UNIGENE LABORATORIES, INC.



                         DIRECTOR STOCK OPTION AGREEMENT



     This Director Stock Option Agreement (the "Agreement") is made effective as

of this 5th day of December, 2001, by and between UNIGENE LABORATORIES, INC., a

Delaware corporation (the "Company"), and Allen Bloom, a resident of New Jersey

(the "Director").



                                   WITNESSETH:



     WHEREAS, the Company has determined to grant the Director an option to

purchase shares of the common stock, par value $.01 per share, of the Company

(the "Common Stock"); and



     WHEREAS, the Company and the Director desire to enter into this Agreement

to evidence such option.



     NOW, THEREFORE, to evidence the stock option so granted, the parties hereto

hereby agree as follows:



     1. Grant of Options. The Company hereby grants to the Director a

non-qualified stock option (the "Option") to purchase up to 150,000 shares of

Common Stock, at an option price of $.47 per share, exercisable in accordance

with the terms and conditions of this Agreement.



     2. Option Vesting. The Option shall become exercisable in installments in

accordance with the following vesting schedule:



                     Number of Shares

Installment Number    Per Installment   Date Exercisable

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

       1                    10%         December 5, 2001

       2                    30%         June 5, 2002

       3                    30%         December 5, 2002

       4                    30%         June 5, 2003



Each installment may be exercised in whole or in part on a cumulative basis, at

any time or from time to time, from and after the date such installment becomes

exercisable through and including the date immediately preceding the Expiration

Date (as defined below).



     3. Expiration. Unless terminated earlier in accordance with the terms of

this Agreement, the Option shall expire and be of no further force or effect at

midnight (New York Time) on December 4, 2011 (the "Expiration Date").



     4. Death of Director or Other Termination of Directorship.



          (a) If the Director dies or ceases to be a Director for any reason,

the Option shall be exercisable and shall terminate as follows, provided,

however, that the Option cannot be exercised after the Expiration Date:



{PAGE}



               (i) Upon termination of his service or status as a Director, as

the case may be, (other than by death or for Cause), a Director may, within

three (3) months after the date of such termination, purchase all or any part of

the shares of Common Stock which such Director was entitled to purchase under

such Option on the date of such termination.



               (ii) Upon the death of any Director while serving as a Director

or within the three-month period referred to in Section 4(a)(i) above, the

Director's estate or the person to whom such Director's rights under the Option

are transferred by Will or the laws of descent and distribution may, within one

hundred eighty (180) days after the date of such Director's death, purchase all

or any part of the shares of Common Stock which such Director was entitled to

purchase under such Option on the date of death.



               (iii) If the service of a Director is terminated by removal for

Cause, the Option shall terminate upon the giving of notice of removal to the

Director or on the termination date stated in the Option, whichever is earlier.

The term Cause shall mean removal because of fraud, disclosure of trade secrets,

activities in competition with the business of the Company, misappropriation of

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