Document:

EXHIBIT 10.37

               FIRST AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT

         THIS  FIRST   AMENDMENT  TO  COMMON  STOCK   PURCHASE   AGREEMENT  (the
"Amendment"),  dated as of March 30, 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 shall have the meanings  given them in
the Common Stock Purchase Agreement.

         WHEREAS,  the  parties  hereto are parties to a Common  Stock  Purchase
Agreement dated as of December 18, 2000 (the "Common Stock Purchase Agreement");

         WHEREAS, pursuant to the Common Stock Purchase Agreement, the Buyer has
agreed to purchase,  and the Company has agreed to sell up to $21,000,000 of the
Common Stock all in accordance with the terms and conditions of the Common Stock
Purchase Agreement;

         WHEREAS,  pursuant to the Common Stock Purchase Agreement the Buyer has
the right to terminate the Common Stock Purchase Agreement on March 31, 2001 and
the Company and the Buyer desire to extend such date as provided herein;

         WHEREAS, pursuant to the Common Stock Purchase Agreement the Company is
required to issue certain Commitment Shares to the Buyer and the Company and the
Buyer desire to reduce the amount of  Commitment  Shares  otherwise  owed to the
Buyer and in lieu  thereof  issue to the Buyer a warrant to  purchase  shares of
Common Stock in accordance with the terms hereof.

         NOW,  THEREFORE,  in  consideration  of the  agreements,  covenants and
     considerations contained herein, the parties hereto agree as follows:

1.       Amendments.

          a.   Section  2 of the  Common  Stock  Purchase  Agreement  is  hereby
               amended  and  restated  by adding the words "the  Warrant and the
               Warrant Shares"  immediately after the words "Commitment  Shares"
               in each instance the words "Commitment  Shares" appear in Section
               2 of the Common Stock Purchase Agreement.

          b.   Section  2(a) of the Common  Stock  Purchase  Agreement is hereby
               amended and restated by deleting the reference  "Section 7(b)" in
               the second line of such Section and  replacing  it with  "Section
               4(f)".

          c.   Section  3(b) of the Common  Stock  Purchase  Agreement is hereby
               amended and restated:  (i) by adding the words "the  Warrant," to
               the second line of such Section  immediately after the words "its
               obligations under this Agreement";  (ii) by adding the words "and
               the Warrant  and Warrant  Shares" to the sixth and ninth lines of
               such Section immediately after the words "the Commitment Shares";
               (iii) by adding the words "and Warrant  Shares" to the ninth line
               of  such  Section  immediately  after  the  words  "the  Purchase
               Shares";  and (iv) by adding the words "and the  Warrant"  to the
               tenth line of such Section, immediately after the words "issuable
               under this Agreement".

          d.   Clause (vi) of Section 3(c) is hereby amended and restated in its
               entirety as follows:
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               "(vi)there   are  no   securities   or   instruments   containing
               anti-dilution or similar provisions that will be triggered by the
               issuance  of the  Commitment  Shares  or the  Purchase  Shares as
               described in this Agreement or the Warrant or Warrant Shares and"

          e.   Section  3(d) of the Common  Stock  Purchase  Agreement is hereby
               amended and  restated  by: (i) adding the clause "The Warrant has
               been duly authorized and" to the beginning of such Section,  (ii)
               adding the words "and the Warrant Shares"  immediately  after the
               words  "Commitment  Shares" in the first line of such Section and
               (iii) adding the words "and thereof"  immediately  after the word
               "hereof" in the second line of such Section.

          f.   Section  3(j) of the Common  Stock  Purchase  Agreement is hereby
               amended  and  restated  by adding  the words  "the  Warrant,  the
               Warrant Shares"  immediately after the words "Commitment  Shares"
               to the fourth line of such Section.

          g.   Section  3(k) of the Common  Stock  Purchase  Agreement is hereby
               amended  and  restated  by adding  the words  "the  Warrant,  the
               Warrant Shares"  immediately after the words "Commitment  Shares"
               to the fourth, fifth, ninth and tenth lines of such Section.

          h.   Section  3(t) of the Common  Stock  Purchase  Agreement is hereby
               amended  and  restated  by adding  the words  "the  Warrant,  the
               Warrant Shares"  immediately after the words "Commitment  Shares"
               to the seventh and eighth lines of such Section.

          i.   The first  sentence of Section 4(a) of the Common Stock  Purchase
               Agreement is hereby amended and restated as follows:

               "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,  2,000,000 Commitment Shares and
               1,000,000 Warrant Shares.

          j.   Section  4(b) of the Common  Stock  Purchase  Agreement is hereby
               amended  and  restated  by adding the words ", the  Warrant,  the
               Warrant  Shares"  immediately  after the  words  the  "Commitment
               Shares" to each of the third and sixth lines of such Section.

          k.   Section  4(d) of the Common  Stock  Purchase  Agreement is hereby
               amended  and  restated  by  adding  the  words  "Warrant  Shares"
               immediately  after the words "Purchase  Shares" in the first line
               of such Section.

          l.   Section  4(f) of the Common  Stock  Purchase  Agreement is hereby
               amended and restated in its entirety as follows:

               "(f)  Issuance of Warrant and  Commitment  Shares/  Limitation on
               sales of Commitment  Shares.  The Company  agrees to issue to the
               Buyer on March 30,  2001,  (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").
               The Warrant shall have an exercise  price of $.50 per share,  and
               shall be  exercisable  for five (5) years  from the  Commencement
               Date. The Commitment  Shares shall be issued in certificated form
               and shall  bear the  restrictive  legend  set forth in  Exhibit G
               hereto.  The Buyer  agrees that the Buyer  shall not  transfer or
               sell the Commitment  Shares or Warrant Shares until 720 days from
               the  date of the  Agreement  or  until  this  Agreement  has been

<PAGE>

               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  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.

          m.   Section  5 of the  Common  Stock  Purchase  Agreement  is  hereby
               amended and restated in its entirety as follows:

          "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
               Commitment  Shares issued to the Buyer and the Purchase Shares to
               be issued under this  Agreement and the Warrant  Shares  issuable
               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, Warrant 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.

          n.   Section  6(b) of the Common  Stock  Purchase  Agreement is hereby
               amended and restated by adding the words "the Warrant  Shares" to
               the second line of such Section  immediately after the words "the
               Commitment Shares".

          o.   Section  7(b) of the Common  Stock  Purchase  Agreement is hereby
               amended and restated in its entirety as follows:

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

<PAGE>

          p.   Section  7(c) of the Common  Stock  Purchase  Agreement is hereby
               amended and restated by adding the words "the Warrant  Shares" to
               the  third  line of such  Section  immediately  after  the  words
               "Purchase Shares".

          q.   Section  7(l) of the Common  Stock  Purchase  Agreement is hereby
               amended and restated in its entirety as follows:

               "(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  Commitment  Shares,  Warrant  Shares  and  the
               Purchase  Shares  pursuant to this  Agreement in compliance  with
               such laws."

          r.   Section  9(d) of the Common  Stock  Purchase  Agreement is hereby
               amended and  restated by adding the clause "or Warrant  Shares to
               the Buyer  within  five (5)  Trading  Days after  delivery of the
               applicable notice" to the end of such Section.

          s.   Sections  11(k)(ii) and  11(k)(iii) of the Common Stock  Purchase
               Agreement  are hereby  amended and restated in their  entirety as
               follows:

               "(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  June 30,  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."

          t.   The term "Transaction  Documents" shall be deemed to include this
               Amendment and the Warrant for all purposes under the Common Stock
               Purchase Agreement.

          u.   Exhibit F and Exhibit G to the Common  Stock  Purchase  Agreement
               are hereby  amended and  restated  in their  entirety in the form
               attached hereto.

2.   Effect of Amendment/Incorporation of Certain Provisions.  Except as amended
     as set forth above,  the Common Stock Purchase  Agreement shall continue in
     full force and effect. The provisions set forth in Section 11 of the Common
     Stock  Purchase  Agreement are hereby  incorporated  by reference into this
     Amendment.

                                    * * * * *

<PAGE>

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

                                  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 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

                         Execution of Purchase Agreement

<PAGE>

         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,  execute  and  file  with  the
Commission all amendments,  including post-effective amendments, and

<PAGE>

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

<PAGE>

         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 December  18,  2000,  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 two (2) Trading Days
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.)

     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

<PAGE>

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  two (2)  Trading  Days  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
(___) ___-____.

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

ACKNOWLEDGED AND AGREED:
[TRANSFER AGENT]
By:

Name:
Title
Date:

cc:      FUSION CAPITAL FUND II, LLC

<PAGE>

5

                                    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 also 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:_____________

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

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   (the    undersigned)
(_________________________),  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

-------------------------
-------------------------
-------------------------
         Address

<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 December 18, 2000, as amended March 30, 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 #:
                                          --------------------------------------EXHIBIT 10.38

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March 30,
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 _______,  200__ (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 (i) 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 (ii) such number of shares of
Common Stock as is required  pursuant to Section 7(b) of the Purchase  Agreement
(the "Commitment Shares"); and

         B. The Company has issued to the Buyer 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 also 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

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