESOLVED,  that the Authorized Officers are hereby is designated as
"Agent for  Service" of the  Corporation  in  connection  with the  Registration
Statement  and the  filing  thereof  with  the  Commission,  and the  Authorized
Officers hereby are,  authorized to receive  communications and notices from the
Commission with respect to the Registration Statement; and

     FURTHER RESOLVED, that the officers of the Corporation be, and each of them
hereby is,  authorized and directed to pay all fees, costs and expenses that may
be incurred by the  Corporation in connection with the  Registration  Statement;
and

     FURTHER  RESOLVED,  that it is  desirable  and in the best  interest of the
Corporation  that the  Shares be  qualified  or  registered  for sale in various
states;  that the  officers of the  Corporation  be, and each of them hereby is,
authorized to determine the states in which appropriate action shall be taken to
qualify  or  register  for sale all or such part of the  Shares as they may deem
advisable;  that said  officers  be, and each of them hereby is,  authorized  to
perform  on  behalf  of the  Corporation  any and all such acts as they may deem
necessary or advisable in order to comply with the  applicable  laws of any such
states, and in connection therewith to execute and file all requisite papers and
documents,  including, but not limited to, applications,  reports, surety bonds,
irrevocable  consents,  appointments  of  attorneys  for  service of process and
resolutions; and the execution by such officers of any such paper or document or
the doing by them of any act in  connection  with the  foregoing  matters  shall
conclusively  establish  their  authority  therefor from the Corporation and the
approval and  ratification  by the  Corporation  of the papers and  documents so
executed and the actions so taken; and

     FURTHER  RESOLVED,  that  if,  in any  state  where  the  securities  to be
registered or qualified for sale to the public,  or where the  Corporation is to
be  registered  in  connection  with the public  offering of the  Securities,  a
prescribed  form of resolution or  resolutions  is required to be adopted by the
Board of Directors, each such resolution shall be deemed to have been and hereby
is adopted,  and the  Secretary is hereby  authorized to certify the adoption of
all such  resolutions  as though  such  resolutions  were now  presented  to and
adopted by the Board of Directors; and

     FURTHER RESOLVED,  that the officers of the Corporation with the assistance
of counsel be, and each of them hereby is,  authorized  and directed to take all
necessary steps and do all other things  necessary and appropriate to effect the
listing of the Shares on the __________.

                               Approval of Actions

     RESOLVED,  that,  without limiting the foregoing,  the Authorized  Officers
are, and each of them hereby is, authorized and directed to proceed on behalf of
the Corporation  and to take all such steps as deemed  necessary or appropriate,
with the  advice  and  assistance  of  counsel,  to  cause  the  Corporation  to

<PAGE>

consummate  the  agreements  referred to herein and to perform  its  obligations
under such agreements; and

     RESOLVED,  that the  Authorized  Officers  be, and each of them  hereby is,
authorized,  empowered  and  directed  on  behalf  of  and in  the  name  of the
Corporation,  to take or cause  to be taken  all  such  further  actions  and to
execute and  deliver or cause to be  executed  and  delivered  all such  further
agreements,   amendments,   documents,    certificates,    reports,   schedules,
applications,  notices,  letters and  undertakings and to incur and pay all such
fees and expenses as in their judgment  shall be necessary,  proper or desirable
to carry into  effect  the  purpose  and intent of any and all of the  foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the  Corporation  in  connection  with  the  transactions  contemplated  by  the
agreements  described herein are hereby approved,  ratified and confirmed in all
respects.

<PAGE>

                                                                    EXHIBIT G

                       FORM OF TRANSFER AGENT INSTRUCTIONS

                               [Commencement Date]

[TRANSFER AGENT]
[Address]

Attn:  __________________

Ladies and Gentlemen:

     Reference is made to that  certain  Common Stock  Purchase  Agreement  (the
"Common Stock Purchase  Agreement"),  dated as of April __, 2001, by and between
UNIGENE LABORATORIES,  INC., a Delaware corporation (the "Company"),  and FUSION
CAPITAL FUND II, LLC (together with its assigns, the "Buyer"), pursuant to which
the Company may sell to the Buyer up to Twenty One Million Dollars ($21,000,000)
of the Company's  common stock,  par value $___ per share (the "Common  Stock").
The shares of Common Stock to be purchased thereunder are referred to herein as,
the  "Purchase  Shares."  In  addition,  the  Company  has issued to the Buyer a
warrant  (the  "Warrant")  granting  the Buyer the  right to  purchase  from the
Company  1,000,000  shares of Common Stock (the "Warrant  Shares").  This letter
shall serve as our irrevocable authorization and direction to you (provided that
you are the  transfer  agent of the Company at such time) to issue the  Purchase
Shares  to the  Buyer  from time to time  upon  surrender  to you of a  properly
completed  and duly executed  Purchase  Notice,  in the form attached  hereto as
Exhibit I, and a Company  Confirmation of Purchase Notice,  in the form attached
hereto  as  Exhibit  II.  This  letter  shall  also  serve  as  our  irrevocable
authorization  and direction to you (provided that you are the transfer agent of
the Company at such time) to issue the Warrant  Shares to the Buyer from time to
time upon  surrender to you of a properly  completed and duly  executed  Warrant
Exercise  Notice,  in the form  attached  hereto as  Exhibit  IV,  and a Company
Confirmation of Warrant Exercise Notice,  in the form attached hereto as Exhibit
V.

     Specifically,  upon receipt by the Company of a copy of a Purchase  Notice,
the  Company  shall as soon as  practicable,  but in no event later than one (1)
Trading Day (as defined below) after receipt of such Purchase Notice,  send, via
facsimile,  a Company  Confirmation  of Purchase Notice to the Buyer and to you,
which confirmation shall constitute an irrevocable instruction to you to process
such Purchase Notice in accordance with the terms of these  instructions and the
Company  Confirmation  of Purchase  Notice.  Upon your  receipt of a copy of the
executed  Purchase Notice and a copy of the applicable  Company  Confirmation of
Purchase Notice,  you shall use your best efforts to, within one (1) Trading Day
following the date of receipt of the Company  Confirmation  of Purchase  Notice,
(A) issue and  surrender  to a common  carrier  for  overnight  delivery  to the
address as specified in the Purchase  Notice,  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  as set forth in the Company  Confirmation  of
Purchase Notice or (B) provided you are  participating  in The Depository  Trust
Company ("DTC") Fast Automated Securities Transfer Program,  upon the request of
the Buyer,  credit such aggregate  number of shares of Common Stock to which the
Buyer shall be entitled to the Buyer's or its  designee's  balance  account with
DTC through its Deposit  Withdrawal At Custodian  ("DWAC")  system  provided the
Buyer causes its bank or broker to initiate the DWAC transaction. ("Trading Day"
shall mean any day on which the Nasdaq Market is open for customary trading.)

<PAGE>

     Specifically in regard to Warrant Shares,  upon receipt by the Company of a
copy of a Warrant Exercise Notice, the Company shall as soon as practicable, but
in no event  later  than one (1)  Trading  Day  after  receipt  of such  Warrant
Exercise Notice, send, via facsimile, a Company Confirmation of Warrant Exercise
Notice  to  the  Buyer  and to  you,  which  confirmation  shall  constitute  an
irrevocable  instruction  to you to  process  such  Warrant  Exercise  Notice in
accordance with the terms of these instructions and the Company  Confirmation of
Warrant  Exercise  Notice.  Upon your receipt of a copy of the executed  Warrant
Exercise  Notice and a copy of the applicable  Company  Confirmation  of Warrant
Exercise Notice,  you shall use your best efforts to, within one (1) Trading Day
following the date of receipt of the Company  Confirmation  of Warrant  Exercise
Notice,  (A) issue and surrender to a common  carrier for overnight  delivery to
the  address  as  specified  in the  Warrant  Exercise  Notice,  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 as set forth in the Company
Confirmation  of  Purchase  Notice  or  (B)  provided  that  (1) a  registration
statement  is  available  for the  sale of the  Warrant  Shares  at the  time of
issuance of the respective  Warrant Shares and (2) you are  participating in The
DTC Fast Automated  Securities Transfer Program,  upon the request of the Buyer,
credit such aggregate  number of shares of Common Stock to which the Buyer shall
be entitled to the Buyer's or its  designee's  balance  account with DTC through
its DWAC system  provided  the Buyer  causes its bank or broker to initiate  the
DWAC transaction.

     The  Company  hereby  confirms  to you  and  the  Buyer  that  certificates
representing  the Purchase  Shares and Warrant  Shares shall not bear any legend
restricting transfer of the Purchase Shares thereby and should not be subject to
any stop-transfer restrictions and shall otherwise be freely transferable on the
books and records of the Company  provided that the Company counsel delivers the
Notice of Effectiveness  set forth in Exhibit III attached  hereto,  and that if
the  Purchase  Shares or Warrant  Shares are not  registered  for sale under the
Securities  Act of 1933,  as amended,  then the  certificates  for the  Purchase
Shares or Warrant Shares shall bear the following legend:

  "THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED
  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED,  OR  APPLICABLE  STATE
  SECURITIES  LAWS. THE SECURITIES  HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
  NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
  EFFECTIVE  REGISTRATION  STATEMENT FOR THE SECURITIES  UNDER THE SECURITIES
  ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION
  OF  COUNSEL,  IN  A  FORM  REASONABLY   ACCEPTABLE  TO  THE  COMPANY,  THAT
  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE  STATE SECURITIES
  LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT."

     The Company hereby confirms to you and the Buyer that no instructions other
than as contemplated  herein will be given to you by the Company with respect to
the Purchase Shares or Warrant Shares.

     Please  be  advised  that the  Buyer is  relying  upon  this  letter  as an
inducement  to purchase  shares of Common Stock under the Common Stock  Purchase
Agreement  and,  accordingly,  the Buyer is a third party  beneficiary  to these
instructions.

     Should you have any questions concerning this matter,  please contact me at
(___) ___-____.

<PAGE>

                                        Very truly yours,
                                        _______
                                        By:__________________________
                                        Name: _______________________
                                        Its:  _______________________

ACKNOWLEDGED AND AGREED:
[TRANSFER AGENT]
By:
Name:
Title
Date:

cc:  FUSION CAPITAL FUND II, LLC

<PAGE>

                                    EXHIBIT I
                         TO TRANSFER AGENT INSTRUCTIONS

                             FORM OF PURCHASE NOTICE

See attached.

[Attach Exhibit A to Common Stock Purchase Agreement.]

<PAGE>

                                   EXHIBIT II
                         TO TRANSFER AGENT INSTRUCTIONS

                 FORM OF COMPANY CONFIRMATION OF PURCHASE NOTICE

See attached.

[Attach Exhibit B to Common Stock Purchase Agreement.]

<PAGE>

                                   EXHIBIT III
                         TO TRANSFER AGENT INSTRUCTIONS
                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Date]

[TRANSFER AGENT]

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

Re: [__________]

Ladies and Gentlemen:

     We are counsel to UNIGENE  LABORATORIES,  INC., a Delaware corporation (the
"Company"),  and have  represented  the Company in connection  with that certain
Common Stock Purchase Agreement (the "Purchase  Agreement")  entered into by and
among the Company and Fusion  Capital  Fund II, LLC (the  "Holder")  pursuant to
which the  Company  has agreed to issue to the  Holder up to Twenty One  Million
Dollars  ($21,000,000)  of the Company's Common Stock, par value $0.01 per share
(the "Common  Stock") (the "Purchase  Shares"),  in accordance with the terms of
the  Purchase  Agreement,  and (ii) the Company  issued to the Holder  2,000,000
shares of Common Stock (the "Commitment  Shares").  Pursuant to the Common Stock
Purchase Agreement,  the Company also has agreed to issue to the Buyer a warrant
(the  "Warrant")  granting  the  Buyer the right to  purchase  from the  Company
1,000,000  shares  of Common  Stock  (the  "Warrant  Shares").  Pursuant  to the
Purchase  Agreement,  the Company  also has entered into a  Registration  Rights
Agreement  with the Holder (the  "Registration  Rights  Agreement")  pursuant to
which the Company agreed,  among other things,  to register the Purchase Shares,
the Warrant Shares and the  Commitment  Shares under the Securities Act of 1933,
as amended (the "1933 Act"). In connection with the Company's  obligations under
the Purchase Agreement and the Registration Rights Agreement,  on _____________,
the Company filed a Registration  Statement  (File No.  333-_____________)  (the
"Registration  Statement")  with the  Securities  and Exchange  Commission  (the
"SEC") relating to the sale of the Purchase  Shares,  the Warrant Shares and the
Commitment Shares.

     In connection with the foregoing,  we advise you that a member of the SEC's
staff has advised us 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 Purchase  Shares,
the Warrant  Shares and the  Commitment  Shares are available for sale under the
1933 Act pursuant to the Registration Statement.

     The  Buyer has  confirmed  it shall  comply  with all  securities  laws and
regulations   applicable  to  it  including   applicable   prospectus   delivery
requirements  upon sale of the  Commitment  Shares,  the  Warrant  Shares or the
Purchase Shares.

                                Very truly yours,
                                [Company Counsel]
                                By:____________________

cc: Fusion Capital Fund II, LLC

<PAGE>

                                   EXHIBIT IV
                         TO TRANSFER AGENT INSTRUCTIONS

                              WARRANT EXERCISE FORM

                                                  Date:_____________

Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, New Jersey 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>

                                    EXHIBIT V
                         TO TRANSFER AGENT INSTRUCTIONS

                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>

                                    EXHIBIT H

                         FORM OF SECRETARY'S CERTIFICATE

     This Secretary's Certificate ("Certificate") is being delivered pursuant to
Section  7(k) of that  certain  Common  Stock  Purchase  Agreement  dated  as of
__________,  2001 ("Common Stock Purchase  Agreement"),  by and between  UNIGENE
LABORATORIES,  INC., a Delaware  corporation  (the "Company") and FUSION CAPITAL
FUND II, LLC (the "Buyer"),  pursuant to which the Company may sell to the Buyer
up to Twenty One Million Dollars  ($21,000,000)  of the Company's  Common Stock,
par value  $.01 per share  (the  "Common  Stock").  Terms  used  herein  and not
otherwise  defined shall have the meanings  ascribed to them in the Common Stock
Purchase Agreement.

The  undersigned,  ____________,  Secretary of the Company,  hereby certifies as
follows:

          1. I am the Secretary of the Company and make the statements contained
     in this Secretary's Certificate.

          2.  Attached  hereto as Exhibit A and Exhibit B are true,  correct and
     complete  copies of the Company's  bylaws  ("Bylaws")  and  Certificate  of
     Incorporation  ("Articles"),  in each  case,  as amended  through  the date
     hereof,  and no  action  has been  taken  by the  Company,  its  directors,
     officers or  shareholders,  in  contemplation  of the filing of any further
     amendment relating to or affecting the Bylaws or Articles.

          3. Attached hereto as Exhibit C are true,  correct and complete copies
     of the resolutions duly adopted by the Board of Directors of the Company on
     _____________,  at which a quorum was present and acting  throughout.  Such
     resolutions have not been amended, modified or rescinded and remain in full
     force and effect and such resolutions are the only  resolutions  adopted by
     the  Company's  Board  of  Directors,  or  any  committee  thereof,  or the
     shareholders of the Company  relating to or affecting (i) the entering into
     and  performance of the Common Stock Purchase  Agreement,  or the issuance,
     offering and sale of the Purchase Shares and the Commitment Shares and (ii)
     and the performance of the Company of its obligation  under the Transaction
     Documents as contemplated therein.

          4. As of the date hereof, the authorized,  issued and reserved capital
     stock of the Company is as set forth on Exhibit D hereto.

<PAGE>

     IN  WITNESS  WHEREOF,  I have  hereunder  signed my name on this ___ day of
____________.

                            -------------------------
                                    Secretary

     The  undersigned as ___________ of UNIGENE  LABORATORIES,  INC., a Delaware
corporation,  hereby certifies that ____________ is the duly elected, appointed,
qualified and acting  Secretary of _________,  and that the signature  appearing
above is his genuine signature.

                                       -----------------------------------EXHIBIT 10.36

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of April 23,
2001, by and between UNIGENE  LABORATORIES,  INC. a Delaware  corporation,  (the
"Company"), and FUSION CAPITAL FUND II, LLC (together with it permitted assigns,
the "Buyer").  Capitalized  terms used herein and not otherwise  defined  herein
shall  have the  respective  meanings  set forth in the  Common  Stock  Purchase
Agreement  by and  between  the  parties  hereto dated as of April 23,  2001 (as
amended,  restated,  supplemented  or otherwise  modified from time to time, the
"Purchase Agreement").

                                    WHEREAS:

         A. The Company has agreed, upon the terms and subject to the conditions
of the  Purchase  Agreement,  to issue to the  Buyer up to  Twenty  One  Million
Dollars  ($21,000,000)  of the Company's  common stock, par value $.01 per share
(the "Common Stock") (the "Purchase Shares") and

         B. In connecton with the Purchase Agreement,  the Company has issued to
the Buyer (i) 2,000,000 shares of its Common Stock (the "Commitment Shares") and
(ii) a common  stock  purchase  warrant (the  "Warrant")  granting the Buyer the
right to  purchase  from the  Company  1,000,000  shares  of Common  Stock  (the
"Warrant Shares"); and

         C. To  induce  the  Buyer to enter  into the  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 the
Buyer hereby agree as follows:

         1.       DEFINITIONS.
                  -----------

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

         a. "Investor"  means the Buyer,  any transferee or assignee  thereof to
whom a Buyer  assigns its rights under this  Agreement  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  assigns its
rights under this  Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 9.

         b. "Person"  means any person or entity  including any  corporation,  a
limited liability company,  an association,  a partnership,  an organization,  a
business,  an individual,  a governmental or political  subdivision thereof or a
governmental agency.

<PAGE>

         c. "Register," "registered," and "registration" refer to a registration
effected by  preparing  and filing one or more  registration  statements  of the
Company in compliance  with the 1933 Act and pursuant to Rule 415 under the 1933
Act or any  successor  rule  providing  for offering  securities on a continuous
basis ("Rule 415"),  and the  declaration or ordering of  effectiveness  of such
registration   statement(s)  by  the  United  States   Securities  and  Exchange
Commission (the "SEC").

         d.  "Registrable  Securities"  means (1) the Purchase Shares which have
been, or which may from time to time be,  issued or issuable  upon  purchases of
the  Available  Amount  under  the  Purchase  Agreement  (without  regard to any
limitation or restriction on purchases), (2) the Warrant Shares which have been,
or which may,  from time to time,  be issued or  issuable  upon  exercise of the
Warrant  (without regard to any limitation or restriction on exercise),  and (3)
the Commitment Shares issued to the Investor at or prior to the Commencement and
any shares of capital  stock  issued or issuable  with  respect to the  Purchase
Shares, the Warrant, the Commitment Shares or the Purchase Agreement as a result
of any stock split, stock dividend, recapitalization,  exchange or similar event
or otherwise,  without regard to any limitation on purchases  under the Purchase
Agreement or under the Warrant.

         e.  "Registration  Statement" means the  registration  statement of the
Company  which the  Company has agreed to file  pursuant to Section  4(a) of the
Purchase Agreement with respect to the sale of the Registrable Securities.

         2.       REGISTRATION.

         a. Mandatory  Registration.  The Company shall use best efforts to keep
the Registration  Statement effective pursuant to Rule 415 promulgated under the
1933 Act and  available  for sales of all of the  Registrable  Securities at all
times until the earlier of (i) the date as of which the Investor may sell all of
the  Registrable   Securities  without  restriction   pursuant  to  Rule  144(k)
promulgated under the 1933 Act (or successor  thereto) or (ii) the date on which
(A) the Investor shall have sold all the Registrable Securities and no Available
Amount remains under the Purchase  Agreement (the  "Registration  Period").  The
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 light of the circumstances in which
they were made, not misleading.

         b. Rule 424  Prospectus.  The Company shall,  as required by applicable
securities  regulations,  from time to time file with the SEC,  pursuant to Rule
424 promulgated  under the 1933 Act, the prospectus and prospectus  supplements,
if any, to be used in connection with sales of the Registrable  Securities under
the Registration Statement. The Investor and its counsel shall have a reasonable
opportunity to review and comment upon such prospectus  prior to its filing with
the SEC. The Investor shall use its reasonable best efforts to comment upon such
prospectus  within one (1) Trading Day from the date the  Investor  receives the
final version of such prospectus.

<PAGE>

         c. Sufficient Number of Shares  Registered.  In the event the number of
shares available under the  Registration  Statement is insufficient to cover all
of  the  Registrable  Securities,  the  Company  shall  amend  the  Registration
Statement or file a new registration statement (a "New Registration Statement"),
so as to cover all of such Registrable Securities as soon as practicable, but in
any event not later  than ten (10)  Trading  Days after the  necessity  therefor
arises. The Company shall use it best efforts to cause such amendment and/or New
Registration  Statement to become effective as soon as practicable following the
filing thereof. The Investor and its counsel shall have a reasonable opportunity
to review and comment upon any such amendment and/or New Registration  Statement
prior to its filing with the SEC. The  Investor  shall use its  reasonable  best
efforts to comment upon any such  amendment  and/or New  Registration  Statement
within  two (2)  Trading  Days  from the date the  Investor  receives  the final
version of any such amendment and/or New Registration Statement.

         3.       RELATED OBLIGATIONS.

         With respect to the Registration Statement and whenever any Registrable
Securities  are to be  registered  pursuant  to Section 2  including  on any New
Registration  Statement,  the Company shall use its  reasonable  best efforts to
effect the  registration  of the  Registrable  Securities in accordance with the
intended method of disposition thereof and, pursuant thereto,  the Company shall
have the following obligations:

         a. The  Company  shall  prepare  and file with the SEC such  amendments
(including  post-effective  amendments)  and  supplements  to  any  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 the  Registration  Statement or
any New  Registration  Statement  effective at all times during the Registration
Period, 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 the Registration  Statement or any New 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.

         b. The Company shall permit the Investor to review and comment upon the
Registration  Statement or any New Registration Statement and all amendments and
supplements thereto at least two (2) Trading Days prior to their filing with the
SEC, and not file any document in a form to which Investor  reasonably  objects.
The  Investor  shall  use its  reasonable  best  efforts  to  comment  upon  the
Registration  Statement or any New Registration  Statement and any amendments or
supplements  thereto  within  two (2)  Trading  Days from the date the  Investor
receives the final version  thereof.  The Company shall furnish to the Investor,
without  charge any  correspondence  from the SEC or the staff of the SEC to the
Company or its representatives relating to the Registration Statement or any New
Registration Statement.

<PAGE>

         c. The Company shall furnish to the  Investor,  (i) promptly  after the
same is prepared and filed with the SEC, at least one copy of such  registration
statement and any  amendment(s)  thereto,  including  financial  statements  and
schedules,  all  documents  incorporated  therein by reference and all exhibits,
(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 the  Investor  may
reasonably  request)  and (iii) such other  documents,  including  copies of any
preliminary or final  prospectus,  as the Investor may  reasonably  request from
time  to  time  in  order  to  facilitate  the  disposition  of the  Registrable
Securities owned by the Investor.

         d. The Company  shall use  reasonable  best efforts to (i) register and
qualify the  Registrable  Securities  covered by a registration  statement under
such other  securities  or "blue sky" laws of such  jurisdictions  in the United
States as the  Investor  reasonably  requests,  (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  where it would not
otherwise be required to qualify but for this Section 3(d),  (y) subject  itself
to general taxation in any such  jurisdiction,  or (z) file a general consent to
service of process in any such  jurisdiction.  The Company shall promptly notify
the Investor who holds  Registrable  Securities of the receipt by the 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.

         e. As promptly as  practicable  after  becoming  aware of such event or
facts,  the Company shall notify the Investor in writing of the happening of any
event or existence of such facts as a result of which the prospectus included in
any registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements  therein,  in light of the circumstances  under
which they were made,  not  misleading,  and promptly  prepare a  supplement  or
amendment to such  registration  statement  to correct such untrue  statement or
omission,  and deliver ten (10) copies of such  supplement  or  amendment to the
Investor  (or such  other  number  of  copies  as the  Investor  may  reasonably
request).  The Company  shall also  promptly  notify the 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
the Investor by facsimile on the same day of such effectiveness and by overnight
mail),  (ii) of any  request by the SEC for  amendments  or  supplements  to any
registration  statement or related prospectus or related information,  and (iii)
of the Company's reasonable  determination that a post-effective  amendment to a
registration statement would be appropriate.

         f. The Company  shall use its  reasonable  best  efforts to prevent the
issuance  of  any  stop  order  or  other  suspension  of  effectiveness  of any
registration   statement,   or  the  suspension  of  the  qualification  of  any
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 at
the earliest  possible moment and to notify the Investor 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.

<PAGE>

         g. The Company  shall (i) cause all the  Registrable  Securities  to be
listed on each securities  exchange or trading system 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 the  Registrable
Securities on the Principal Market.  The Company shall pay all fees and expenses
in connection with satisfying its obligation under this Section.

         h. The Company  shall  cooperate  with the Investor to  facilitate  the
timely  preparation  and delivery of  certificates  (not bearing any restrictive
legend)  representing  the Registrable  Securities to be offered pursuant to any
registration  statement and enable such certificates to be in such denominations
or amounts as the Investor may  reasonably  request and registered in such names
as the Investor may request.

         i.  The  Company  shall at all  times  provide  a  transfer  agent  and
registrar with respect to its Common Stock.

         j. If  reasonably  requested  by the  Investor,  the Company  shall (i)
immediately  incorporate in a prospectus supplement or post-effective  amendment
such information as the Investor believes should 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 sold,  the purchase  price being paid  therefor and any other terms of the
offering of the Registrable  Securities;  (ii) make all required filings of such
prospectus  supplement  or  post-effective  amendment as soon as notified of the
matters to be  incorporated  in such  prospectus  supplement  or  post-effective
amendment;   and  (iii)  supplement  or  make  amendments  to  any  registration
statement.

         k. The  Company  shall use its  reasonable  best  efforts  to cause the
Registrable  Securities  covered by any registration  statement to be registered
with or approved by such other  governmental  agencies or  authorities as may be
necessary to consummate the disposition of such Registrable Securities.

         l. Within one (1) Trading Day after any  registration  statement  which
includes the Registrable Securities is ordered 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 Investor)
confirmation that such registration statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

         m. The  Company  shall  take all other  reasonable  actions  reasonably
requested by the Investor to expedite and facilitate disposition by the Investor
of Registrable Securities pursuant to any registration statement.

         4.       OBLIGATIONS OF THE INVESTOR.

         a. The Company shall notify the Investor in writing of the  information
the  Company  reasonably  requires  from the  Investor  in  connection  with any
registration statement hereunder. The 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 the registration of such Registrable Securities
and shall execute such  documents in connection  with such  registration  as the
Company may reasonably request.

<PAGE>

         b. The  Investor  agrees to  cooperate  with the Company as  reasonably
requested by the Company in connection  with the  preparation  and filing of any
registration statement hereunder.

         c. The  Investor  agrees  that,  upon  receipt of any  notice  from the
Company  of the  happening  of any  event  or  existence  of  facts  of the kind
described  in Section  3(f) or the first  sentence of 3(e),  the  Investor  will
immediately  discontinue  disposition of Registrable  Securities pursuant to any
registration   statement(s)  covering  such  Registrable  Securities  until  the
Investor's  receipt of the  copies of the  supplemented  or  amended  prospectus
contemplated  by Section  3(f) or the first  sentence  of 3(e).  Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to promptly
deliver shares of Common Stock without any restrictive legend in accordance with
the terms of the Purchase  Agreement in connection  with any sale of Registrable
Securities  with  respect to which an Investor  has entered  into a contract for
sale  prior to the  Investor's  receipt  of a notice  from  the  Company  of the
happening  of any  event of the kind  described  in  Section  3(f) or the  first
sentence of 3(e) and for which the Investor has not yet settled.

         5.       EXPENSES OF REGISTRATION.

         All reasonable expenses,  other than sales or brokerage commissions and
legal fees and disbursements of counsel to the Investor,  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.

         6.       INDEMNIFICATION

<PAGE>

         a. To the fullest  extent  permitted  by law,  the Company  shall,  and
hereby does, indemnify,  hold harmless and defend the Investor,  each Person, if
any, who controls the Investor, the members, the directors,  officers, partners,
employees, agents,  representatives of the Investor and each Person, if any, who
controls  the  Investor  within the  meaning  of the 1933 Act or the  Securities
Exchange  Act of 1934,  as  amended  (the "1934  Act")  (each,  an  "Indemnified
Person"), against any losses, claims, damages,  liabilities,  judgments,  fines,
penalties,  charges,  costs,  attorneys'  fees,  amounts paid in  settlement  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,  whether or not an indemnified party is or may be
a party thereto ("Indemnified Damages"), to which any of them may become subject
insofar  as such  Claims  (or  actions  or  proceedings,  whether  commenced  or
threatened,  in respect  thereof) arise out of or are based upon: (i) any untrue
statement or alleged  untrue  statement of a material  fact in the  Registration
Statement,  any  New  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 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 the  Registration  Statement  or any  New  Registration
Statement or (iv) any material  violation of this  Agreement (the matters in the
foregoing  clauses (i)  through  (iv) being,  collectively,  "Violations").  The
Company shall, subject to Section 6(d) reimburse each Indemnified Person for any
legal fees or other  expenses  reasonably  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 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
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement,  any New  Registration  Statement  or any such  amendment  thereof or
supplement  thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) or Section 3(e);  (ii) with respect to any  preliminary
prospectus,  shall not inure to the benefit of any Indemnified  Person from whom
the person  asserting a Claim  purchased  the  Registrable  Securities  that are
offered for sale by the preliminary  prospectus (or to the benefit of any person
controlling  such person) if the untrue  statement or omission of material  fact
contained in the preliminary prospectus was corrected in the prospectus, as then
amended or  supplemented,  if such  prospectus  was timely made available by the
Company pursuant to Section 3(c) or Section 3(e), and the Indemnified Person was
promptly advised in writing not to use the incorrect prospectus prior to the use
giving rise to a violation and such  Indemnified  Person,  notwithstanding  such
advice,  used it; (iii) shall not be available to the extent such Claim is based
on a  failure  of the  Investor  to  deliver  or to  cause to be  delivered  the
prospectus  made  available by the Company,  if such  prospectus was timely made
available  by the Company  pursuant to Section  3(c) or Section  3(e);  and (iv)
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.  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
Investor pursuant to Section 9.

<PAGE>

         b.  In  connection   with  the   Registration   Statement  or  any  New
Registration  Statement,  the Investor shall, and hereby does,  indemnify,  hold
harmless  and defend,  to the same extent and in the same manner as is set forth
in Section 6(a), the Company,  each of its  directors,  each of its officers who
signs the Registration Statement or any New Registration Statement, each Person,
if any, who controls the Company  within the meaning of the 1933 Act or the 1934
Act  (collectively  and together with an  Indemnified  Person,  an  "Indemnified
Party"),  against  any  Claim or  Indemnified  Damages  to which any of them may
become subject,  under the 1933 Act, the 1934 Act or otherwise,  insofar as such
Claim or Indemnified  Damages arise out of or are based upon any  Violation,  in
each case 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 the Investor  expressly for use in connection with such  registration
statement;  and,  subject to Section 6(d), the Investor will reimburse any legal
or other expenses  reasonably  incurred by them 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 if such  settlement is effected  without the prior written  consent of the
Investor, which consent shall not be unreasonably withheld;  provided,  further,
however, that the 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
the Investor as a result of the sale of Registrable  Securities pursuant to such
registration  statement.  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 Investor
pursuant to Section 9.

         c. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the  commencement  of any action or proceeding
(including  any  governmental  action or  proceeding)  involving  a Claim,  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, deliver to the
indemnifying  party  a  written  notice  of the  commencement  thereof,  and 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  an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying  party, if, in
the  reasonable  opinion of counsel  retained  by the  indemnifying  party,  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.  The  Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection  with any  negotiation  or defense of any such action or claim 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.  The  indemnifying  party  shall  keep  the
Indemnified  Party or  Indemnified  Person fully 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 or
proceeding  effected without its written consent,  provided,  however,  that the
indemnifying  party shall not  unreasonably  withhold,  delay or  condition  its
consent.  No  indemnifying  party shall,  without the 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 or
litigation.   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 prejudiced in its ability to
defend such action.

         d. 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.

<PAGE>

         e. 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.

         7.       CONTRIBUTION.

         To  the  extent  any   indemnification  by  an  indemnifying  party  is
prohibited or limited by law, the indemnifying  party agrees to 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 seller of Registrable  Securities guilty of fraudulent  misrepresentation
(within  the  meaning of Section  11(f) of the 1933 Act)  shall be  entitled  to
contribution  from any seller of  Registrable  Securities  who was not guilty of
fraudulent misrepresentation; and (ii) 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.

         8.       REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS.

         With a view to making  available  to the  Investor 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  Investor  to sell  the  Registrable
Securities to the public without  registration  ("Rule 144"), the Company agrees
to:

         a.  make and keep  public  information  available,  as those  terms are
understood and defined in Rule 144;

         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

         c.  furnish to the Investor so long as the  Investor  owns  Registrable
Securities,  promptly upon request,  (i) a written statement by the Company that
it has complied with the reporting and or disclosure provisions of Rule 144, 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  Investor  to sell  such  securities  pursuant  to Rule 144  without
registration.

         9.       ASSIGNMENT OF REGISTRATION RIGHTS.

<PAGE>

         The  Company  shall  not  assign  this   Agreement  or  any  rights  or
obligations  hereunder  without  the  prior  written  consent  of the  Investor,
including  by merger or  consolidation.  The  Investor may not assign its rights
under this Agreement  without the written consent of the Company,  other than to
an  affiliate  of the  Investor  controlled  by  Steven  G.  Martin or Joshua B.
Scheinfeld.

         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 Investor.

         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
registered owner of such Registrable Securities.

         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 (1) 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:        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 Investor:
                  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

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,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  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.

         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.

<PAGE>

         d. Except for the corporate  laws of the State of Delaware  which shall
govern  all  issues  concerning  the  relative  rights  of the  Company  and its
stockholders,  all questions concerning the construction,  validity, enforcement
and  interpretation  of this Agreement 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  the City of
Chicago, 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,  and the Purchase  Agreement  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 and the
Purchase Agreement  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.

         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 the 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.

<PAGE>

         j.  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.

         k. 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.

                                   * * * * * *

<PAGE>

         IN WITNESS WHEREOF,  the parties have caused this  Registration  Rights
Agreement to be duly executed as of day and year first above written.

                                  THE COMPANY:

                                  UNIGENE LABORATORIES, INC.

                                  By:_______________________
                                  Name:
                                  Title:

                                  BUYER:

                                  FUSION CAPITAL FUND II, LLC
                                  BY: FUSION CAPITAL PARTNERS, LLC
                                  BY: SGM HOLDINGS CORP.

                                  By:_______________________
                                  Name: Steven G. Martin
                                  Title: President

<PAGE>

                                    EXHIBIT A

                        TO REGISTRATION RIGHTS AGREEMENT

                         FORM OF NOTICE OF EFFECTIVENESS

                            OF REGISTRATION STATEMENT

[Date]

[TRANSFER AGENT]

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

Re: [__________]

Ladies and Gentlemen:

         We are counsel to UNIGENE  LABORATORIES,  INC., a Delaware  corporation
(the  "Company"),  and have  represented  the  Company in  connection  with that
certain Common Stock Purchase Agreement (the "Purchase  Agreement") entered into
by and among the Company and Fusion Capital Fund II, LLC (the "Holder") pursuant
to which the  Company has agreed to issue to the Holder up to Twenty One Million
Dollars  ($21,000,000)  of the Company's Common Stock, par value $0.01 per share
(the "Common  Stock") (the "Purchase  Shares"),  in accordance with the terms of
the  Purchase  Agreement,  and (ii) the Company  issued to the Holder  2,000,000
shares of Common Stock (the "Commitment  Shares").  Pursuant to the Common Stock
Purchase  Agreement,  the  Company  also has issued to the Buyer a warrant  (the
"Warrant")  granting the Buyer the right to purchase from the Company  1,000,000
shares  of  Common  Stock  (the  "Warrant  Shares").  Pursuant  to the  Purchase
Agreement,  the Company also has entered into a  Registration  Rights  Agreement
with the Holder  (the  "Registration  Rights  Agreement")  pursuant to which the
Company agreed, among other things, to register the Purchase Shares, the Warrant
Shares and the  Commitment  Shares under the  Securities Act of 1933, as amended
(the  "1933  Act").  In  connection  with the  Company's  obligations  under the
Purchase Agreement and the Registration Rights Agreement, on _____________,  the
Company  filed  a  Registration  Statement  (File  No.  333-_____________)  (the
"Registration  Statement")  with the  Securities  and Exchange  Commission  (the
"SEC") relating to the sale of the Purchase  Shares,  the Warrant Shares and the
Commitment Shares.

         In connection  with the  foregoing,  we advise you that a member of the
SEC's  staff has  advised  us 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 Purchase  Shares,
the Warrant  Shares and the  Commitment  Shares are available for sale under the
1933 Act pursuant to the Registration Statement.

         The Buyer has  confirmed it shall comply with all  securities  laws and
regulations   applicable  to  it  including   applicable   prospectus   delivery
requirements  upon sale of the  Commitment  Shares,  the  Warrant  Shares or the
Purchase Shares.

                                               Very truly yours,
                                               [Company Counsel]

                                               By:____________________

cc:       Fusion Capital Fund II, LLC

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}]]