10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Fiscal Year Ended June 30, 2010
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to

Commission File Number 001-34540

UNILIFE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	27-1049354
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

633 Lowther Road, Lewisberry, Pennsylvania	17339
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (717) 938-9323

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	The Nasdaq Stock Market, LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o     No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting company o

(Do not check if a smaller reporting company)

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

The aggregate market value of the common equity held by non-affiliates of the registrant as of December 31, 2009, the last business day of the registrant’s most recently completed second fiscal quarter was $255.8 million, computed by reference to the closing sale price of the ordinary shares of our predecessor, Unilife Medical Solutions Limited as of December 31, 2009, as reported on the Australian Securities Exchange. Our common stock was not listed in the United States as of December 31, 2009. For purposes of the foregoing calculation only, the registrant has assumed that all officers and directors of the registrant are affiliates.

As of September 15, 2010, there were 55,230,454 shares of registrant’s common stock outstanding.

UNILIFE CORPORATION

FORM 10-K
FOR THE YEAR ENDED JUNE 30, 2010

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business		4
Item 1A.	Risk Factors		19
Item 1B.	Unresolved Staff Comments		29
Item 2.	Properties		29
Item 3.	Legal Proceedings		30
Item 4.	Removed and Reserved		31
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		31
Item 6.	Selected Financial Data		40
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		40
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		49
Item 8.	Financial Statements and Supplementary Data		50
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		76
Item 9A.	Controls and Procedures		76
Item 9B.	Other Information		76
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		76
Item 11.	Executive Compensation		79
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		101
Item 13.	Certain Relationships and Related Transactions, and Director Independence		102
Item 14.	Principal Accountant Fees and Services		103
PART IV
Item 15.	Exhibits and Financial Statement Schedules		104
EX-10.45
EX-10.46
EX-10.47
EX-10.48
EX-10.49
EX-10.50
EX-23.1
EX-23.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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Presentation of Information

Unilife Corporation was incorporated in the State of Delaware on July 2, 2009. On January 27, 2010, Unilife Medical Solutions Limited, an Australian corporation (“UMSL”), completed a redomiciliation from Australia to the State of Delaware pursuant to which stockholders and option holders of UMSL exchanged their interests in UMSL for equivalent interests in Unilife Corporation, a Delaware corporation (“Unilife”) and Unilife became the parent company of UMSL and its subsidiaries. The redomiciliation was conducted by way of schemes of arrangement under Australian law. The issuance of Unilife common stock and stock options under the schemes of arrangement was exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended. The redomiciliation was approved by the Australian Federal Court, and approved by UMSL shareholders and option holders.

In connection with the redomiciliation, holders of UMSL ordinary shares or share options received one share of Unilife common stock or an option to purchase one share of Unilife common stock, for every six UMSL ordinary shares or share options, respectively, held by such holders, unless the holder elected to receive in lieu of Unilife common stock, Chess Depositary Interests of Unilife, or CDIs (each representing one-sixth of one share of Unilife common stock), in which case such holder received one CDI for every UMSL ordinary share. All share and per share amounts in this Annual Report on Form 10-K have been restated to reflect the one for six share recapitalization effected in connection with the redomiciliation.

On February 16, 2010, Unilife’s common stock began trading on the Nasdaq Global Market under the symbol “UNIS.”

References to the “Company” include Unilife Corporation and its consolidated subsidiaries, including UMSL, unless the context otherwise requires. References to “Unilife” are references solely to Unilife Corporation.

Trademarks, Trade Names and Service Marks

Unilife^®, Unitract^® and Unifill^® are registered trademarks of Unilife Corporation and its subsidiaries.

Cautionary Note Regarding Forward-Looking Information

This Annual Report on Form 10-K contains forward-looking statements. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements.

These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to our management. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K and those described from time to time in our future reports which we will file with the Securities and Exchange Commission. You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely.

Currencies

Unless indicated otherwise in this Annual Report on Form 10-K, all references to $ or dollars refer to U.S. dollars. References to A$ mean the lawful currency of the Commonwealth of Australia. References to € or euros are to the lawful currency of the European Union.

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PART I

Item 1.   Business

Overview

We are a U.S. based medical device company focused on the design, development, manufacture and supply of a proprietary range of retractable syringes. Primary target customers for our products include pharmaceutical manufacturers, suppliers of medical equipment to healthcare facilities, and distributors to patients who self-administer prescription medication. All of our syringes incorporate automatic and fully-integrated safety features which are designed to protect those at risk of needlestick injuries and other unsafe injection practices. Our main product will be the Unifill ready-to-fill syringe, which is designed to be supplied to pharmaceutical manufacturers in a form that is ready for filling with an injectable drug or vaccine. We have a strategic partnership with sanofi-aventis, a large global pharmaceutical company, pursuant to which it has paid us a 10.0 million euro exclusivity fee (exclusive licensing agreement) and has paid us 15.0 million euros and committed to pay us up to an additional 2.0 million euros to fund our industrialization program for the Unifill syringe. Upon the scheduled completion of the industrialization program, we expect to commence the supply and sale of the Unifill syringe to sanofi-aventis. We are also in discussions with other pharmaceutical companies that are seeking to obtain access to the Unifill syringe. In addition, we manufacture and market our Unitract 1mL syringes at our FDA-registered manufacturing facility in Lewisberry, Pennsylvania.

In the United States and a number of other sophisticated healthcare markets, hospitals and other healthcare facilities, as well as pharmaceutical manufacturers who supply injectable drugs and vaccines in a prefilled syringe format, are increasingly required to comply with legislation aimed at protecting healthcare workers from the risk of acquiring blood-borne diseases such as HIV and hepatitis C via needlestick injuries. Our core portfolio of safety syringe products, including the Unifill syringe and the Unitract 1mL syringes, are primarily designed for supply to pharmaceutical manufacturers and healthcare facilities which are seeking to comply with these needlestick prevention laws. We expect our products will also be used by patients who self-administer prescription medication outside of the healthcare setting. The safety features incorporated into our products include an automatic needle retraction mechanism which allows operators to control the rate of needle withdrawal directly from the body into the barrel of the syringe, as well as an independent auto-disable mechanism to prevent product tampering or re-use. The integration of these safety features within the barrel is designed to make them intuitive to use and compact in size for convenient handling and disposal.

The Unifill syringe is targeted for use by pharmaceutical manufacturers who utilize pre-filled (ready-to-fill) syringes as a preferred drug delivery device for injectable drugs and vaccines. We are aware of more than 50 drug products used within healthcare facilities, or by patients who self-administer prescription medication, that are currently available in a prefilled syringe format. We have designed the Unifill syringe for integration into the manufacturing systems currently used by target pharmaceutical customers to fill and package equivalent standard prefilled syringes. To our knowledge, our Unifill product is the only known prefilled syringe with automatic safety features which are integrated inside the glass barrel.

Pursuant to the exclusive licensing agreement, we have negotiated a list of therapeutic drugs classes including antithrombotic agents and vaccines with respect to which sanofi-aventis has the exclusive right to the product until June 2014, during which sanofi-aventis would purchase the product exclusively from us. We have retained the right to negotiate other business arrangements with additional pharmaceutical companies seeking to market the product for use within therapeutic drug classes outside of those exclusive to sanofi-aventis, or after the expiration of the exclusive license with sanofi-aventis.

We have received payments of 15.0 million euros under the industrialization agreement from October 2008 through September 2010 following the completion of designed milestones under the industrialization program. Although we have received the exclusivity fee and industrialization payments from sanofi-aventis, to date we have not received any product revenues from sales of the Unifill syringe, and our revenues in respect of this product to date consist solely of the exclusivity fee and industrialization payments. We expect to be in a position to commence the commercial supply and sale of the Unifill syringe to pharmaceutical customers upon the completion of the industrialization program. We describe our arrangements with sanofi-aventis in more detail under “Strategic

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Partnership with sanofi-aventis.” We are also aware of more than 20 other pharmaceutical companies that supply injectable drugs in a prefilled syringe format, and we have received interest in the Unifill syringe from a number of these companies.

Our Unitract 1mL syringes are designed primarily for use in healthcare facilities and by patients who self-administer prescription medication such as insulin. We have recently begun U.S. production of this syringe, which we expect to release commercially within various international territories where we have obtained regulatory clearance during 2010. During March 2010, we signed an exclusive five year agreement with Stason Pharmaceuticals, a U.S.-based pharmaceutical company, to market our Unitract 1mL syringe in Japan, China and Taiwan. Under the agreement, Stason is required to purchase a minimum of 1.0 million units of the Unitract 1mL syringe per year during the term of the contract. Other distribution agreements relating to the Unitract 1mL syringes have been signed with companies in India and Canada. We have received regulatory clearance for the marketing and sale of Unitract product variants including an insulin and tuberculin (TB) format in the United States, the European Union, Canada and Australia.

We have also filed patents for other clinical and prefilled safety syringe products that may incorporate certain aspects of our core technology for future commercialization. Our in-house team has fully designed, developed, built and validated, to the requirements of the U.S. Food and Drug Administration (FDA) and ISO 13485, the automated assembly system that we use to support production of our Unitract 1mL syringe at our FDA-registered manufacturing facility in Lewisberry, Pennsylvania. We consider our ability to design and develop highly sophisticated, innovative medical devices, and the automated assembly systems we use to manufacture them, to be a core business competency.

We also have an original equipment manufacturer relationship with B. Braun Medical, Inc., a multinational healthcare equipment company. We refer to this as our contract manufacturing business. Under our contract with B. Braun, we assemble a selection of their non-proprietary specialty syringes. We purchase the pre-manufactured syringe components from various third party suppliers. We then assemble the syringes on a build to order basis and perform the related quality inspections and then sell the assembled product to B. Braun. We ship the stock that we assemble to B. Braun for its own commercial use, in areas such as insertion into specialty procedural kits. During the year ended June 30, 2010, we recognized revenues of $2.5 million under our contact with B. Braun, which represented 22% of our total revenues during that year. The contract manufacturing business was historically operated by Integrated BioSciences, Inc. which we acquired in January 2007. We are currently concentrating substantially all of our commercial and operational efforts towards the commercialization of our proprietary range of safety syringes. We expect to complete contract manufacturing activities with B. Braun by December 2010.

Market Opportunity

The Syringe Market and the Increasing Use of Pre-Filled Syringes

According to the International Association of Safe Injection Technology, approximately 35 billion syringes are manufactured every year, half of which are used within sophisticated healthcare markets such as North America, Europe, Japan and Australia. The majority of therapeutic injections occur within healthcare facilities such as acute-care hospitals and long-term care centers. Other sectors of the global syringe market include patients who self-administer prescription medication such as insulin, government agencies which sponsor harm reduction programs, and non-government organizations which conduct vaccination programs.

Injectable drugs and vaccines have traditionally been supplied in a vial or ampoule, with the operator required to draw up a measured dose of medication into a conventional plastic syringe immediately prior to an injection. Prefilled syringes typically utilize a glass barrel and are filled by pharmaceutical manufacturers so that they are ready for use prior to shipment. While conventional syringes make up the vast majority of syringes used, prefilled syringes are becoming an increasingly popular method of drug delivery.

We are aware of more than 50 drugs and vaccines that are currently available in a prefilled syringe format from more than 20 pharmaceutical companies, and believe that a number of pipeline drugs are likely to be supplied in this format in the future. Greystone Associates, a medical and health care technology consulting firm, has estimated that approximately 2.54 billion prefilled syringes will be used globally in 2010, and that this number will increase

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significantly in the coming years. Drugs that are currently supplied in a prefilled syringe format include anti-coagulants to prevent and treat thrombosis, anti-inflammatories to treat rheumatoid arthritis, anti-infectives to treat hepatitis B and C, hematological drugs to stimulate production of red or white blood cells to treat anemia or fight infection, and vaccines which seek to prevent a range of diseases. We expect that prefilled syringes will also be increasingly used in the coming years as a drug delivery device for other therapeutic drug classes including obstetrics, oncology, osteoporosis and human growth hormone treatment.

Prefilled syringes have a number of advantages over conventional plastic syringes. First, prefilled syringes help pharmaceutical companies improve manufacturing efficiencies through the elimination of drug wastage commonly associated with the overfilling of multi-use vials. Second, healthcare workers often prefer prefilled syringes because they can facilitate a relatively fast, accurate and convenient administration of a drug. Furthermore, a pre-measured dose of an injectable drug in a prefilled syringe can help reduce the risk of dosing errors. Finally, the relative ease-of-use by patients of prefilled syringes also makes them suitable for the self-administration of many types of prescription medication.

Increased Focus on Prevention of Needlestick Injuries

The World Health Organization estimates that 1.3 million people die each year as a result of unsafe injection practices, which can include syringe re-use and needlestick injuries. Unsafe injection practices can result in the transmission of a number of blood-borne diseases such as HIV/AIDS and hepatitis C. The U.S. Centers for Disease Control and Prevention estimates that 385,000 needlestick and other sharps-related injuries are sustained by U.S. hospital-based healthcare personnel each year. The U.S. Occupational Safety and Health Administration, or OSHA, estimates that when other secondary healthcare settings are also taken into account, there are as many as 800,000 needlestick injuries to U.S. healthcare workers each year. To help minimize the transmission of blood-borne pathogens caused by unsafe injection practices, many international healthcare and pharmaceutical markets are transitioning to the mandatory use of safety syringes.

In sophisticated healthcare markets, governments are focused on the mandatory use of safety devices within healthcare facilities to protect healthcare workers from the risk of acquiring blood-borne pathogens via needlestick injuries. The United States was the first nation to mandate the use of safety syringes and other safety-engineered medical devices within healthcare facilities, with the adoption of the Federal Needlestick Prevention Act in 2000, or FNSPA, and the subsequent revision to the Bloodborne Pathogens Standard (BPS). According to the International Healthcare Worker Safety Center Institute at the University of Virginia Health System, approximately one in five healthcare facilities that were inspected by OSHA between 2002 and 2007 have been issued with citations for non-compliance with the BPS.

The European Union also introduced a directive in March 2010 requiring member countries to introduce laws requiring the use of needlestick prevention products within healthcare facilities within three years. Other countries such as Canada and Australia have also taken steps to encourage the use of safety syringes. As a result of this existing and proposed legislation, safety syringes are now commonly used within the healthcare facilities in a number of countries.

The United States represents the largest and most mature market for safety syringes, with a substantial majority of hypodermic syringes and needles used within acute-care facilities featuring some type of needlestick prevention device. Notwithstanding the increased use of safety syringes, we believe that current safety syringe technologies are in several respects inadequate to fully protect healthcare workers from infection risk caused by needlestick injuries or other potential transmission modes. First, most products currently available require operators to manually slide an external plastic guard or sheath over the needle after use, or retract the needle into the barrel at a rapid, uncontrolled rate. Second, healthcare workers may choose to remove or not activate the safety feature of some types of safety syringe products. Moreover, activation of the needle retraction mechanism in the open air for some retractable syringes, rather than inside the body of the patient, may create the potential risk of infection via needlestick injuries or aerosol (splatter).

OSHA differentiates safety features in two primary ways. First, it differentiates passive safety features which “remain in effect before, during and after use” from active devices which “require the worker to activate the safety mechanism.” Second, OSHA regulations state that products with an “integrated safety design that is an integral part

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of the device and cannot be removed” are usually preferred to those with an accessory safety device with safety features that are “external” and “dependent on employee compliance.” We believe the majority of safety syringe products used in U.S. healthcare facilities incorporate active safety features which are not fully integrated within the barrel of the syringe.

We are not aware of any prefilled syringe with passive safety features that are integrated within the glass barrel. To improve compliance with legislation such as the FNSPA, a number of pharmaceutical companies attach ancillary safety products onto standard prefilled syringes following dose filling and prior to packaging. We estimate that approximately half of the drugs currently available in prefilled syringe format are supplied by the pharmaceutical manufacturer with some type of ancillary safety device. The majority of these ancillary safety products slide an external plastic sheath or guard over the needle once the injection has been completed.

It is costly for pharmaceutical companies to purchase these ancillary safety products and the automated assembly systems required to attach them onto a standard prefilled syringe. The relatively large size of prefilled syringes supplied with an ancillary safety device can also significantly increase the shipment and packaging costs of pharmaceutical companies. Furthermore, some of these prefilled syringes supplied with an ancillary safety device require the removal of the safety device from the syringe prior to use, creating the risk of infection via needlestick injury or aerosol (splatter). Thus, we believe that there is a significant market opportunity for a prefilled syringe with passive and integrated safety features that is compatible with pharmaceutical companies’ drug filling systems.

We also believe there are significant market opportunities for the use of conventional and prefilled safety syringes outside of mainstream healthcare facilities. In addition to insulin, a range of other injectable drugs designed for the prevention and/or treatment of chronic or debilitating conditions such as arthritis, multiple sclerosis and osteoporosis and thrombosis are now available for self-administration. We believe the popularity of safety syringes among patients who self-administer prescription medication may increase due to their capacity to prevent needlestick injuries to family members and encourage safe, convenient disposal. When purchased with a prescription, a number of insurance providers in the U.S. now cover safety insulin syringes under the same tier level for reimbursement as standard insulin syringes.

We believe that another market which may in the future transition towards the mandatory use of non-reusable safety syringes is the harm reduction market, where governments provide free or subsidized syringes to injecting drug users, or IDUs. The reuse and sharing of syringes by IDUs has been identified as a prime accelerant in the transmission of blood-borne diseases and is responsible for one-third of new HIV infections outside sub-Saharan Africa. The governments of more than 60 countries worldwide now sponsor harm reduction programs which seek to minimize unsafe injection practices by IDUs. While these programs have proven largely effective in preventing or containing HIV epidemics, the continued sharing of standard syringes among IDUs has contributed to the continuation of national epidemics of the relatively more infectious hepatitis C. Furthermore, the unsafe disposal of syringes in public areas creates public concern regarding the risk of needlestick injury. Recognizing the scale of HIV and hepatitis C epidemics, and the substantial economic costs associated with their long-term treatment, many governments are considering the use of single use, safety syringes as a way to enforce safe injection practices among IDUs.

Our Solution

Our clinical and prefilled safety syringes incorporate automatic, also known as passive, safety features which are fully integrated within the barrel. They are designed to assist pharmaceutical manufacturers and healthcare facilities comply with needlestick prevention laws and to encourage single use and safe disposal practices outside of healthcare settings. We consider the following combination of core proprietary features available in our safety products to be unique within the marketplace:

•  Integrated design.  All safety features are fully integrated inside the syringe barrel to facilitate compact handling, intuitive use and convenient disposal.

•  Passive activation.  The activation of the needle retraction mechanism occurs automatically (passively) while the needle is inside the body to help prevent the risk of needlestick injury.

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•  Controlled retraction.  Operators can control the speed of needle retraction directly from the body into the syringe barrel to help reduce the risk of infection through transmission routes such as needlestick injuries and aerosol (splatter).

•  Auto-disable.  Upon withdrawal of the needle into the barrel, the plunger is automatically locked to prevent re-exposure or reuse.

We have utilized this core proprietary technology to design and develop a range of prefilled and clinical safety syringes. Furthermore, we are not aware of any other company that is manufacturing safety syringes with automatic, integrated safety features in both a prefilled (glass) and clinical (plastic) format which share the same common technology platform.

Key target markets for our products include pharmaceutical companies, healthcare facilities and patients who self-administer prescription medication. We believe that the majority of our products would be supplied, either directly or through pharmaceutical customers, for use within sophisticated healthcare markets such as North America, Western Europe and some Asia-Pacific countries that require or are transitioning toward the mandatory use of safety syringes.

Business Strategy

Our goal is to progressively move to the forefront of the international transition of healthcare and pharmaceutical markets to the mandatory use of prefilled and clinical safety syringes. We believe that the competitive strength of our proprietary technology puts us in a strong position to become an established and preferred supplier of “best-in-class” safety syringe products to pharmaceutical companies, healthcare facilities and patients who self-administer prescription medication.

Key elements of our business strategy are the development, production and sale of our patent-protected safety syringes, the continued expansion of our global operational and commercial presence and the establishment of long-term supply relationships with multinational pharmaceutical and healthcare equipment companies. We are committed to designing, developing and supplying innovative medical devices that can help to enhance and save lives. We plan to:

•  Continue to build a strong relationship with sanofi-aventis:  We believe sanofi-aventis is currently the world’s largest consumer of prefilled syringes. We have had a business relationship with sanofi-aventis since 2003, and under our industrialization agreement with sanofi-aventis, they are helping to fund the industrialization program for the Unifill syringe. Upon completion of the industrialization program, we expect to begin supplying the product to sanofi-aventis for use within defined therapeutic drug classes.

•  Enter into business relationships with additional pharmaceutical companies:  We have retained the right to negotiate licensing and other business arrangements relating to the Unifill syringe with other pharmaceutical companies for use within those therapeutic drug classes outside of those held by sanofi-aventis during its period of exclusivity. It is our intention to secure agreements with other additional pharmaceutical companies who are industry leaders within their respective therapeutic areas of expertise. By pursuing this strategy, we believe our products can be marketed within a significant number of large therapeutic drug classes where prefilled syringes are commonly used.

•  Expand our proprietary product portfolio:  We will seek to enhance our competitive position in the design, development and supply of innovative safety medical devices for use within international pharmaceutical and healthcare markets. In addition to the production and supply of the Unifill syringe and the Unitract 1mL syringes, we intend to commercialize additional proprietary products which we believe can also meet the functionality and safety requirements of target customers. This may include the commercialization of our range of Unitract Clinical Syringes in a 3mL and 5mL size targeted for use within acute care hospitals and other healthcare facilities. We may also commercialize additional ready-to-fill syringe products currently in our development pipeline which, like the Unifill syringe, would be designed for supply to pharmaceutical manufacturers. While our focus will remain on the pursuit of organic growth opportunities, we may evaluate opportunities to acquire other complementary technologies or products on a case-by-case basis.

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•  Expand our operational capabilities within Central Pennsylvania:  The United States represents the world’s largest and most mature market for the supply and use of our products and services. We will continue to consolidate the majority of our commercial and operational activities within Central Pennsylvania, a national logistics hub situated between several major pharmaceutical and medical device industry clusters. We expect to continue to invest in the expansion of our operational capabilities within Pennsylvania to support the commercialization of our core products, such as the Unifill syringe.

•  Manufacture and supply our Unitract 1mL Syringes to target international markets:  We commenced production of the Unitract range of 1mL safety syringes at our facility in Pennsylvania in August 2009. We expect to progressively release this product commercially during 2010 and 2011 across key international territories. Product variants within this range such as the Unitract Insulin Syringe and the Unitract Tuberculin, or TB, Syringe have been certified for marketing and sale within key international territories including the United States, Canada, Europe and Australia. We intend to continue to expand our customer base of pharmaceutical companies and healthcare distributors for the marketing and sale of the Unitract 1mL syringes.

Our Products

Unifill syringe

The Unifill syringe is a primary drug container with automatic safety features that are fully integrated within the glass barrel. We believe it is the only ready-to-fill, or prefilled, syringe with such integrated safety features. It is supplied to pharmaceutical manufacturers as per standard handling processes, and designed for integration into the fill-finish systems used for equivalent ready-to-fill, or prefilled, syringes. The requirement to separately purchase and attach ancillary safety products onto a standard prefilled syringe after dose filling is eliminated. The Unifill syringe is also similar in size to an equivalent prefilled syringe and significantly smaller than those attached with an ancillary safety product to reduce packaging, transport and storage volumes.

As a primary container, all components within the fluid path utilize materials are USP compliant and will be sourced from established pharmaceutical suppliers. The handling and administration of the Unifill syringe is the same as injections undertaken with an equivalent prefilled syringe.

Upon the delivery of a full dose, a passive retraction mechanism is activated, whereupon operators may control the speed of needle withdrawal directly from the body into the barrel of the syringe to virtually eliminate the risk of needlestick injury or aerosolization (splatter). The plunger is then automatically disabled to prevent re-exposure, and to facilitate compact, convenient disposal.

The Unifill syringe has been designed for therapeutic drugs which are primarily administered via subcutaneous injection and considered to be suitable for use either by healthcare workers or patients that self-administer prescription medication outside of healthcare facilities.

We believe the use of the Unifill syringe by a pharmaceutical customer can facilitate compliance with needlestick prevention legislation and reduce production, packaging and transportation costs associated with the purchase and attachment of these ancillary safety devices. The compact size, intuitive use, functionality and automatic safety features of the Unifill syringe may also help pharmaceutical companies extend product lifecycles, increase levels of market differentiation in competitive therapeutic areas, and expand the marketability of some drugs for convenient self-administration by patients outside of the healthcare setting.

We intend to file a Type III Drug Master File for the product with relevant regulatory authorities such as the FDA, although it is the ultimate responsibility of the pharmaceutical customer to obtain final approval of the combination drug-delivery device. We expect that the commencement of product sales will coincide with the completion of the industrialization program.

Unitract 1mL syringes

The Unitract 1mL range of safety syringes is primarily designed for the subcutaneous injection of drugs within healthcare facilities and by patients who self-administer prescription medication such as insulin. In addition to

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insulin and tuberculin, or TB, variants, the Unitract 1mL range also includes the Unitract Safe Syringe which is custom-designed for use by governments that utilize harm reduction (needle exchange) programs to prevent the reuse, sharing and unsafe disposal practices of IDUs. Unlike the Unifill ready-to-fill syringe, the Unitract 1mL syringes require healthcare workers or patients to draw up the dose from a vial or ampoule immediately prior to the injection.

We have received regulatory certification for the marketing and sale of various Unitract 1mL syringe products in the United States, Australia and Canada and have received CE Mark approval in the European Union. We commenced initial production of Unitract 1mL syringes in China during 2008 to support regulatory approval and marketing activities. In August 2009, we commenced production of the Unitract 1mL syringes at our Pennsylvania facility utilizing an automated assembly system that we designed and built in-house. During April 2010, we received clearance from the FDA to permit us to commence commercial sales of U.S. manufactured stock for our Unitract 1mL Insulin syringe. In September 2010, we received clearance from the FDA for our Unitract TB syringe.

Pipeline Products

We also hold additional syringe-related intellectual property for products which we intend to commercialize in the future. These pipeline products include a Unitract range of plastic clinical syringes to be developed in larger sizes such as 3mL and 5mL. We believe that commercialization of this pipeline range of larger clinical syringes would further improve our opportunities to market and sell our products within healthcare facilities such as acute-care hospitals. We have also designed and filed patents for a number of other safety syringe products that utilize our proprietary technology. We intend to continue to expand our competitive position within target pharmaceutical and healthcare markets through the commercialization of a number of these other pipeline products.

Strategic Partnership with sanofi-aventis

We started to collaborate with sanofi-aventis in 2003 for the development of the Unifill syringe as a next-generation drug delivery safety device. Sanofi-aventis is a large, global pharmaceutical company, whose products span multiple therapeutic areas, including cardiovascular diseases, thrombosis, oncology, metabolic diseases, internal medicine and vaccines. We believe that sanofi-aventis is currently the world’s largest purchaser of prefilled syringes.

We have signed an exclusive licensing agreement with sanofi-aventis. Under the exclusive licensing agreement, we have granted sanofi-aventis an exclusive license to certain of our intellectual property in order and solely to develop, in collaboration with us, the Unifill syringe for use in and sale to the prefilled syringe market within those therapeutic areas agreed upon between us, and a non-exclusive license outside those therapeutic areas that are exclusive to sanofi-aventis or after the expiration of the exclusive license with sanofi-aventis.

We and sanofi-aventis have agreed on a list of therapeutic drug classes that are exclusive to sanofi-aventis. These areas include the full therapeutic classes of antithrombotic agents and vaccines and an additional four smaller subgroups that fall within other therapeutic classes that we believe represent new market opportunities in the pharmaceutical use of prefilled syringes. Sanofi-aventis will retain the exclusive right to negotiate to purchase the product within these designated therapeutic drug classes until June 30, 2014, subject to the extension described below.

Pursuant to the exclusive licensing agreement, sanofi-aventis has paid to us a 10.0 million euro upfront one-time fee. The exclusive license granted thereunder has an initial term expiring on June 30, 2014. If, during the term of the exclusive license, sanofi-aventis has purchased the Unifill syringe for use with a particular drug product, sanofi-aventis will receive a ten-year extension of the term of the exclusive license, which extension will be reduced to five years if sanofi-aventis does not sell a minimum of 20 million units of the product in any of the first five years of such ten-year extension period.

Under the exclusive licensing agreement, we are not precluded from using certain of our intellectual property to develop, license and sell any products in any market other than the ready-to-fill syringe market, or from entering into licensing or other business arrangements with other pharmaceutical companies for the ready-to-fill syringe market outside those therapeutic areas that are exclusive to sanofi-aventis, or after the expiration of the exclusive

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license with sanofi-aventis. If we grant a license to a third party in respect of the ready-to-fill syringe market, then we are required to pay sanofi-aventis 70% of any access, license or other upfront fee received from such third party for access to purchase the products until our payments to sanofi-aventis have totaled 10.0 million euros, following which we are required to pay 30% of such fees we receive through the end of the initial exclusivity period. We are also required to pay sanofi-aventis an annual royalty payment of 5% of the revenue generated from any sale of the Unifill syringe to third parties, up to a maximum amount of 17.0 million euros in such royalty payments.

On June 30, 2009, we signed an industrialization agreement with sanofi-aventis. The industrialization agreement sets forth the terms for the collaboration between the parties to design, develop, scale up and industrialize the Unifill syringe, including the timetable and milestones for the industrialization program. Under the industrialization agreement, sanofi-aventis has agreed to provide up to 17.0 million euros in payments to us based on milestones we achieve in our industrialization program. The industrialization program began in July 2008. Upon the scheduled completion of the program, we expect to commerce commercial supply of the Unifill syringe to pharmaceutical customers in 2011. From October 2008 through September 2010, we have received payments of 15.0 million euros under the industrialization agreement. Key activities required to be accomplished prior to the completion of the industrialization program include the validation of the first commercial automated assembly system, being developed by Mikron, the completion of a new manufacturing facility in York, Pennsylvania and the establishment of a designated cleanroom for the installation of the automated assembly system.

The industrialization agreement provides that, subject to the full completion of the industrialization program, the parties will negotiate a supply agreement for the manufacture and purchase of the final product on a commercial scale. The supply agreement will provide that sanofi-aventis and its affiliates will purchase the final product exclusively from us, and the industrialization agreement provides that we are not required to commit more than 30% of our expected installed production capacity to sanofi-aventis and its affiliates for the 12 months following the receipt of a purchase order. Any order of sanofi-aventis, together with its other orders, that will exceed the 30% capacity limit will require up to a maximum of 24 months lead time before we are required to commence delivery of that order.

Pursuant to the industrialization agreement, if UMSL agrees to, or proposes to agree to, a change of control with a third party, UMSL must give a written notice to sanofi-aventis, who will be entitled, within five business days, to make an offer on at least equivalent terms. In the absence of an improved change of control proposal, UMSL must accept the matching offer of sanofi-aventis. If UMSL receives an improved change of control offer from the third party, then UMSL must give a further notice to sanofi-aventis for it to make a further matching offer. In addition, if during the term of the industrialization agreement, a change of control that does not involve sanofi-aventis, or its affiliates, obtaining control of UMSL (i) is not recommended by UMSL’s board of directors, (ii) will cause harm to sanofi-aventis, as defined in the agreement or (iii) under which Mr. Alan Shortall, our CEO and director, is not to continue in such capacities for at least two years after the change of control, then sanofi-aventis will have the right to terminate the industrialization agreement within ten business days after receiving a notice from UMSL, or after it otherwise becomes aware of the change of control. Pursuant to the industrialization agreement, a change of control means, in general terms, a change in the ownership of 50% or more of UMSL’s shares or the power to determine the majority composition of UMSL’s board of directors or any other event that UMSL’s board determines to be a change of control event.

Manufacturing

We have an FDA-registered, 50,000 square foot medical device production facility in Lewisberry, Pennsylvania. This facility has two class-eight clean rooms. The first clean room houses a fully automated assembly system used to manufacture our Unitract 1mL syringes. This automated assembly system, which has an optimum capacity of up to 40 million units per year, was fully designed, developed, built and qualified by our in-house team. The other clean room is used to assemble non-proprietary medical devices under contract with B. Braun. Other areas of our Lewisberry facilities are used for offices, product design and prototyping, engineering activities and the construction of automated assembly systems. Prior to the commencement of commercial production of the Unitract 1mL syringe at our Lewisberry facility, we utilized a medical device company in China to manufacture sufficient volumes of these products to obtain regulatory approvals and undertake preliminary

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marketing activities. We intend to focus upon the domestic manufacture of our Unitract 1mL syringe in Pennsylvania in the foreseeable future.

To support our manufacturing plan for the high-volume production of the Unifill syringe, we are outsourcing the development and manufacture of automated assembly systems for this product to Mikron Assembly Technology, an established industry specialist. Mikron is developing and supplying an automated assembly system to support the commercial production of our Unifill syringe that will be installed into our new facility in York, Pennsylvania. We anticipate that this automated assembly system will have a target production capacity of approximately 60 million units per year. Additional assembly lines, which we expect to commission and operate beyond 2010, are targeted to have an annual manufacturing capacity of approximately 150 million units per year.

To support our business expansion activities, we are in the process of developing a new manufacturing facility close to our Lewisberry facility within York, Pennsylvania. We expect to transition the majority of our staff and manufacturing activities into the new manufacturing facility by late-2010. For more details regarding the development of the new manufacturing facility, please see “Item 2. Properties”.

We source our components and raw materials under written contracts with a variety of suppliers, all of which specialize in the medical device and pharmaceutical sectors. We have also entered into a number of relationships with other companies for the initial supply of components, raw materials and related services for the Unifill syringe. Due to an initial requirement for only limited production volumes of components which comprise the Unifill syringe, we currently receive a majority, or in some cases all, our components such as rubber seals and glass barrels from a single source supplier. To support the industrialization program for this product and further strengthen our supply chain in the long-term, we intend to establish, wherever feasible, a dual-source strategy for the production of key components, raw materials and related services. The companies we expect to appoint for the production and supply of items and related services pertaining to the Unifill syringe all have an established presence in the international drug delivery market, with the majority having facilities in North America and/or Europe.

Sales and Marketing

We expect that our primary customers will be pharmaceutical companies which utilize prefilled syringes as a primary container device for the administration of therapeutic drugs and vaccines. We intend to enter into supply agreements for the Unifill syringe with sanofi-aventis and some other pharmaceutical customers. The majority of these target pharmaceutical customers are multinational companies with headquarters located in either the United States or Europe.

We expect the pharmaceutical customer to be primarily responsible for the sale, marketing and clinical use of the combination drug-delivery device to target government agencies, healthcare facilities or patients who self-administer prescription medication within indicated therapeutic drug classes. We expect to support pharmaceutical customers in the development of documentation or marketing material pertaining to the recommended clinical use of the device with the contained drug or vaccine. We may also enter into agreements for the supply of the Unitract 1mL syringes directly to pharmaceutical companies for use with injectable drug products which are supplied in a vial and marketed in a kit format.

We also intend to distribute our Unitract 1mL syringes within the United States via distributors which specialize in target markets such as long-term and acute care healthcare facilities or the direct mail order of prescription medication and medical equipment to patients for self-administration. We will also examine opportunities to enter into relationships for our Unitract 1mL syringes with group purchasing organizations, or GPOs, which secure competitive pricing for commodity items such as syringes on behalf of members such as acute-care hospitals. Over the past decade, many GPOs have introduced programs that encourage the expedient evaluation and selection of innovative products developed by smaller companies. However, we do not expect to fully penetrate the acute-care hospital market until we have a complete range of clinical syringe sizes.

Outside of the United States, we have distributors to sell our Unitract 1mL syringes in Canada, India, China, Japan and Taiwan and expect to appoint other distributors within other international healthcare markets such as Western Europe and the Asia-Pacific region. Furthermore, we intend to review opportunities to collaborate with

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governments seeking to examine the use of our Unitract 1mL syringes as a means of helping to prevent the re-use, sharing and unsafe disposal of non-sterile syringes by injecting drug users.

We have a small internal team to support the training of appointed distributors in the marketing and clinical use of our Unitract 1mL syringes. We intend to expand this team as we commence sales of our Unitract 1mL syringes, build relationships with pharmaceutical companies, and appoint additional distributors and commercialize our additional pipeline products.

Intellectual Property

We have established an intellectual property portfolio through which we seek to protect our products and technology. Our intellectual property portfolio includes 32 granted patents in 16 countries, with four issued patents each in Australia and two in the United States. We have filed a significant number of patent applications that are now pending in Australia, the United States, Europe, China, India and other countries covered under the Patent Cooperation Treaty. We also hold provisional patent applications in both the United States and Australia and several registered trademarks. Our patents expire at various dates between 2018 and 2028. Patents relating to the Unifill syringe are expected to expire by 2028. Trade secrets law in the United States and other jurisdictions provides additional protection. We also enter into non-disclosure agreements with certain vendors and customers. All active United States based employees have signed confidentiality, non-compete and intellectual property assignment agreements.

We classify our patents and patent applications as they relate to particular product categories including 1mL insulin and safe syringes with an attached needle; clinical syringes which include larger sizes and interchangeable luer needles; and our Unifill syringe. Many of the features claimed in the insulin and safe syringes patents, such as the mechanism allowing automatic and controlled needle retraction within an integrated medical device, also apply to our other safety syringe products, including the Unifill syringe. Some key patents covering countries such as Australia, the United States and Europe, as well as some of our international patent applications, are described below:

INSULIN AND SAFE SYRINGE (UNITRACT)

	Issued
Description	Patent No.		Patent Application No.		Publication No.		Patent Expiry Date
Australian Patent		731159						September 22, 2018
U.S. Patent		6,083,199						September 22, 2018
International
Patent Application				PCT/AU01/000458		WO 01/80930		April 20, 2021
Europe				01925194.1		1 276 530 A		April 20, 2021
USA		7,500,967				20030158525		July 15, 2022
International
Patent Application				PCT/AU2004/000354		WO 2004/082747
Europe				04721775.7		1 608 421A		March 19, 2024
USA				10/549,710		20060235354		March 19, 2024	*

* subject to possible patent term adjustment

The patents listed above cover the following features of the insulin and safe syringe:

•  a plunger with interconnecting slots and gates to proved rotation into the injection stroke and then the lockout stroke;

•  a compressed spring to retract the needle and rotate the plunger into a locked position to prevent sharps exposure; and

•  a plastic mount on the needle to provide a needle pickup by the plunger for needle retraction.

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CLINICAL SYRINGE

	Issued
Description	Patent No.	Patent Application No.		Publication No.		Patent Expiry Date
International Patent Application			PCT/AU2005/000107		WO 2005/072801
Europe			05700138.0		1 708 772		January 28, 2025
USA			10/587,705		20080255513		January 28, 2025	*
International Patent Application			PCT/AU2006/000618		WO 2006/119570
Europe			06721494.0		1 879 635A		May 11, 2026
USA			11/914,092		20090221962		May 11, 2026	*
USA			61/160,253				November 11, 2029

* subject to possible patent term adjustment

The patents listed above cover the following features of the clinical syringe:

•  a plunger that holds a compressed spring that is used to retract a luer mount needle from the end of the barrel;

•  a plunger that retracts a luer mount needle into the barrel with controlled reaction;

•  a luer mount needle that is mounted in the barrel with retaining clips integrally formed in the barrel and which uses an ejector to release the needle; and

•  a clinical syringe with a proprietary changeable needle with controlled retraction.

READY TO FILL SYRINGE (UNIFILL)

	Issued
Description	Patent No.	Patent Application No.		Publication No.		Patent Expiry Date
International Patent Application			PCT/AU2006/000516		WO 2006/108243
Europe			06721397.5		1 868 669		April 18, 2026
USA			11/911,481		2009093759		April 18, 2026
International Patent Application			PCT/AU2008/000971		WO 2009/003234 A1
Europe			08757038.8				July 2, 2028
USA			12/666,448				July 7, 2028
USA			61/260,252				November 11, 2029
USA			61/289,259				December 22, 2029
USA			61/331,197				May 14, 2030

The patents listed above cover the following features of the Unifill syringe:

•  a two-piece plunger seal and a needle seal with an ejector;

•  a plunger that is molded with a needle pickup feature;

•  a plunger where the control rod is broken off to reduce the disposal length;

•  a needle retainer and release ring that are glued to a glass barrel to overcome limited moldability of glass;

•  a needle retainer, ejector ring and needle seal that retain the needle mount until released for retraction after the full dose is administered;

•  a proprietary changeable needle with controlled retraction; and

•  a plastic barrel adapter mounted to a parallel glass barrel for simplified manufacture, with controlled retraction.

An issued patent, unlike a pending patent application, has been reviewed by the relevant national patent office and has met the legal requirements for patentability required by the law of that country. An issued patent can

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therefore be enforced against infringers in the courts of the country where granted, although an issued patent does not guarantee that the company has freedom to operate and could still infringe upon the issued patent of another patent held by a third party.

In a number of key countries, we have registered trademarks including Unitract and have commenced applications to register trademarks for our company name, Unilife, as well as our ready-to-fill syringe brand name Unifill. Unitract is a registered trademark in the United States and is also filed under the Madrid Protocol Agreement for the international registration of marks in 25 countries, including France, Germany, Japan, China, Switzerland and the United Kingdom. Additionally, Unitract is a registered trademark in Australia, Mexico, New Zealand, Canada, India, Indonesia, South Africa, and Brazil. Unitract Safe Syringe is also a registered trademark in Australia.

Government Regulation

The development, manufacture, sale and distribution of medical devices are subject to comprehensive government regulation. Our medical devices and manufacturing operations are subject to regulation under the Federal Food, Drug and Cosmetic Act, or the FDC Act, as implemented and enforced by the FDA and various other federal and state agencies and are also subject to regulation by foreign governmental agencies. These laws and regulations govern the development, testing, manufacturing, labeling, advertising, marketing and distribution and market surveillance of medical devices.

FDA’s Premarket Clearance and Approval Requirements

Unless an exemption applies, each medical device we wish to distribute commercially in the United States will require either prior 510(k) clearance or premarket approval from the FDA. The FDA classifies medical devices intended for human use into three classes: Class I, Class II and Class III. Class I or Class II devices require the manufacturer to submit to the FDA a premarket notification requesting permission to commercially distribute the device. This process is generally known as 510(k) clearance. Class III devices require premarket approval. Our clinical range of syringes, including our Unitract 1mL syringe, are Class II devices. Our Unifill syringe does not require 510(k) clearance because it will be sold to drug manufacturers in its component parts for use as a primary packaging container. None of our products require premarket approval.

There is a different regulatory process that will apply to our Unifill syringe because it will not be distributed as a device. It will be used as a primary container by drug manufacturers to provide drugs in a prefilled format. In the case of the Unifill syringe, it is the responsibility of the pharmaceutical customer who will use the Unifill syringe for its drug to obtain final product approvals, either by submitting a new drug application or abbreviated new drug application. In order to support the pharmaceutical customer’s application, we intend to create what is known as a drug master file. A drug master file is a submission to the FDA that may be used to provide information about facilities, processes or articles used in the manufacturing, packaging and storing of one or more human drugs. The drug master file will define the manufacturing and safety characteristics of the Unifill syringe while protecting proprietary information regarding its technical design.

510(k) Clearance Pathway

When obtaining a 510(k) clearance is required, we must submit a premarket notification demonstrating that our proposed device is substantially equivalent to another legally marketed product (i.e., that it has the same intended use and that it is as safe and effective as a legally marketed, or predicate, device and does not raise different questions of safety or effectiveness than does a predicate device). According to FDA regulations, the FDA is required to clear or deny a 510(k) premarket notification within 90 days of submission of the application, or 30 days in the case of an abbreviated 510(k) application that may be filed for product line extensions. As a practical matter, 510(k) clearance often takes between three and twelve months.

We received 510(k) clearance for our Unitract 1mL insulin syringe in October 2008 that covered the production of the device by a contractor outside the United States. We received 510(k) clearance for the production of our Unitract 1mL insulin syringe at our Pennsylvania manufacturing facility in March 2010. We received 510(k) clearance for the production of our Unitract 1mL TB syringe at our Pennsylvania manufacturing facility in September 2010.

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Premarket Approval Pathway

A premarket approval application must be submitted to the FDA if the device cannot be cleared through the 510(k) process. A premarket approval application must be supported by extensive data, including, but not limited to, technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device. This process does not apply to our current range of products.

Pervasive and Continuing Regulation

After a device is placed on the market, numerous regulatory requirements apply. These include:

•  quality system regulations, or QSR, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process;

•  labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off label” uses;

•  medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to occur; and

•  post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.

The FDA has broad post-market and regulatory enforcement powers. We are subject to unannounced inspections by the FDA to determine our compliance with the QSR and other regulations, and these inspections may include the manufacturing facilities of our manufacturing subcontractors.

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

•  fines, injunctions, consent decrees and civil penalties;

•  recall or seizure of our products;

•  operating restrictions, partial suspensions or total shutdown of production;

•  refusing our requests for 510(k) clearance or premarket approval of new products or new intended uses;

•  withdrawing 510(k) clearance or premarket approvals that are already granted; and

•  criminal prosecution.

Regulation in the European Union and Australia

The European Union has adopted numerous directives regulating the design, manufacture, clinical trials, labeling and adverse event reporting for medical devices. Devices that comply with the requirements of the relevant directive will be entitled to bear CE conformity marking, indicating that the device conforms with the essential requirements of the applicable directives and, accordingly, can be commercially distributed throughout the member states of the European Union. The method of assessing conformity varies depending on the type and class of the product, but normally involves a combination of self-assessment by the manufacturer and a third party assessment by a “Notified Body” which is an independent and neutral institution appointed by a country to conduct the conformity assessment. This third-party assessment may consist of an audit of the manufacturer’s quality system and specific testing of the manufacturer’s device. An assessment by a Notified Body in one member state of the European Union is required in order for a manufacturer to commercially distribute the product throughout these countries. ISO 9001 and ISO 13845 are voluntary harmonized standards. Compliance establishes the presumption of conformity with the essential requirements for CE Marking. In July 2009, we received our ISO 13485:2003 quality system certification. Our certification includes the design, development, production and distribution or

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sterile syringes and insulin syringes and the provision of contract manufacturing services to the medical device industry.

We have successfully completed a Notified Body audit to allow our Unitract syringes to bear the CE mark resulting in CE certification for our Unitract insulin and tuberculin 1mL syringes.

In Australia, the Therapeutic Goods Administration, or TGA, is responsible for administering the Australian Therapeutics Goods Act. The Office of Devices, Blood and Tissues is the department within the TGA responsible for medical devices. The Australian Register of Therapeutic Goods, or ARTG, controls the legal supply of therapeutic goods in Australia. The ARTG is the register of information about therapeutic goods for human use that may be imported, supplied in, or exported from Australia. Any use of an unapproved medical device in humans, even in pilot trials, requires an exemption from the requirement for inclusion on the ARTG. US manufacturers seeking to market product in Australia must acquire CE certification and lodge manufacturer evidence, including the CE certificate and a Declaration of Conformity to Australian Requirements, with the TGA. The lodging of this information with the TGA is completed by an Australian sponsor, with the assistance/support of the manufacturer. Upon TGA acceptance of the manufacturer evidence, the Australian sponsor/manufacturer must create a medical device inclusion in the ARTG and only is then able to release USA-manufactured product in Australia. Our only product that is included on the ARTG is our Unitract 1mL syringe that was previously manufactured for us in China. During June 2010, we received our CE certification for U.S.-manufactured stock of this product. We are currently completing the necessary registration and listing documents for sale of this product in Australia.

With regard to the regulatory process in the European Union and Australia for the Unifill syringe, as in the case of the U.S., it is the responsibility of the pharmaceutical customer who will use the Unifill syringe for its drug to obtain final product approvals.

Other Regulations

We are also subject to various federal, state and local laws and regulations, both in the United States and other international territories where we conduct business, relating to such matters as safe working conditions, laboratory and manufacturing practices and the use, handling and disposal of hazardous or potentially hazardous substances used in connection with our research and development work. Although we believe we are in compliance with these laws and regulations in all material respects, we cannot provide assurance that we will not be required to incur significant costs to comply with environmental laws or regulations in the future.

We are subject to various federal, state and local laws in the United States targeting fraud and abuse in the healthcare industry, which generally prohibit us from soliciting, offering, receiving or paying any remuneration in order to induce the ordering or purchasing of items or services that are in any way paid for by Medicare, Medicaid or other government-sponsored healthcare programs. Healthcare costs have been and continue to be a subject of study, investigation and regulation by governmental agencies and legislative bodies around the world. The U.S. federal government continues to scrutinize potentially fraudulent practices affecting Medicare, Medicaid and other government healthcare programs. Payers have become more influential in the marketplace and increasingly are focused on drug and medical device pricing, appropriate drug and medical device utilization and the quality and costs of healthcare. Violations of fraud and abuse-related laws are punishable by criminal or civil sanctions, including substantial fines, imprisonment and exclusion from participation in healthcare programs such as Medicare and Medicaid and health programs outside the United States.

Competition

The healthcare equipment, pharmaceutical and medical device industry sectors in which we operate are highly competitive. We compete with many companies, both public and private, that range in size from small, highly focused businesses to large diversified multinational manufacturers of healthcare and pharmaceutical equipment, as more fully described below.

While we do not believe there are any other companies that offer a ready-to-fill syringe with safety features which are fully integrated within the glass barrel, there is a highly concentrated market for the production of standard ready-to-fill syringes for supply to pharmaceutical manufacturers. We are aware of five companies which

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specialize in the production and supply of glass ready-to-fill syringes. These companies are Becton, Dickinson and Company, or BD, Gerresheimer Bünde GmbH, MGlas AG, SCHOTT forma vitrum AG, and Nuova Ompi. All of these companies are larger and better capitalized than we are, and have an extensive base of pharmaceutical customers. We estimate the market concentration rate for these five companies to be approximately 95%. We believe BD’s market share to be in excess of 50%, as it has supply relationships with most pharmaceutical companies and contract manufacturing organizations. Of these five aforementioned companies, we believe that BD is the only one which also markets and supplies ancillary safety products for attachment onto standard prefilled syringes to assist pharmaceutical companies in their compliance with needlestick prevention laws. We are aware of another specialist supplier of ancillary safety products, Safety Syringes Inc, which has contracts with a number of pharmaceutical manufacturers.

We have sought to strengthen our competitive position in this marketplace in a number of ways. For example, the design of the Unifill syringe incorporates the use of a glass barrel which requires shaping at only one end. As a result, the glass barrel for the Unifill syringe may be sourced from the many global suppliers of glass cartridges and not just the five specialty manufacturers mentioned above.

The global market for clinical (non-pre-filled) plastic syringes is highly competitive, with at least 50 manufacturers located across North America, Europe and the Asia-Pacific. The market for clinical safety syringes is relatively less competitive, yet highly concentrated. We believe BD is the largest global supplier of clinical safety syringes. Other companies which compete in this market sector include Retractable Technologies, Inc, Covidien and Smiths Medical. All of these companies offer a full range of clinical safety syringes, operate a strong sales, distribution and customer support network, and have existing supply relationships with major healthcare buying groups.

Research and Development

During the fiscal years ended June 30, 2010 and 2009, we incurred approximately $8.5 million and $1.0 million, respectively, on research and development of our technologies. Research and development costs include activities related to the research, development, design, testing, and manufacturing of prototypes of our products. It also includes clinical activities and regulatory costs. Research and development costs also include costs associated with certain consultants engaged in research and development activities along with a portion of the overhead costs we incur to operate our manufacturing facility. We expect our research and development expenses to continue as we continue to develop other pipeline product variants of our technology such as the Unitract clinical range of larger syringe sizes.

Employees

As of September 15, 2010, we had 154 employees, of whom 129 are engaged in operations activities including research and development, quality assurance and manufacturing activities, 4 are engaged in marketing and clinical activities and 21 are engaged in finance, legal and other administrative functions. All but four of our employees and all of our executive officers are located at our facilities in Central Pennsylvania. All but two of our employees are full-time employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relations with our employees to be good.

Legal Proceedings

In the ordinary course of our business, we may be subject to various claims, pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. We are not aware of any material pending legal proceedings to which we or any of our subsidiaries is a party or of which any of our properties is the subject.

Corporate History

Unilife Corporation was incorporated in Delaware on July 2, 2009 as a wholly-owned subsidiary of UMSL. As we describe in more detail under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Redomiciliation.”, on January 27, 2010, Unilife Corporation became the parent company of UMSL

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upon completion of the redomiciliation and UMSL’s shareholders and option holders exchanged their interests in UMSL for equivalent interests in Unilife Corporation. Our principal executive offices are located at 633 Lowther Road, Lewisberry, PA 17339. Our telephone number at this address is +1 717 938-9323.

UMSL was incorporated on June 28, 1985, in South Australia, Australia. The registered office of UMSL is located at Suite 3, Level 11, 1 Chifley Square, Sydney NSW 2000. Originally known as Musgrave Block Holdings Limited, UMSL acquired all of the issued shares of Unitract Pty Limited in November 2002, and changed its name to Unitract Limited (now Unilife Medical Solutions Limited), listed on the Australian Securities Exchange, or ASX under the ticker “UNI” and continued the business operations of Unitract Pty Limited and the development of Unitract Pty Limited’s retractable syringe project. In January 2007, in order to obtain a manufacturing presence in the United States, UMSL acquired all the stock of Integrated BioSciences, Inc., a Pennsylvania-based company, which changed its corporate name to Unilife Medical Solutions, Inc. in February 2009. At the time of its acquisition by UMSL, Integrated BioSciences, Inc. was in the business of contract manufacturing of syringes for third parties and developing automated assembly equipment.

Item 1A.   Risk Factors

Our business faces many risks. We believe the risks described below are the material risks facing the Company. However, the risks described below may not be the only risks we face. Additional unknown risks or risks that we currently consider immaterial may also impair our business operations. If any of the events or circumstances described below actually occurs, our business, financial condition or results of operations could suffer, and the trading price of our shares of common stock could decline significantly. Investors should consider the specific risk factors discussed below, together with the “Cautionary Note Regarding Forward-Looking Information” and the other information contained in this Annual Report on Form 10-K and the other documents that we file from time to time with the Securities and Exchange Commission.

Risks Relating to Our Business

We need additional funding and may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our efforts in developing our new manufacturing facility and in our product development or commercialization programs.

We are in the process of developing a new manufacturing facility in central Pennsylvania. We estimate the total cost to be approximately $31.0 million, including approved change orders through September 15, 2010. We intend to secure external financing for up to approximately $20.2 million from a commercial bank or other lending institution in the U.S. and/or from the Commonwealth of Pennsylvania or other federal and state bodies and fund the balance through existing cash reserves. Although we currently believe that our current cash resources, together with our anticipated cash flows, will be sufficient to fund our operations (other than the development of the new manufacturing facility which we expect to finance in part with the proceeds of external financing) through at least the second quarter of fiscal 2011, we may obtain additional funding in the future for our product development programs and commercialization efforts. The remaining funding as agreed under the industrialization agreement with sanofi-aventis to complete the industrialization program for the Unifill syringe is $2.6 million. Upon the completion of this program, we may need to obtain additional funding. In addition to potential anticipated sales to sanofi-aventis, we are also engaged in ongoing discussions with additional pharmaceutical companies regarding the sale of the product in areas where sanofi-aventis has not retained exclusive rights. These discussions could lead to arrangements to provide additional funding for the further development of our products.

We cannot provide assurance that we will be able to raise additional funding, if needed, on terms favorable to us, or at all. If we raise additional funds from debt financing, we may be obligated to abide by restrictive covenants contained in the debt financing agreements, which may make it more difficult for us to operate our business. If we raise additional funds through the issuance of equity securities, our shares of common stock may suffer dilution. If we are unable to secure additional funding, if needed, our ability to develop or maintain the new manufacturing facility and continue in our product development and commercialization programs would be delayed, reduced or eliminated.

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We have received an audit report with a going concern disclosure on our consolidated financial statements.

The continuation of our Company as a going concern is dependent upon our Company attaining and maintaining profitable operations and / or raising additional capital. Our independent registered public accounting firm included, in their audit report on our consolidated financial statements for the year ended June 30, 2010, an explanatory paragraph regarding the substantial doubt about our ability to continue as a going concern. Our consolidated financial statements contain additional note disclosures describing the liquidity condition of the Company. As a result of this uncertainly we may have a more difficult time obtaining necessary financing

Our success depends in large part on our ability to complete the industrialization program for our primary product, the Unifill syringe, and achieve substantial commercial sales of this product to customers. If we experience problems or delays in completing our industrialization program or securing favorable agreements to supply the Unifill syringe to customers, our business, including our ability to generate significant revenues, will be materially and adversely affected.

We commenced the industrialization program for the Unifill syringe in July 2008. Upon the scheduled completion of this program, as well as the development and qualification of production systems to support the manufacture and commercial sale of the Unifill syringe, we expect to commence commercial supply of the Unifill syringe to pharmaceutical customers during 2011. Since the Unifill syringe is our primary product, any failure or significant delay in completing these activities could materially harm our business and our ability to generate any significant amount of revenues for the foreseeable future. Even if we successfully complete our industrialization program for the Unifill syringe, our ability to generate significant revenues will depend on our ability to negotiate successfully one or more supply agreements for the Unifill syringe with sanofi-aventis and/or other pharmaceutical companies and to begin supplying substantial quantities of the product under such agreements. We cannot predict with certainty if and when we will be able to enter into any supply agreements for the Unifill syringe or what the terms of any such agreements will be. If we are unable to secure favorable supply agreements for the Unifill syringe in a timely manner, our ability to generate significant revenues will be materially and adversely affected.

Our business is substantially dependent on our relationship with our strategic partner, sanofi-aventis.

To date, we have derived a substantial majority of our revenues from our exclusive licensing and industrialization agreements with sanofi-aventis. For the years ended June 30, 2010 and 2009, our revenues from these agreements were $8.9 million and $16.1 million, respectively, which represented 78% and 81% of our revenues for the periods, respectively. We expect that revenues from sanofi-aventis will continue to account for a substantial majority of our revenues at least through the end of calendar 2010. Even if we are able to enter into supply agreements and commence commercial sales to companies other than sanofi-aventis, we expect that sanofi-aventis will be our most significant customer, at least until its exclusive period terminates, and that revenues from sanofi-aventis will continue to account for a substantial majority of our revenues and cash flows from operations. Any termination or material breach of the existing agreements between sanofi-aventis and us, any failure to successfully negotiate a supply agreement with sanofi-aventis, or any failure to perform under any supply agreement that we do negotiate, would be likely to materially and adversely affect our business.

Our research and development and other operating expenses are significant and we do not expect to be profitable unless and until we complete our industrialization program, negotiate a supply agreement with sanofi-aventis or other pharmaceutical companies and begin commercial sale of the Unifill syringe.

We have incurred and will continue to incur significant research and development expenses for the completion of the industrialization program for the Unifill syringe, as well as for the development of other product variants of our technology. We will also incur general and administrative expenses related to increasing our manufacturing operations, expanding our sales and marketing capabilities, seeking regulatory approvals, and complying with the requirements related to being a public company in both the United States and Australia. We will not be profitable unless we are successful in developing and commercializing the Unifill syringe and other new products, obtaining regulatory approvals, and manufacturing, marketing and selling commercial products.

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The Unifill syringe has been designed to be compatible with the drug manufacturing systems currently utilized by sanofi-aventis, which may hinder our ability to sell the product to other pharmaceutical customers whose manufacturing processes may not be compatible with our current product designs.

The Unifill syringe has been designed to be compatible with the drug filling and packaging systems of sanofi-aventis. While the standard glass barrels to be used for the Unifill syringe are also currently utilized by most pharmaceutical companies, the specific processes used by other pharmaceutical companies to fill, manufacture or package prefilled syringes with an injectable drug product may vary from those of sanofi-aventis. Furthermore, pharmaceutical companies may in some cases require the use of materials which are biocompatible with a particular drug compound and to which we do not have access. Such events may require design, material or process changes to our product, or restrict our ability to enter into supply relationships with other pharmaceutical companies and accordingly, may have a material adverse effect on our results of operations and financial condition.

Our ability to successfully market and sell our safety syringes outside of the pharmaceutical market may be impaired until we are able to offer a full range of safety syringes in sizes commonly used in acute-care facilities.

In addition to the Unifill syringe, our product portfolio also includes the Unitract 1mL syringe, a plastic syringe which we refer to as a clinical syringe. Acute-care hospitals are the largest single healthcare market for clinical syringes. These facilities use a range of clinical syringes, including 1mL, 3mL and 5mL sizes, for the subcutaneous and intramuscular administration of therapeutic drugs and vaccines. We have completed development and secured regulatory approvals only for the marketing and sale of our Unitract 1mL syringe. While we intend to market the Unitract 1mL syringe to other healthcare sectors in addition to acute-care facilities, our ability to market and sell our safety syringes successfully may be impaired until we are able to offer clinical syringes in a full range of sizes.

Our success will depend on the full commercialization of our current products, and the development and commercialization of other pipeline products. There can be no assurance that we will be successful in these efforts.

A significant element of our strategy focuses on developing products that deliver greater benefits to pharmaceutical companies, healthcare workers and patients. The development of these products requires significant research and development, clinical evaluations and regulatory approvals. The results of our product development efforts may be affected by a number of factors, including our ability to innovate, develop and manufacture new products, complete clinical trials, obtain regulatory approvals and secure customer orders for these products. In addition, patents attained by others can preclude or delay our commercialization of a product. There can be no assurance that any products now in development, or that we may seek to develop in the future, will achieve technological feasibility, obtain regulatory approval or gain market acceptance.

We may encounter difficulties managing our growth, which could materially harm our business.

We expect to expand our operations and grow our research and development, product development, regulatory, manufacturing, sales, marketing and administrative operations. This expansion has placed, and is expected to continue to place, a significant strain on our management, operational and financial resources. To manage our growth and to develop and commercialize our products, we will be required to improve existing, and implement new, operational and financial systems, procedures and controls and expand, train and manage our growing employee base. In addition, we will need to manage relationships with various manufacturers, suppliers, customers and other organizations. Our ability to manage our operations and growth will require us to improve our operational, financial and management controls, as well as our internal reporting systems and controls. We may not be able to implement such improvements to our management information, disclosure controls and procedures and internal control systems in an efficient and timely manner and may discover deficiencies in existing systems and controls. Our failure to accomplish any of these tasks could materially harm our business.

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We depend on our executive officers and key personnel and the loss of them could adversely affect our business.

Our success depends upon the efforts and abilities of our executive officers and other key personnel, particularly Mr. Alan Shortall, our Chief Executive Officer, to provide strategic direction, manage our operations and maintain a cohesive and stable environment. Although we have employment agreements with Mr. Shortall and other key personnel, as well as incentive compensation plans that provide various economic incentives for them to remain with us, these agreements and incentives may not be sufficient to retain them. Our ability to operate successfully and manage our potential future growth also depends significantly upon our ability to attract, retain and motivate highly skilled and qualified research, technical, clinical, regulatory, sales, marketing, managerial and financial personnel. We face intense competition for such personnel, and we may not be able to attract, retain and motivate these individuals. The loss of our executive officers or other key personnel for any reason or our inability to hire, retain and motivate additional qualified personnel in the future could prevent us from sustaining or growing our business. In addition, we have a limited history of operations under our current officers and directors. Our officers have not worked together for an extensive length of time. If for any reason our management members cannot work efficiently as a team, our business will be adversely affected.

We will incur increased costs as a result of being a reporting company in both Australia and the United States and we have limited experience as a US reporting company.

We became subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, on February 11, 2010 when our registration statement on Form 10 became effective. Our shares of common stock are also listed on the ASX in the form of CDIs, and we are therefore required to file financial information and make certain other filings with the ASX. Our status as a reporting company in both Australia and the United States makes some activities more time-consuming and costly and causes us to incur additional legal, accounting and other expenses that we had not previously incurred, including costs related to compliance with the requirements of the Sarbanes-Oxley Act of 2002.

If our internal control over financial reporting or our disclosure controls and procedures are found not to be effective by management or by an independent registered public accounting firm or if we make disclosure of existing or potential significant deficiencies or material weaknesses in those controls, investors could lose confidence in our financial reports, the price of our shares of common stock may decline, and we may be subject to increased risks and liabilities.

We became a U.S. reporting company on February 11, 2010 and are subject to the Sarbanes-Oxley Act of 2002 and applicable rules and regulations thereunder. Section 404 of the Sarbanes-Oxley Act will require that we include a report of our management on our internal control over financial reporting and a report of our independent registered public accounting firm on the effectiveness of our internal control over financial reporting in our Annual Report on Form 10-K beginning with our annual report for the fiscal year ending June 30, 2011. We will also have to include quarterly reports and certifications of our management regarding the effectiveness of our disclosure controls and procedures. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent review, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our internal controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from the way we interpret them. Our management may also conclude that our disclosure controls and procedures are not effective.

If we fail to achieve and maintain an effective internal control environment and disclosure controls and procedures, we could suffer material misstatements in our financial statements and other information we report and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial and other information. This could lead to a decline in the trading price of our shares of common stock. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from Nasdaq, regulatory investigations and civil or criminal sanctions.

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We have limited sales, marketing and distribution experience.

We have a small internal team to support the training of appointed distributors in the marketing and clinical use of our Unitract 1mL syringes. Although we intend to expand this team as we commence sales of our Unitract 1mL syringes, appoint additional distributors and commercialize our larger-sized clinical syringes, we will have to devote significant financial and management resources to this effort. In developing our sales, marketing and distribution functions, we could face a number of risks, including:

•  we may not be able to attract and build a significant marketing or sales force;

•  the cost of establishing, training and providing regulatory oversight for a marketing or sales force may be substantial; and

•  there are significant legal and regulatory risks in medical device marketing and sales, and any failure to comply with all legal and regulatory requirements for sales, marketing and distribution could result in enforcement action by the FDA or other authorities that could jeopardize our ability to market our product(s) or could subject us to substantial liability.

We have outsourced the development of automated assembly systems for our Unifill syringe to Mikron Assembly Technology, a third-party contractor. Our ability to commercialize the Unifill syringe will be dependent on the ability of this contractor to provide these systems according to specifications and in a timely manner.

We have outsourced the development of automated assembly systems for our Unifill syringe to Mikron Assembly Technology, a third party equipment manufacturer. The development of a pilot system with a target production capacity of approximately 60 million units per year began in December 2009 with completion and installation scheduled during the fourth quarter of calendar 2010. Additional assembly lines with higher annual manufacturing capacity are expected to commission and operate beyond 2010. The failure of this company to supply these automated assembly systems to us which meet contracted specifications in a timely manner will significantly impair our business activities and the completion of the industrialization program.

If we experience delays in developing our new manufacturing facility, our ability to produce our Unifill syringe in commercial quantities would be impaired, which would harm our business. In addition, all of our current commercial and production activity takes place in one facility which subjects us to risk if we were to experience a catastrophic event at this facility.

We have a 50,000 square foot FDA-registered, medical device production facility in Lewisberry, Pennsylvania, for the production of the Unilife 1mL syringes and for the medical device contract manufacturing activities. However, we will need to expand our manufacturing capabilities in order to produce Unifill syringes and our other products in the quantities that may be necessary to meet anticipated market demand. We are in the process of developing additional manufacturing facilities in central Pennsylvania in conjunction with Keystone Redevelopment Group LLC, a Pennsylvania-based real estate company. We may not successfully complete the development of the new manufacturing facility in a timely manner, or at all. If we are unable to do so, we may not be able to produce our products in sufficient quantities to meet the requirements for the launch of the products or to meet future demand, if at all.

In addition, because all of our operations are currently conducted out of our Lewisberry facility, a catastrophic event, such as fire, natural disaster, pandemic, war, terrorism, labor disruption or governmental actions taken in response to such an event, could severely disrupt our business activities and adversely affect our results of operations and financial condition.

Our manufacturing facilities and the manufacturing facilities of our suppliers must comply with applicable regulatory requirements. If we or they fail to achieve or maintain regulatory approval for these manufacturing facilities, our business and our results of operations would be harmed.

Commercialization of our products requires access to, or the development of, manufacturing facilities that meet applicable regulatory standards to manufacture a sufficient supply of our products. In addition, the FDA must

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approve facilities that manufacture our products for US commercial purposes, as well as the manufacturing processes and specifications for the product. Suppliers of components of, and products used to manufacture, our products must also comply with FDA and foreign regulatory requirements, which often require significant time, money and record-keeping and quality assurance efforts and subject us and our suppliers to potential regulatory inspections and stoppages. We and our suppliers may not satisfy these requirements. If we or our suppliers do not achieve or maintain required regulatory approval for our manufacturing operations, our commercialization efforts could be delayed, which would harm our business and our results of operations.

The costs of raw materials have a significant impact on the level of expenses that we incur. If the prices of raw materials and related factors such as energy prices increase, and we cannot pass those price increases on to our customers, our results of operations and financial condition would suffer.

We use a number of raw materials including polymer plastics. The prices of many of these raw materials, such as those sourced from petroleum-based raw materials, are cyclical and volatile. While we would generally attempt to pass along increased costs to our customers in the form of sales price increases, we might not be able to do so, for competitive or contract-related reasons or otherwise. If we could not set our prices to reflect the costs of our raw materials, our results of operations and our financial condition would suffer.

Disruptions in the supply of key raw materials and difficulties in the supplier qualification process could adversely impact our operations.

We employ a supply chain management strategy which seeks to source components and materials from a number of established third party companies. Where possible, we seek to establish dual contracts for the supply of particular components or services. However, there is a risk that our supply lines may be interrupted in the event of a supplier production problem, material recall or financial difficulties. If one of our suppliers is unable to supply materials required for production of our products or our strategies for managing these risks are unsuccessful, we may be unable to complete the production of sufficient quantities of product to fulfill customer orders, or complete the qualification of new replacement materials for some programs in time to meet future production requirements. Prolonged disruptions in the supply of any of our key raw materials, difficulty in completing qualification of new sources of supply, or in implementing the use of replacement materials or new sources of supply, could have a material adverse effect on our results of operations, our financial condition or cash flows.

Some companies we may utilize for the supply of components are also competitors, and they could elect to cease supply relationships with us in the future for competitive reasons.

Some companies we may utilize for the supply of components for the Unifill syringe also develop and market their own safety products which can be attached onto standard prefilled syringes. These companies may elect to cease supply relationships with us in the future for competitive reasons. This may disrupt our supply chain, cause difficulties in the qualification of new sources of supply and impair our ability to supply customer orders. Such events may have a material adverse effect on our results of operations, our financial condition or cash flows.

The medical device industry is very competitive.

Competition in the medical device industry is intense. We face this competition from a wide range of companies. These include large medical device companies, most of which have greater financial and human resources, distribution channels and sales and marketing capabilities than we do. Our ability to compete effectively depends upon our ability to distinguish our company and our products from our competitors and their products. Factors affecting our competitive position include, for example, product design and performance, product safety, sales, marketing and distribution capabilities, success and timing of new product development and introductions and intellectual property protection.

We may be adversely impacted by next generation drug delivery technologies.

Much of our potential sales and potential profitability depends to a large extent on the sale of drug products delivered by subcutaneous or intramuscular injection. Other device companies, and pharmaceutical companies, are

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attempting to develop alternative therapies or drug administration systems such as needle-free or intradermal injection technology for the treatment or prevention of various diseases. The development of new or improved products, processes or technologies by other companies may render our products or proposed products obsolete or less competitive. If the products developed in the future by our customers or potential customers use another delivery system, our sales and potential profitability could suffer. Furthermore, we will be largely reliant upon the receipt of revenues from the sale of the Unifill syringe and the Unilife 1mL syringe and will not have the benefit of diversification.

We are subject to extensive regulation.

We are subject to extensive regulation by the FDA pursuant to the FDC Act, by comparable agencies in other countries, and by other regulatory agencies and governing bodies. Our products must receive clearance or approval from the FDA or counterpart non-U.S. regulatory agencies before they can be marketed or sold. The process for obtaining marketing approval or clearance may take a significant period of time and require the expenditure of substantial resources. The process may also require changes to our products or result in limitations on the indicated uses of the products. As a result, our expectations with respect to marketing approval or clearance may prove to be inaccurate and we may not be able to obtain marketing approval or clearance in a timely manner or at all. In addition, regulatory requirements outside the U.S. change frequently, requiring prompt action to maintain compliance, particularly when product modifications are required. Following the introduction of a product, these agencies also periodically review our manufacturing processes and product performance. Our failure to comply with the applicable good manufacturing practices, adverse event reporting, clinical trial and other requirements of these agencies could delay or prevent the production, marketing or sale of our products and result in fines, delays or suspensions of regulatory clearances, closure of manufacturing sites, seizures or recalls of products and damage to our reputation.

Future changes, if any, to the FDA 510(k) clearance or premarket approval processes may impact our ability to market and sell our products.

Before a new medical device, or a significant change involving a new use of or claim for an existing medical device, can be distributed commercially in the United States, it must receive either prior 510(k) clearance or premarket approval from the FDA, unless an exemption exists. Either process can be expensive and lengthy. We have received 510(k) clearance that covered the production of our Unitract 1mL insulin syringe by a contractor outside the United States as well as at our Pennsylvania manufacturing facility. Our Unifill syringe does not require 510(k) clearance because it will be sold to drug manufacturers for use as drug packaging. The premarket approval process does not apply to our current range of products. The FDA may, however, revise existing regulations or adopt additional regulations, each of which could prevent or delay 510(k) clearance or premarket approval of our new or modified devices, or could impact our ability to market our currently cleared devices. The FDA, for example, has recently announced its intention to review the 510(k) process and consider enhancements that could impact future 510(k) submissions. It has also encouraged manufacturers to consult with the FDA as to the appropriate 510(k) clearance process for any new product. Such changes could result in additional scrutiny by the FDA of 510(k) applications that we will submit for our new or modified devices and could result in delays and increased costs in obtaining FDA clearances, which could materially impact our business, financial condition and results of operations.

We may face significant uncertainty in the industry due to government healthcare reform.

The healthcare industry in the United States is subject to fundamental changes due to the ongoing healthcare reform and the political, economic and regulatory influences. In March 2010, comprehensive healthcare reform legislation was signed into law in the United States through the passage of the Patient Protection and Affordable Health Care Act and the Health Care and Education Reconciliation Act. Among other initiatives, the legislation provides for a 2.3% annual excise tax on the sales of certain medical devices in the United States, commencing in January 2013. This enacted excise tax may adversely affect our operating expenses and results of operations. In addition, various healthcare reform proposals have also emerged at the state level. We cannot predict with certainty what healthcare initiatives, if any, will be implemented at the state level, or what ultimate effect of federal healthcare

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reform or any future legislation or regulation may have on us or on our customers’ purchasing decisions regarding our products and services.

We are subject to regulation by governments around the world, and if these regulations are not complied with, existing and future operations may be curtailed, and we could be subject to liability.

The design, development, manufacturing, marketing and labeling of our products are subject to regulation by governmental authorities in the United States, Europe and other countries, including the FDA. The regulatory process can result in required modification or withdrawal of existing products and a substantial delay in the introduction of new products. Also, it is possible that regulatory approval may not be obtained for a new product. Our business may be adversely affected by changes in the regulation of drug products and medical devices.

Our target pharmaceutical customers are also subject to government regulations for the manufacturing, approval, marketing and labeling of therapeutic drug products. An effect of the governmental regulation of our customers’ injectable drug products and manufacturing processes is that compliance with regulations makes it costly and time consuming to transition to the use of our devices for existing products, or to secure approval for pipeline products targeted for use with our devices. If regulation of our customers’ products incorporating our devices increases over time, it is likely that this would adversely affect our sales and profitability.

Product defects could adversely affect the results of our operations.

The design, manufacture and marketing of medical devices involve certain inherent risks. Manufacturing or design defects, unanticipated use of our products, or inadequate disclosure of risks relating to the use of the product can lead to injury or other adverse events. These events could lead to recalls or safety alerts relating to our products (either voluntary or required by the FDA or similar governmental authorities in other countries), and could result, in certain cases, in the removal of a product from the market. Any recall could result in significant costs, as well as negative publicity and damage to our reputation that could reduce demand for our products. Personal injuries relating to the use of our products can also result in product liability claims being brought against us. In some circumstances, such adverse events could also cause delays in new product approvals.

We may be sued for product liability, which could adversely affect our business.

The design, manufacture and marketing of medical devices carries a significant risk of product liability claims. We may be held liable if any product we develop and commercialize causes injury or is found otherwise unsuitable during product testing, manufacturing, marketing, sale or consumer use. In addition, the safety studies we must perform and the regulatory approvals required to commercialize our medical safety products will not protect us from any such liability. We carry product liability insurance. However, if there were to be product liability claims against us, our insurance may be insufficient to cover the expense of defending against such claims, or may be insufficient to pay or settle such claims. Furthermore, we may be unable to obtain adequate product liability insurance coverage for commercial sales of any of our approved products. If such insurance is insufficient to protect us, our results of operations will suffer. If any product liability claim is made against us, our reputation and future sales will be damaged, even if we have adequate insurance coverage. We also intend to seek product liability insurance for any approved products that we may develop or acquire in the future. There is no guarantee that such coverage will be available when we seek it or at a reasonable cost to us.

We may not be able to effectively protect our intellectual property rights which could have an adverse effect on our business, financial condition or results of operations.

Our success depends in part on our ability to obtain and maintain protection in the United States and other countries of the intellectual property relating to or incorporated into our technology and products. Our intellectual property portfolio includes, in addition to trademarks and trade secrets, 26 granted patents in 14 countries, a significant number of patent applications pending in the United States, Australia and the countries covered under the Patent Cooperation Treaty. Our patents expire at various dates between 2018 and 2028. Our pending and future patent applications may not issue as patents or, if issued, may not issue in a form that will provide us with any competitive advantage. Even if issued, existing or future patents may be challenged, narrowed, invalidated or

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circumvented, which could limit our ability to stop competitors from marketing similar products or limit the length of terms of patent protection we may have for our products. Changes in patent laws or their interpretation in the United States and other countries could also diminish the value of our intellectual property or narrow the scope of our patent protection. In addition, the legal systems of certain countries do not favor the aggressive enforcement of patents, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. In order to preserve and enforce our patent and other intellectual property rights, we may need to make claims or file lawsuits against third parties. This can entail significant costs to us and divert our management’s attention from developing and commercializing our products.

Intellectual property litigation could be costly and disruptive to us.

The retractable syringe product lines in which we compete are relatively new inventions with numerous companies having patents. In recent years, there have been several patent infringement suits involving other industry participants. To-date, we have not been subject to any such patent infringement suits and also hold freedom to operate reports which we believe indicate that our technology and associated products are substantially different from other known patents. There is no assurance, however, that third parties will not assert any patent, copyright, trademark and other intellectual property rights to technologies used in our business. Any claims, with or without merit, could be time-consuming, result in costly litigation, divert the efforts of our technical and management personnel or require us to pay substantial damages. If we are unsuccessful in defending ourselves against these types of claims, we may be required to do one or more of the following:

•  stop, delay or abandon our ongoing or planned commercialization of the product that is the subject of the suit;

•  attempt to obtain a license to sell or use the relevant technology or substitute technology, which license may not be available on reasonable terms or at all; or

•  redesign those products that use the relevant technology.

If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.

In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes and know-how. We generally seek to protect this information by confidentiality agreements with our employees, consultants, scientific advisors and third parties. These agreements may be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise become known or be independently developed by competitors. To the extent that our employees, consultants or contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Impairment of our goodwill, which represents a significant portion of our total assets, would adversely affect our operating results and we may never realize the full value of our goodwill.

As of June 30, 2010, we have $10.8 million of goodwill, which represents 17% of our total assets recorded as a result of our acquisition activities. Goodwill is subject to, at a minimum, an annual impairment assessment of its carrying value. Any material impairment of our goodwill would likely have a material adverse impact on our results of operations.

Fluctuations in foreign currency exchange rates could adversely affect our financial condition and results of operations.

Currently, the majority of our revenues are derived from payments under our industrialization agreement with sanofi-aventis which provides that sanofi-aventis will pay us in euros, while we incur most of our operating expenses in U.S. dollars or Australian dollars. Changes in foreign currency exchange rates can affect the value of our assets and liabilities, and the amount of our revenues and expenses. We do not currently try to mitigate our

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exposure to currency exchange rate risks by using hedging transactions. We cannot predict future changes in foreign currency exchange rates, and as a result, we may suffer losses as a result of future fluctuations.

Risk Factors Related to Our Shares of Common Stock

The trading price of our shares of common stock may fluctuate significantly.

Our common stock has been listed on the Nasdaq since February 2010 and on the ASX in the form of CDIs since January 2010. The price of our shares of common stock may be volatile, which means that it could decline substantially within a short period of time. The trading price of the shares may fluctuate, and investors may experience a decrease in the value of the shares that they hold, sometimes regardless of our operating performance or prospects. The trading price of our common stock could fluctuate significantly for many reasons, including the following:

•  future announcements concerning our business and that of our competitors including in particular, the progress of our industrialization program for the Unifill syringe;

•  regulatory developments, enforcement actions bearing on advertising, marketing or sales of our current or pipeline products;

•  quarterly variations in operating results;

•  introduction of new products or changes in product pricing policies by us or our competitors;

•  acquisition or loss of significant customers, distributors or suppliers;

•  business acquisitions or divestitures;

•  changes in third party reimbursement practices;

•  fluctuations of investor interest in the medical device sector; and

•  fluctuations in the economy, world political events or general market conditions.

If there are substantial sales of our shares of common stock, our share price could decline.

As of September 15, 2010, we had 55,230,454 shares of common stock issued and outstanding. All of those shares of common stock other than 4,735,314 shares held by our affiliates, are freely tradable under the Securities Act. Shares held by our affiliates are eligible for resale pursuant to Rule 144. If our stockholders sell a large number of shares of common stock or the public market perceives that our stockholders might sell a large number of shares, the prices at which our common stock trades could decline significantly.

In addition, as of September 15, 2010, 10,129,404 shares of our common stock are subject to outstanding stock options. We have filed a registration statement on Form S-8 to cover the issuance of 9,151,667 shares of our common stock that are issuable upon the exercise of outstanding options. During June 2010, our registration statement on Form S-1 was declared effective to cover the resale of 5,444,633 shares of our common stock that are issuable upon the exercise of options not eligible for inclusion in our registration statement on Form S-8. The exercise of those options may have a dilutive effect on current stockholders and if those parties exercising their options choose to sell their shares, it could have an adverse effect on the market price for our shares.

We do not intend to pay cash dividends in the foreseeable future.

For the foreseeable future, we do not intend to declare or pay any dividends on our common stock. We intend to retain our earnings, if any, to finance the development and expansion of our business and product lines. Any future decision to declare or pay dividends will be made by our board of directors and will depend upon a number of factors including our financial condition and results of operations. In addition, under our current bank financing agreements, we are not permitted to pay cash dividends without the prior written consent of the lender.

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We may be subject to arbitrage risks.

Investors may seek to profit by exploiting the difference, if any, in the price of our shares of common stock on the Nasdaq and on the ASX. Such arbitrage activities could cause our stock price in the market with the higher value to decrease to the price set by the market with the lower value.

Our certificate of incorporation, bylaws, the Delaware General Corporation Law and the terms of our industrialization agreement with sanofi-aventis may delay or deter a change of control transaction.

Certain provisions of our certificate of incorporation and bylaws may have the effect of deterring takeovers, such as those provisions authorizing our board of directors to issue, from time to time, any series of preferred stock and fix the designation, powers, preferences and rights of the shares of such series of preferred stock; prohibiting stockholders from acting by written consent in lieu of a meeting; requiring advance notice of stockholder intention to put forth director nominees or bring up other business at a stockholders’ meeting; prohibiting stockholders from calling a special meeting of stockholders; requiring a 662/3% majority stockholder approval in order for stockholders to amend our bylaws or adopt new bylaws; and providing that, subject to the rights of preferred shares, the number of directors is to be fixed exclusively by our board of directors. Section 203 of the Delaware General Corporation Law, from which we did not elect to opt out, provides that if a holder acquires 15% or more of our stock without prior approval of our board of directors, that holder will be subject to certain restrictions on its ability to acquire us within three years. In addition, our industrialization agreement with sanofi-aventis provides to sanofi-aventis the right to match a change of control proposal and to terminate the industrialization agreement under certain circumstances of a change of control event. See “Business — Strategic Partnership with sanofi-aventis”. These provisions may delay or deter a change of control of us, and could limit the price that investors might be willing to pay in the future for shares of our common stock.

Item 1B.   Unresolved Staff Comments

None.

Item 2.   Properties

We currently lease approximately 50,000 square feet of a building in Lewisberry, Pennsylvania under an operating lease expiring in August 2012 of which approximately 6,000 square feet are being used as our executive offices and the remaining 44,000 square feet are being used as our manufacturing facility and warehouse. The manufacturing facility is an FDA-registered medical device production facility. This facility has two class-eight clean rooms. The first clean room houses a fully automated assembly system used to manufacture our Unitract 1mL syringes. The other clean room is used to assemble non-proprietary medical devices under contract for outsourcing customers. Other areas of the manufacturing facility are used for offices, product design and prototyping, engineering activities and the construction of automated assembly systems.

We have also entered into a short-term lease for a small office building near our main facility. This office building is used for engineering and product development.

We also occupy an office of 1,100 square feet in Sydney, Australia under a lease expiring in November 2010. This office space is used for certain finance and administrative operations in Australia.

Development of New Global Headquarters and Manufacturing Facility

To support our business expansion activities, we are in the process of developing a new global headquarters and manufacturing facility in Pennsylvania in order to accommodate our projected demand for the Unifill syringe. We, through our subsidiary Unilife Cross Farm, LLC, or Unilife CF, purchased a 38 acre block of land in York County, Pennsylvania from Greenspring Partners, LP in November 2009. The site is located approximately 9.5 miles from our current premises in Lewisberry, Pennsylvania. On the property, we are developing an approximately 165,000 square foot office, manufacturing, warehousing and distribution facility. The new facility is initially intended to accommodate Unifill automated assembly lines with a combined annual capacity of 360 million units per year, as well as the Unitract 1mL automated assembly line and other contract manufacturing systems currently

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situated at our Lewisberry facility. The new facility will also include a 54,000 square foot office section that will function as our global headquarters and support administrative, marketing, new product development, quality laboratories and other operational functions. The new facility has been designed to allow for an additional 100,000 square feet of contiguous production space to be constructed when required at a later date by us. Upon this additional expansion occurring, it will provide us with the space required to produce up to one billion syringes annually via the installation of additional Unifill assembly lines. Although this additional expansion of the new facility forms part of the current planning approvals that have been received by us, it is not part of the current development activity.

We have retained Keystone Redevelopment Group LLC, or Keystone, a Pennsylvania-based real estate company specializing in large scale redevelopment and complex economic development projects, as the developer for the new facility. Keystone is assisting us in securing financing for the new facility and providing us with certain related consulting and other services. We have retained HSC Builders & Construction Managers (HSC) of Pennsylvania, a Pennsylvania-based company that specializes in building custom-designed facilities for biotech, academic, healthcare, pharmaceutical and technology companies, as the construction manager and constructor of the new facility. We have retained L2 Architecture, or L2, a Philadelphia-based architectural and engineering design firm that specializes in the pharmaceutical and medical device sector, to provide architectural design and structural, mechanical and electrical engineering services for the new facility.

We estimate the total cost for developing the new facility to be approximately $31.0 million, including approved change orders through September 15, 2010. We intend to secure external financing for up to approximately $20.2 million from a commercial bank or other lending institution in the U.S. and/or from the Commonwealth of Pennsylvania or other federal and state bodies and fund the balance through existing cash reserves.

The projected timetable for the construction of the new facility to be undertaken by HSC is as follows:

Date	Activity
By the end of June 2010	Completion of utility rooms for equipment installation
By the end of October 2010	Completion of clean rooms for equipment installation (Phase 1)
By the end of October 2010	Temporary occupancy permit for manufacturing/warehouse
By the end of December 2010	Unrestricted occupancy permit for manufacturing/warehouse (Phase 2)
By the end of December 2010	Unrestricted occupancy permit for office

Item 3.   Legal Proceedings

In the ordinary course of our business, we may be subject to various claims, pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. We are not aware of any material pending legal proceedings to which we or any of our subsidiaries is a party or of which any of our properties is the subject.

Item 4.   Removed and Reserved

PART II

Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Commencing February 16, 2010, our shares of common stock began trading on the Nasdaq Global Market under the symbol “UNIS”. Our shares of common stock have also traded in the form of CHESS Depositary Interests (“CDIs”), each CDI representing one-sixth of a share of our common stock, on the Australian Securities Exchange (“ASX”) under the symbol “UNS” since January 18, 2010. Prior to that date, the ordinary shares of our predecessor Unilife Medical Solutions Limited (“UMSL”) were traded on the ASX under the symbol “UNI”.

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The following table sets forth, for the periods indicated, the high and low closing prices for our common stock on the Nasdaq Global Market (commencing February 16, 2010), the high and low closing prices for our CDIs on the ASX (from January 18, 2010 through February 15, 2010) and the high and low closing prices for the ordinary shares of UMSL (prior to January 18, 2010). The prices of our CDIs (and previously ordinary shares of UMSL) have been adjusted to give effect to the six for one exchange ratio and have been converted to U.S. dollars using the exchange rate on the last day of each respective quarter.

Period	High		Low
	(US$)		(US$)
Fiscal Year 2010:
First Quarter		7.20		1.62
Second Quarter		6.30		4.68
Third Quarter		17.90		5.04
Fourth Quarter		8.04		5.28
Fiscal Year 2009:
First Quarter		2.04		1.26
Second Quarter		1.20		0.72
Third Quarter		1.14		0.96
Fourth Quarter		1.50		1.20

Holders

As of September 15, 2010, we had 55,230,454 shares of common stock issued and outstanding, and there were 171 holders of record of our common stock, including Chess Depositary Nominees which held shares of our common stock on behalf of 8,226 CDI holders. The closing sales price for our common stock on September 15, 2010 was $5.59 as reported by the Nasdaq Global Market.

Dividends

We currently intend to retain any earnings to finance research and development and the operation and expansion of our business and do not anticipate paying any cash dividends for the foreseeable future. The declaration and payment of any dividends in the future by us will be subject to the sole discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, capital requirements of our operating subsidiaries, covenants associated with certain of our debt obligations, legal requirements, regulatory constraints and other factors deemed relevant by our board of directors. Moreover, if we determine to pay any dividend in the future, there can be no assurance that we will continue to pay such dividends. In addition, under our bank financing agreements, we are not permitted to pay cash dividends without the prior written consent of the lender.

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Equity Compensation Plan Information

The following table provides information as of June 30, 2010 with respect to our equity compensation plans. See Note 4 to our consolidated financial statements included elsewhere is this Annual Report on Form 10-K for further information.

						Number of Securities
						Remaining Available for
	Number of Securities					Future Issuance Under
	to be Issued Upon			Weighted Average		Equity Compensation
	Exercise of			Exercise Price of		Plans (Excluding
	Outstanding Options,			Outstanding Options,		Securities Reflected in
Plan Category	Warrants and Rights			Warrants and Rights		Column (a))
	(a)			(b)		(c)
Equity compensation plans approved by security holders
Employee Share Option Plan		2,914,700		$	2.16		—	(1)
2009 Stock Incentive Plan		2,144,000	(2)		5.89		2,038,000	(3)
Agreement with individual consultant		83,333			2.57		—
2009 private placement options		3,643,430			7.81		—
Equity compensation plans not approved by security holders Individual agreements with various consultants, advisors and other third parties		1,628,880			1.61		—
Total		10,414,343		$	4.82		2,038,000

(1)	No further options will be granted under this plan.
(2)	Represents the number of shares issuable upon exercise of outstanding options under the 2009 Stock Incentive Plan. In addition, there are 1,818,000 non-vested shares (and no vested shares) pursuant to restricted stock awards under the 2009 Stock Incentive Plan.
(3)	Represents the number of shares available for future issuance pursuant to stock option, restricted stock and other awards under the 2009 Stock Incentive Plan. The number of shares available for issuance under the 2009 Stock Incentive Plan adjusts annually commencing on January 1, 2011 as provided therein.

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Performance Graph

The performance graph shown below compares the change in cumulative total shareholder return on shares of common stock with the Nasdaq Stock Market Index (US) and the NASDAQ Health Care Index (US) from February 16, 2010, our first day of trading on the Nasdaq Global Market, through our fiscal 2010 year ended June 30, 2010. The graph sets the beginning value of shares of common stock and the indices at $100, and assumes that all quarterly dividends were reinvested at the time of payment. This graph does not forecast future performance of shares of common stock.

ASX-Required Disclosure

Corporations Act 2001 (Cth) and Repurchases of Securities

We are not subject to Chapters 6, 6A, 6B and 6C of the Corporations Act dealing with the acquisition of our shares (in particular, relating to substantial shareholdings and takeovers).

Under the Delaware General Corporation Law, we are generally permitted to purchase or redeem our outstanding shares out of funds legally available for that purpose without obtaining stockholder approval, provided that (i) our capital is not impaired; (ii) such purchase or redemption would not cause our capital to become impaired; (iii) the purchase price does not exceed the price at which the shares are redeemable at our option and (iv) immediately following any such redemption, we shall have outstanding one or more shares of one or more classes or series of stock, which shares shall have full voting powers. Our certificate of incorporation does not create any further limitation on our purchase or redemption of our shares.

Australian Disclosure Requirements

As part of our ASX listing, we are required to comply with various disclosure requirements as set out under the ASX Listing Rules. The following information is intended to comply with the ASX Listing Rules and is not intended to fulfill information required by this Annual Report on Form 10-K.

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Comparative Performance Graph

The performance graph shown below compares the change in cumulative total shareholder return of Unilife Corporation’s Chess Depository Interest (CDI), the ASX All Ordinaries Index and the S&P/ASX 200 Health Care Index for the five year period ended June 30, 2010. The graph sets the beginning value of shares of CDIs and the indices at $100, and assumes that all quarterly dividends were reinvested at the time of payment. This graph does not forecast future performance of shares of the Company’s common stock or CDIs.

Distribution of Equity Security Holders as of September 15, 2010

	CDIs
	Number of		Number of
	Holders		CDIs
1 — 1,000		1,396		805,319
1,001 — 5,000		2,655		7,780,130
5,001 — 10,000		1,299		10,405,713
10,001 — 100,000		2,445		77,381,037
100,001 — and over		431		148,398,083
		8,226		244,770,282

The number of shareholders holding less than a marketable parcel of shares was 645 as of September 15, 2010.

There is no current buy-back of the Company’s securities.

General Information

The name of the Company Secretary is Mr. J. Christopher Naftzger.

The address of the principal registered office in Australia is Suite 3, Level 11, 1 Chifley Square, Sydney NSW 2000. The ASX Liaison Officer is Mr. Jeff Carter.

Registers of securities are held at Computershare Investor Services Pty Limited, Level 2, 45 St Georges Terrace Perth WA 6000 Australia, Investor Enquiries +61 8 9323 2000 (within Australia) +61 3 9415 4677 (outside Australia).

Voting Rights

Unilife’s by-laws provide that each stockholder has one vote for every share of common stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share of stock entitled to vote so held, unless otherwise provided by Delaware General Corporation Law or in the certificate of incorporation.

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If holders of CDIs wish to attend Unilife’s general meetings, they will be able to do so. Under the ASX Listing Rules, Unilife, as an issuer of CDIs, must allow CDI holders to attend any meeting of the holders of the underlying securities unless relevant U.S. law at the time of the meeting prevents CDI holders from attending those meetings.

In order to vote at such meetings, CDI holders have the following options:

(a) instructing CDN, as the legal owner, to vote the Unilife Shares underlying their CDIs in a particular manner. The instruction form must be completed and returned to Unilife’s share registry prior to the meeting;

(b) informing Unilife that they wish to nominate themselves or another person to be appointed as CDN’s proxy for the purposes of attending and voting at the general meeting;

(c) converting their CDIs into a holding of Unilife and voting these at the meeting (however, if thereafter the former CDI holder wishes to sell their investment on ASX, it would be necessary to convert Unilife Shares back to CDIs).

As holders of CDIs will not appear on Unilife’s share register as the legal holders of Unilife Shares, they will not be entitled to vote at a Unilife shareholder meetings unless one of the above steps is undertaken.

Proxy forms and details of these alternatives will be included in each notice of meeting sent to CDI holders by Unilife.

Holders of options are not entitled to vote.

Australian Corporate Governance Statement

The Board of Directors and employees of Unilife Corporation (“Unilife” or the “Company”) are committed to developing, promoting and maintaining a strong culture of good corporate governance and ethical conduct.

The Board of Directors confirms that the Company’s corporate governance framework is generally consistent with the Australian Securities Exchange’s (“ASX”) Corporate Governance Council’s “Corporate Governance Principles and Recommendations (2nd Edition)” (“ASX Governance Recommendations”), other than as set out below. To this end, the Company provides below a review of its governance framework using the same numbering as adopted for the Principles as set out in the ASX Governance Recommendations.

Copies of the Company’s charters, codes and policies may be downloaded from the corporate governance section of the Unilife website (www.unilife.com).

The Company redomiciled to the United States in January 2010 and listed on Nasdaq in February 2010. As a result and to meet Nasdaq listing requirements, the policies and practices adopted by the Company are predominantly “U.S.-focused”.

Principle 1 — Lay solid foundations for management and oversight

Recommendation 1.1 — Establish the functions reserved to the board and those delegated to senior executives and disclose those functions

The primary responsibility of:

(a) the Board of Directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its stockholders; and

(b) the Chief Executive Officer is to oversee the day-to-day performance of Unilife (pursuant to Board delegated powers).

The Board’s responsibilities are recognized and documented on an aggregated basis via the Charter of the Board of Directors, which is available on the corporate governance section of the Company’s website.

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While day-to-day management has been delegated to the Chief Executive Officer, it is noted that the following matters are specifically reserved for the attention of the Board:

(a) providing input into and final approval of management’s development of corporate strategy and performance objectives;

(b) reviewing, ratifying and monitoring systems of risk management and internal control, codes of conduct, and legal compliance;

(c) ensuring appropriate resources are available to senior executives;

(d) approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestments; and

(e) approving and monitoring financial and other reporting.

Recommendation 1.2 — Disclose the process for evaluating the performance of senior executives

This Annual Report on Form 10-K includes extensive discussions in relation to the mechanics concerning the evaluation of performance of the Company’s senior executives, including relevant benchmarking activities. Information regarding executive compensation for the fiscal year ended June 30, 2010, as required by Item 11, is included in this report, including the information set forth under the captions “Executive Compensation,” “Compensation of Directors” and “Compensation Committee Interlocks and Insider Participation.”

Recommendation 1.3 — Disclosure of information under Principle 1 of the ASX Governance Recommendations

Reporting Requirement

The Company fully complied with Recommendation 1.1 to 1.3 during the fiscal year ended June 30, 2010.

Principle 2 — Structure the Board to add value

Recommendation 2.1 — A majority of the board should be independent directors

Recommendation 2.2 — The chair should be an independent director

Recommendation 2.3 — The roles of Chairman and Chief Executive Officer should not be exercised by the same individual

The Board of Directors is currently comprised of seven directors. The seven directors include six non-executive directors (including the Chairman of the Board) and one executive director (being the Chief Executive Officer) with the role of Chairman and Chief Executive Officer being exercised by different individuals. Five of the six non-executive directors are “independent” as defined in the Nasdaq listing rules.

At the Company’s expense, the Board collectively or directors (acting as individuals) are entitled to seek advice from independent external advisers in relation to any matter which is considered necessary to fulfill their relevant duties and responsibilities. Individual directors seeking such advice must obtain the approval of the Chairman. Any advice so obtained will be made available to the Board.

Recommendation 2.4 — The board should establish a nomination committee

The Company has established a Nominating and Corporate Governance Committee which consists of all independent directors (including the Chairman of the Nominating and Corporate Governance Committee).The members of the Nominating and Corporate Governance Committee are Mr. Bosnjak, Mr. Lund, Mr. Galle and Mr. Firestone (Chair). A copy of the Nominating and Corporate Governance Committee Charter is available on the corporate governance section of the Company’s website.

Reporting Requirement

The Company fully complied with Recommendation 2.1 to 2.4 during the fiscal year ended June 30, 2010.

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Recommendation 2.5 — Disclose the process for evaluating the performance of the Board, its committees and individual directors

Reporting Requirement

The Company is at the early-stage of industrialization for its Unifill syringe. As such, the Company has not undertaken a formal review of the performance of the Board, its committees or individual directors. The Company has not therefore complied with Recommendation 2.5 during the fiscal year ended June 30, 2010.

Recommendation 2.6 — Disclosure of information under Principle 2 of the ASX Governance Recommendations

Reporting Requirement

Information regarding Directors, including biographical information, as required by Item 10, and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” as required by Item 12 are included in this Annual Report on Form 10-K.

Principle 3 — Promote ethical and responsible decision-making

Recommendation 3.1 — Establish a Code of Conduct and disclose it.

The Company has adopted a Code of Business Conduct and Ethics which is available on the corporate governance section of the Company’s website.

Recommendation 3.2 — Establish a policy concerning trading in Company securities by directors, senior executives and employees and disclose it

The Company has adopted an Insider Trading Policy which is available on the corporate governance section of the Company’s website.

Recommendation 3.3 — Disclosure of information under Principle 3 of the ASX Governance Recommendations

Reporting Requirement

The Company fully complied with Recommendation 3.1 to 3.3 during the fiscal year ended June 30, 2010.

Principle 4 — Safeguard integrity in financial reporting

Recommendation 4.1 — The Board should establish an Audit Committee

Recommendation 4.2 — The Audit Committee should: (a) consist of non-executive directors only; (b) consist of a majority of independent directors; (c) be chaired by an independent chair who is not chair of the Board; and (d) have at least three members

Recommendation 4.3 — The Audit Committee should have a formal charter

The Company has established an Audit Committee which consists only of non-executive directors all of whom are independent (including the Chairman of the Audit Committee). The members of the Audit Committee are Mr. Bosnjak, Mr. Lund (Chair) and Ms. Wold.

The Audit Committee Charter is available on the corporate governance section of the Company’s website.

Reporting Requirement

The Company fully complied with Recommendation 4.1 to 4.3 during the fiscal year ended June 30, 2010.

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Recommendation 4.4 — Disclosure of information under Principle 4 of the ASX Governance Recommendations

Reporting Requirement

In Item 10 of this Annual Report on Form 10-K, the Company has disclosed information regarding the skills, experience and expertise of directors, including audit committee members, in accordance with U.S. disclosure requirements.

In Item 9A of this Annual Report on Form 10-K, we have disclosed information regarding the Company’s Controls and Procedures, including management’s evaluation of the effectiveness of our disclosure controls and procedures and management’s evaluation of the effectiveness of our internal control over financial reporting.

Principle 5 — Make timely and balanced disclosure

Recommendation 5.1 — Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies

Recommendation 5.2 — Disclosure of information under Principle 5 of the ASX Governance Recommendations

Unilife is committed to providing timely and balanced disclosure to the market and, in consequence, to meeting its continuous disclosure requirements. The Company established a Disclosure Committee for the purpose of ensuring significant matters requiring public disclosure are communicated to management and disclosed in a timely manner.

In accordance with its commitment to fully comply with its continuous disclosure requirements, the Company has adopted a Continuous Disclosure Policy, together with other internal mechanisms and reporting requirements.

Reporting Requirement

The Company fully complied with Recommendation 5.1 and 5.2 during the fiscal year ended June 30, 2010.

Principle 6 — Respect the rights of shareholders

Recommendation 6.1 — Design a communications policy for promoting effective communication with shareholders and encourage their participation at stockholder’s meetings and disclose those policies

Recommendation 6.2 — Disclosure of information under Principle 6 of the ASX Governance Recommendations

While the Company has not adopted a formal communications policy as recommended under Recommendation 6.1, the Company communicates information to shareholders through a range of media including annual reports, public (ASX and SEC) announcements and via the Company’s website. Key financial information and stock performance are also available on the Company’s website. Shareholders can raise questions with the Company by contacting the Company via telephone, facsimile, post or email, with relevant contact details being available on the Company’s website.

All shareholders are invited to attend the Company’s Annual Meeting of Stockholders, either in person or by proxy. The Board regards the Annual Meeting as an excellent forum in which to discuss issues relevant to the Company and thereby encourages full participation by shareholders. Shareholders have an opportunity to submit questions to the Board and the Company’s auditors. The meeting is also webcast to provide access to those shareholders who are unable to attend the Annual Meeting.

Reporting requirement

Save as set out above, the Company fully complied with Recommendation 6.1 and 6.2 for the fiscal year ended June 30, 2010.

Principle 7 — Recognize and manage risk

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Recommendation 7.1 — Establish policies for the oversight and management of material business risks and disclose it

The risks that the Company faces are continually changing in line with the development of the Company. The primary risks faced by the Company during 2010 included liquidity or funding risk and operational risks associated with the finalization of the Company’s industrialization of its Unifill syringe.

The Company operates in an environment where it is required to actively manage fundamental risks such as the integrity of the Company’s intellectual property portfolio, disaster management, exchange rate risk and the risk of losing key management personnel.

In simple terms, risk is inherent in all business activities undertaken by Unilife. Unfortunately, many of these risks are beyond the control of the Company and, as such, it is important that risk be mitigated on a continuous basis, particularly if the Company is to preserve shareholder value.

The Board of Directors has approved a Risk Management Policy, which is designed to ensure that risks including, amongst others, technology risks, economic risks, financial risks and other operational risks are identified, evaluated and mitigated to enable the achievement of the Company’s goals.

Reporting requirement

The Company fully complied with Recommendation 7.1 for the fiscal year ended June 30, 2010.

Recommendation 7.2 — Require management to design and implement the risk management and internal control system to manage the Company’s material business risks and report to it whether those risks are being managed effectively (and makes disclosures therein); Disclose that management has reported to the Board as to the effectiveness of the Company’s management of its material business risks

Management provides the Board with frequent (i.e. generally monthly) updates on the state of the Company’s business, including the risks that the Company faces from time-to-time. This update includes up-to-date financial information, operational activity, clinical status and competitor updates. These updates are founded on internal communications that are fostered internally through weekly management meetings and other internal communications. These processes operate in addition to the Company’s Quality System, complaint handling processes, employee policies and standard operating procedures.

The Risk Management Policy also requires that, the Chief Executive Officer and the Chief Financial Officer will, at least on an annual basis, provide written assurances to the Board in writing that:

•  all assurances given by management in respect of the integrity of financial statements are founded on sound systems of risk management and internal compliance and control which implements the policies adopted by the Board; and

•  the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

In addition, the Board of Directors holds regular meetings for the purposes of discussing and reviewing operational developments.

The Company fully complied with Recommendation 7.2 for the fiscal year ended June 30, 2010.

Recommendation 7.3 — Disclose whether the Board has received assurance from the Chief Executive Officer and the Chief Financial Officer that the declaration under Section 295A of the Corporations Act is founded on a sound system of risk management and internal control and is operating effectively in all material respects in relation to financial reporting risks

Reporting requirement

As the Company prepares and files its financial statements under U.S. accounting practices and laws, management is required to provide representations to the Board on a wide range of issues, including in relation to

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the effectiveness of the Company’s disclosure controls and procedures as well as the design or operation of internal control over financial reporting. However, as the Company is incorporated in the US and is not bound by certain financial reporting provisions under the Australian Corporations Act 2001 (Cth) no declaration is required under Section 295A of the Corporations Act. To this end, shareholders’ attention is drawn to Item 9A. of this Annual Report on Form 10-K and the certifications provided by the Chief Executive Officer and the Chief Financial Officer at the end of the Form 10-K. As stated above, Item 9A of this Annual Report on Form 10-K discloses information regarding the Company’s controls and procedures, including management’s evaluation of the effectiveness of our disclosure controls and procedures and management’s evaluation of the effectiveness of our internal control over financial reporting.

For the reasons stated above, the Company has not complied with Recommendation 7.3 for the fiscal year ended June 30, 2010.

Recommendation 7.4 — Disclosure of information under Principle 7 of the ASX Governance Recommendations

Reporting requirement

Except as disclosed above, the Company believes that the aforementioned reporting meets, or exceeds, the requirements of Recommendation 7.2 to 7.4 for the fiscal year ended June 30, 2010.

Principle 8 — Remunerate fairly and responsibly

Recommendation 8.1 — Establish a Remuneration Committee

The Company has established a Compensation Committee which consists of solely independent directors (including the Chairman of the Compensation Committee). The members of the Compensation Committee are Mr. Bosnjak (Chair), Mr. Galle and Mr. Lund. A copy of the Compensation Committee Charter is available on the corporate governance section of the Company’s website.

Recommendation 8.2 — Clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives

As noted above in the discussion regarding Recommendation 1.2, Item 11 of this Annual Report on Form 10-K includes disclosure relating to the structure of non-executive director’s, executive director’s and senior executives remuneration practices and policies, including its annual performance review process, its external benchmarking review and its meritorious approach to employee performance.

Reporting requirement

As previously disclosed no review or other form of assessment has been undertaken in relation to the directors.

Recommendation 8.3 — Disclosure of information under Principle 8 of the ASX Governance Recommendations

With the exception noted above, the Company complied with the Recommendation 8.1 to 8.3 during the year ended June 30,2010.

This report is made in accordance with a resolution of the Board of Directors.

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Item 6.   Selected Financial Data

The following table presents our selected historical financial data as of and for each of the years in the five year period ended June 30, 2010. The statement of operations data for the years ended June 30, 2010, 2009 and 2008 and the balance sheet data as of June 30, 2010 and 2009 have been derived from our audited consolidated financial statements included elsewhere in this report. All such data should be read in conjunction with the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the related notes thereto included elsewhere in this report. The statement of operations data for the years ended June 30, 2007 and 2006 and the balance sheet data as of June 30, 2008, 2007 and 2006 have been derived from our consolidated financial statements not included in this Annual Report on Form 10-K.

	Year Ended June 30,
	2010			2009			2008			2007(b)			2006
	(In thousands)
Statement of Operations Data:
Revenues(a)	$	11,422		$	19,976		$	3,500		$	2,070		$	112
Net loss		(29,748	)		(517	)		(8,537	)		(8,969	)		(8,220	)
Basic loss per share		(0.64	)		(0.02	)		(0.26	)		(0.38	)		(0.35	)
Diluted loss per share		(0.64	)		(0.02	)		(0.26	)		(0.38	)		(0.35	)
Balance Sheet Data (end of period):
Total assets	$	64,817		$	32,212		$	18,499		$	16,926		$	9,953
Long-term debt, including current portion		2,741			3,133			7,209			4,261			106

(a)	Includes $8.9 million and $16.1 million in connection with our exclusive licensing agreement and our industrialization agreement with sanofi-aventis in the years ended June 30, 2010 and 2009, respectively. .
(b)	Includes the results of Integrated BioSciences, Inc. since we acquired it on January 1, 2007.

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion and analysis includes certain forward-looking statements that involve risks, uncertainties and assumptions. You should review the “Risk Factors” section of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by such forward-looking statements. See “Cautionary Note Regarding Forward-Looking Information” at the beginning of this report. References to our fiscal year refer to the fiscal year ending June 30.

Redomiciliation

On January 27, 2010, Unilife Medical Solutions Limited, an Australian corporation (“UMSL”), completed a redomiciliation from Australia to the State of Delaware pursuant to which stockholders and option holders of UMSL exchanged their interests in UMSL for equivalent interests in Unilife Corporation, a Delaware corporation (“Unilife”) and Unilife became the parent company of UMSL and its subsidiaries. The redomiciliation was conducted by way of schemes of arrangement under Australian law. The issuance of Unilife common stock and stock options under the schemes of arrangement was exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended. The redomiciliation was approved by the Australian Federal Court, and approved by UMSL shareholders and option holders.

In connection with the redomiciliation, holders of UMSL ordinary shares or share options received one share of Unilife common stock or an option to purchase one share of Unilife common stock, for every six UMSL ordinary shares or share options, respectively, held by such holders, unless the holder elected to receive in lieu of Unilife common stock, Chess Depositary Interests of Unilife, or CDIs (each representing one-sixth of one share of Unilife common stock), in which case such holder received one CDI for every UMSL ordinary share. All share and per

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share amounts in this Annual Report on Form 10-K have been restated to reflect the one for six share recapitalization effected in connection with the redomiciliation.

On February 16, 2010, Unilife’s common stock began trading on the Nasdaq Global Market under the symbol “UNIS.”

Overview

We are a U.S.-based medical device company focused on the design, development, manufacture and supply of a proprietary range of retractable syringes. Primary target customers for our products include pharmaceutical manufacturers and suppliers of medical equipment to healthcare facilities and distributors to patients who self-administer prescription medication. All of our syringes incorporate automatic and fully-integrated safety features which are designed to protect those at risk of needlestick injuries and other unsafe injection practices.

Our main product is the Unifill ready-to-fill syringe, which is designed to be supplied to pharmaceutical manufacturers in a form that is ready for filling with their injectable drugs and vaccines. We have a strategic partnership with sanofi-aventis, a large global pharmaceutical company, pursuant to which sanofi-aventis has paid us a 10.0 million euro exclusivity fee and has paid us 15.0 million euros and committed to pay us up to an additional 2.0 million euros to fund our industrialization program for the Unifill syringe. Upon the scheduled completion of the industrialization program in late 2010, we expect to commence the supply and sale of the Unifill syringe to sanofi-aventis. We are also in discussions with other pharmaceutical companies that are seeking to obtain access to the Unifill syringe.

In addition, we have recently begun to manufacture our Unitract 1mL insulin syringes at our FDA-registered manufacturing facility in Lewisberry, Pennsylvania which we released during July 2010. Our Unitract 1mL syringes are designed primarily for use in healthcare facilities and by patients who self-administer prescription medication such as insulin.

Recent Developments

Pennsylvania Economic Development Assistance

In October 2009, we accepted a $5.45 million offer of assistance from the Commonwealth of Pennsylvania. The offer includes $2.0 million for debt service related to the acquisition of land for our new global headquarters and manufacturing facility as well as up to $2.25 million in low-interest financing loans for land, building and acquisition costs. The offer also includes a $0.5 million opportunity grant as well as $0.5 million in tax credits. Finally, the offer includes up to $0.2 million for the reimbursement of eligible job training costs. The offer is based on our proposed project being expected to create more than 240 new full-time jobs by December 31, 2012, to retain our 87 existing employees and to have a total cost of $86.0 million and is contingent upon us submitting complete applications for each of these programs. As the offer of assistance requires us to make formal applications for these programs, there may be a number of contingencies relating to the amount, if any, of funds that we may receive, the period over which we may receive those funds and our right to retain any funds that we do receive. We may have obligations under the programs that we may be unable to fulfill. We expect that these contingencies and our obligations under the programs will be more clearly identified during the application process. As a result, at this time, we cannot assure you that we will receive or have the right to retain all or any of the assistance for our current development project or otherwise.

Development of New Global Headquarters and Manufacturing Facility

In November 2009, we acquired 38 acres of land in York County, Pennsylvania for $2.0 million and entered into a development agreement with Keystone Redevelopment Group, LLC (“Keystone’) to develop our new 165,000 square foot office, manufacturing, warehousing and distribution facility. In accordance with the agreement, Keystone is assisting us with the selection of, as well as the review and management of, architects, engineers, designers, contractors and other experts and consultants engaged to assist in the development of the new facility. Additionally, Keystone is assisting us in obtaining financing for the facility. Under the terms of the agreement, we will pay Keystone a total of $0.8 million.

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We have also entered into a construction agreement for the new facility for a total of 1.25% of the cost of work, which is estimated to be $0.3 million, and an agreement with an architectural firm for design and structural, mechanical, and electrical engineering services for the new facility for a total cost of $1.6 million.

We estimate the cost of the facility to be approximately $31.0 million, including approved change orders through September 15, 2010. This includes the projected construction costs, the projected manufacturing facility fit out costs and the fees described above. We intend to secure external financing for up to approximately $20.2 million from a commercial bank or other lending institution in the U.S. and/or from the Commonwealth of Pennsylvania or other federal and state bodies and fund the balance through existing cash reserves.

We began construction of our new facility in November 2009.

During the year ended June 30, 2010, we incurred $5.5 million in costs for equipment related to production capacity in the new facility. We have commitments in the amount of $4.8 million which we expect to fulfill during the year ended June 30, 2011.

Univest Credit Agreement

On August 13, 2010, we entered into a Credit Agreement with Univest National Bank and Trust Co. (“Univest”) pursuant to which Univest agreed to provide us with a loan in an amount not to exceed $7.0 million. We intend to use the proceeds to provide short-term financing for the construction of our new manufacturing facility. Borrowings under the Credit Agreement bear interest, payable monthly, at a rate equal to the greater of the prime rate plus 0.5% or 3.75% and are collateralized by a $7.0 million cash deposit. The Credit Agreement expires on February 13, 2011.

FDA Clearance

In August 2010, we received 501(k) market clearance from the FDA for the sale of our Unitract 1 mL Tuberculin syringe in the United States.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. This requires management to make certain estimates, judgments and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. The following accounting policies require significant estimates, judgments and assumptions.

Goodwill

Goodwill is the excess of purchase price over the fair value of net assets acquired in business acquisitions. Goodwill is subject to, at a minimum, an annual impairment assessment of its carrying value. Additional impairment assessments would be performed if events and circumstances warranted such additional assessments during the year. Goodwill impairment is deemed to exist if the net book value of our reporting unit exceeds its estimated fair value. Estimated fair value of our reporting unit is determined utilizing the value implied by our year end quoted stock price. We did not record any goodwill impairments during fiscal 2010, 2009 or 2008.

The Company currently has one reporting unit. The reporting unit is comprised of our developing Unitract and Unifill syringe business, the base technology which we obtained as part of our November 2002 acquisition of Unitract Syringe Pty Limited and the manufacturing capability which we obtained in our January 2007 acquisition of Integrated BioSciences, Inc.

In estimating the reporting unit’s fair value for purposes of the Company’s fiscal 2010 impairment assessment, management compared the carrying value of our reporting unit to our market capitalization as of June 30, 2010, which is our annual impairment testing date. Market capitalization of $318.7 million, based on the quoted stock price on the Nasdaq was well in excess of our stockholders’ equity of $44.4 million. Management also considered that market capitalization through early September 2010 continued to be in excess of the carrying value.

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Share-Based Compensation

We grant stock options, restricted stock and common stock as compensation to our employees, directors and consultants. Certain employee and director awards vest over stated vesting periods and others also require achievement of specific performance or market conditions. We expense the grant-date fair value of awards to employees and directors over their respective vesting periods. To the extent that employee and director awards vest only upon the achievement of a specific performance condition, expense is recognized over the period from the date management determines that the performance condition is probable of achievement through the date they are expected to be met. Awards granted to consultants are sometimes granted for past services, in which case their fair value is expensed on their grant date, while other awards require future service, or the achievement of performance or market conditions. Timing of expense recognition for consultant awards is similar to that of employee and director awards; however, aggregate expense is re-measured each quarter end based on the then fair value of the award through the vesting date of the award. We estimate the fair value of stock options using the Black-Scholes option-pricing model, with the exception of market-based grants, which are valued based on Barrier and Monte Carlo option-pricing models. Option pricing methods require the input of highly subjective assumptions, including the expected stock price volatility.

Revenue Recognition

We recognize revenue from licensing fees, industrialization efforts and products sales.

In June 2008, we entered into an exclusive licensing arrangement to allow our pharmaceutical partner to use certain of our intellectual property in order and solely to develop in collaboration with us, our Unifill syringe for use in and sale to the pre-filled syringe market. The up-front, non-refundable fee paid for this license is being amortized over the expected life of the related agreement. In late fiscal 2009, we entered into an industrialization agreement with our pharmaceutical partner, under which specific payment amounts and completion dates were established for achievement of certain pre-defined milestones in our development of the Unifill syringe. Revenue is recognized upon achievement of the “at risk” milestone events, which represents the culmination of the earnings process related to such events. Milestones include specific phases of the project such as product design, prototype availability, user tests, manufacturing proof of principle and the various steps to complete the industrialization of the product. Revenue recognized is commensurate with the milestones achieved and we have no future performance obligations related to previous milestone payments as each milestone payment is non-refundable when received.

We recognize revenue from sales of products at the time of shipment and when title passes to the customer.

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Results of Operations

The following table summarizes our results of operations for the fiscal years ended June 30, 2010, 2009 and 2008:

	Year Ended June 30,
	2010			2009			2008
	(in thousand, except per share data)
Revenues:
Industrialization fees	$	6,318		$	13,601		$	—
Licensing fees		2,566			2,456			—
Product sales and other		2,538			3,919			3,500
Total revenues		11,422			19,976			3,500
Cost of product sales		2,471			3,426			2,365
Gross profit		8,951			16,550			1,135
Operating expenses:
Research and development		8,495			1,048			532
Selling, general and administrative		28,696			14,941			8,211
Depreciation and amortization		2,314			915			727
Total operating expenses		39,505			16,904			9,470
Operating loss		(30,554	)		(354	)		(8,335	)
Interest expense		125			249			459
Interest income		(1,066	)		(361	)		(203	)
Other expense (income), net		135			275			(54	)
Net loss	$	(29,748	)	$	(517	)	$	(8,537	)
Loss per share:
Basic loss per share	$	(0.64	)	$	(0.02	)	$	(0.26	)
Diluted loss per share	$	(0.64	)	$	(0.02	)	$	(0.26	)

Fiscal Year 2010 Compared to Fiscal Year 2009

Revenues.  Revenues decreased by $8.6 million or 42.8%. Revenues from our industrialization agreement with sanofi-aventis decreased from $13.6 million to $6.3 million due to the nature and timing of milestones achieved during the year ended June 30, 2010. Revenues from our exclusive licensing agreement with sanofi-aventis increased from $2.5 million to $2.6 million. We have recognized and will continue to recognize the revenue from the exclusive licensing agreement on a straight-line basis over the remaining term of the agreement. Since these revenues are based in Australian dollars, the $0.1 million variation in revenues from the exclusive licensing agreement between the year ended June 30, 2010 results from fluctuations in foreign currency translation rates. Revenues from product sales of our contract manufacturing business decreased from $3.9 million to $2.5 million principally because most of our efforts have been devoted to the development of the Unifill syringe in fiscal 2010.

Cost of sales.  Cost of sales decreased by $1.0 million or 27.9%. The decrease was attributable to a reduction in product sales under our contract manufacturing sales activity.

Research and development expenses.  Research and development expenses increased by $7.4 million, primarily as a result of $4.3 million incurred in connection with the issuance of 833,333 fully-vested shares of common stock to certain employees in consideration of their transfer to us of certain intellectual property rights. The increase was also a result of additional expenditures to finalize the product specifications of our Unifill syringe.

Selling, general and administrative expenses.  Selling, general and administrative expenses increased by $13.8 million or 92.1%. During fiscal 2010, we increased the workforce at our Lewisberry, Pennsylvania facility,

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and as a result, we incurred payroll expenses and recruiting fees during the year ended June 30, 2010 of $10.2 million, an increase of $5.3 million compared to fiscal 2009. Additionally, during the year ended June 30, 2010, we incurred legal and consulting fees of $6.4 million, an increase of $3.4 million compared to fiscal 2009. The increase was due primarily to expenses we incurred related to our redomiciliation and Nasdaq listing. Additionally, during fiscal 2010, we recorded $5.7 million in share-based compensation expense, an increase of $2.7 million compared to fiscal 2009. Our share-based compensation expense during fiscal 2010 relates primarily to restricted stock and stock options issued to employees and consultants during the year. Our share-based compensation expense during fiscal 2009 included $1.5 million recorded in December 2008 for the issuance of 1.7 million shares of common stock to our Chief Executive Officer.

Depreciation and amortization expense.  Depreciation and amortization expense increased by $1.4 million or 152.9% which was primarily attributable to $1.0 million of property plant and equipment additions placed in service during the year ended June 30, 2010. Additionally, during October 2009, we placed $4.0 million of machinery to manufacture our 1mL syringe in service. We expect our depreciation and amortization expense to increase in the future as a result of the construction of our new headquarters and manufacturing facility and significant investments we have made and will continue to make to develop the facility, which includes the purchase of machinery for the Unifill syringe.

Interest expense.  Interest expense decreased by $0.1 million, primarily as a result of our lower levels of outstanding debt. We expect that our interest expense will increase significantly in the future as we are seeking to obtain approximately $20.2 million in debt financing for the construction of our new headquarters and manufacturing facility.

Interest income.  Interest income increased by $0.7 million, primarily as a result of higher cash balances during the year ended June 30, 2010.

Other expense.  Other expense decreased by $0.1 million primarily due to lower foreign exchange losses as a result of the appreciation of the U.S. dollar against the Australian dollar.

Net loss and loss per share.  Net loss for the fiscal years ended June 30, 2010 and 2009 was $29.7 million and $0.5 million, respectively. Basic and diluted loss per share was $0.64 and $0.02, respectively, on weighted average shares outstanding of 46,837,066 and 34,426,353, respectively. The increase in the weighted average shares outstanding was primarily due to the issuance of common stock in connection with our October 2009 equity financing.

Fiscal Year 2009 Compared to Fiscal Year 2008

Revenues.  Revenues increased by $16.5 million or 470.7%. The increase was primarily attributable to $13.6 million in revenue recognized under our industrialization agreement with sanofi-aventis based on milestones achieved during fiscal 2009. Additionally, we recognized $2.5 million in revenue under our exclusive licensing agreement with sanofi-aventis based on amortizing over the term of the related agreement the up front, non-refundable intellectual property licensing fee we received. Revenues from our contract manufacturing business decreased by $0.7 million in fiscal 2009.

Cost of sales.  Cost of sales increased by $1.1 million or 44.9%. The increase was primarily attributable to an increase in the cost of plastics and commodities we use to assemble certain of our products within our contract business line and to higher payroll-related expenses resulting from hiring additional manufacturing personnel.

Research and development expenses.  Research and development expenses increased by $0.5 million, or 97.0% primarily as a result of additional expenditures related to the product specifications of our Unifill syringe.

Selling, general and administrative expenses.  Selling, general and administrative expenses increased by $6.7 million or 82.0%. During fiscal 2009, we significantly increased our workforce at our Lewisberry, Pennsylvania headquarters and manufacturing facility, which included hiring over ten management-level personnel for our operational, regulatory affairs and finance departments. As a result of these hires, we incurred $2.5 million in additional payroll, employee-related expenses and recruiting fees. In addition, we incurred $1.0 million in legal, consulting and professional fees, primarily related to our anticipated Nasdaq listing. Finally, during fiscal 2009, our share-based compensation expense, included in selling general and administrative expense, increased by

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$2.2 million. Of this increase, $1.5 million is due to the issuance of 1.7 million shares of common stock to our Chief Executive Officer in December 2008 and $0.7 million is due to additional expense resulting from significant issuances of stock options to employees, directors and consultants during fiscal 2009.

Depreciation and amortization expense.  Depreciation and amortization expense increased by $0.2 million or 25.9%, which was primarily attributable to $2.9 million we spent to purchase additional property, plant and equipment.

Interest expense.  Interest expense decreased by $0.2 million, primarily as a result of lower levels of outstanding debt during the prior year.

Interest income.  Interest income increased by $0.2 million during fiscal 2009 primarily as a result of higher interest rates.

Other expense (income).  Other expense during fiscal 2009 was $0.3 million compared to other income of $0.1 million during fiscal 2008, primarily due to higher foreign exchange losses as a result of the depreciation of the U.S. dollar against Australian dollar.

Net loss and loss per share Net loss for the years ended June 30, 2009 and 2008 were $0.5 million and $8.5 million, respectively. Basic and diluted loss per share was $0.02 and $0.26, respectively, on weighted average shares outstanding of 34,426,353 and 32,938,477 respectively. The increase in weighted average shares outstanding is primarily due to 1.7 million shares of common stock issued to our Chief Executive Officer in November 2008.

Liquidity and Capital Resources

To date, we have funded our operations primarily from a combination of equity issuances by UMSL prior to the redomiciliation, borrowings under our bank term loans and payments from sanofi-aventis under our exclusive licensing and industrialization agreements. As of June 30, 2010, cash and cash equivalents were $20.8 million and our long-term debt was $2.7 million. As of June 30, 2009, cash and cash equivalents were $3.6 million and our long-term debt was $3.1 million. Since July 1, 2009, we have raised approximately A$50.9 million ($47.1 million), net of issuance costs in equity financing. We also expect to receive $5.45 million in assistance from the Commonwealth of Pennsylvania as described under “Recent Business Developments” and 2.0 million Euros of additional milestone-based payments from sanofi-aventis under the industrialization agreement during fiscal 2011. We have also entered into a credit agreement with a financial institution to provide us with a loan of up to $7.0 million for the construction of our new manufacturing facility, which must be collateralized by equal amounts of cash deposits.

We are in the process of developing a new manufacturing facility in central Pennsylvania. We estimate the total cost of the development to be approximately $31.0 million, including approved change orders through September 15, 2010. We intend to secure external financing for up to $20.2 million from a commercial bank or other lending institution in the U.S. and/or from the Commonwealth of Pennsylvania or other federal and state bodies and fund the balance through existing cash reserves.

We believe that our cash on hand will be sufficient to sustain planned operations through the second quarter of fiscal year 2011.

Our recurring losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. We anticipate incurring additional losses until such time that we can generate significant sales and other potential sources of revenue pertaining to our propriety range of retractable syringes.

Certain bank loans secured by a subsidiary company also had a minimum debt service ratio financial covenant, with which we were not in compliance as of June 30, 2010. The $1.3 million long-term portion outstanding as of June 30, 2010 under these bank term loans has been reclassified to the current portion of long-term debt. In September 2010 we received a waiver from our lender for our previous non-compliance with this covenant.

We funded the costs of the redomiciliation through cash from operations and cash on hand. These expenditures have been expensed as incurred.

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The following table summarizes our cash flows during the fiscal years ended June 30, 2010, 2009 and 2008:

	Year Ended June 30,
	2010			2009			2008
	(In thousands)
Net cash provided by (used in):
Operating activities	$	(12,390	)	$	6,795		$	(7,623	)
Investing activities		(18,132	)		(2,912	)		(624	)
Financing activities		49,488			(3,265	)		7,882

Fiscal Year 2010 Compared to Fiscal Year 2009

Net Cash (Used in) Provided by Operating Activities

Net cash used in operating activities during fiscal 2010 was $12.4 million compared to net cash provided by operating activities of $6.8 million during fiscal 2009. The decrease in cash flow was primarily due to $20.8 million of lower net income after adding back depreciation and amortization and share-based compensation expense.

Net Cash Used in Investing Activities

Net cash used in investing activities was $18.1 million during fiscal 2010, primarily as a result of $17.6 million of costs incurred in connection with the purchase of machinery related to the lines for our Unifill syringe as well as the purchase of the land and construction costs in connection with our new headquarters and manufacturing facility.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities during fiscal 2010 was $49.5 million compared to net cash used in financing activities of $3.3 million during fiscal 2009. During fiscal 2010, we received $47.1 million from the issuance of common stock related to our private placement and share purchase plan, and $2.3 million upon the exercise of stock options. During fiscal 2009, we elected to terminate a licensing agreement that we determined was no longer consistent with our business strategies, and, as a final settlement, we repaid $2.3 million of the $3.0 million that we had originally received in 2008 under the licensing agreement, while retaining $0.7 million to cover related legal fees.

Fiscal Year 2009 Compared to Fiscal Year 2008

Net Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities during fiscal 2009 was $6.8 million compared to net cash used in operating activities of $7.6 million during fiscal 2008. The increase in cash flow was primarily due to $10.4 million of higher net income after adding back depreciation and amortization and share-based compensation expense. The increase was also attributable to $9.8 million of deferred revenue recorded in connection with our exclusivity agreement with sanofi-aventis, which was partially offset by amounts due from sanofi-aventis under our industrialization agreement. Theses agreements were entered into during fiscal 2009.

Net Cash Used in Investing Activities

Net cash used in investing activities increased by $2.3 million, primarily due to costs incurred in connection with the production of machinery used in the manufacturing of our Unitract 1 mL Syringe. Additionally, during fiscal 2009, we incurred significant leasehold improvement costs at our Lewisberry, Pennsylvania headquarters and manufacturing facility.

Net Cash (Used in) Provided by Financing Activities

Net cash used in financing activities was $3.3 million during fiscal 2009 compared to net cash provided by financing activities of $7.9 million during fiscal 2008. During fiscal 2009, we elected to terminate a licensing agreement that we determined was no longer consistent with our business strategies, and, as a final settlement, we

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repaid $2.3 million of the $3.0 million that we had originally received in 2008 under the licensing agreement, while retaining $0.7 million to cover related legal fees. During fiscal 2008, we received $2.8 million from the issuance of common stock and $1.9 million from the issuance of convertible debt.

Contractual Obligations

The following table provides information regarding our contractual obligations as of June 30, 2010:

	Payments Due by Period
			Less Than						More Than
	Total		1 Year		1-3 Years		3-5 Years		5 Years
	(In thousands)
Long-term debt	$	2,741	$	383	$	544	$	468	$	1,346
Interest		691		132		201		148		210
Operating leases		319		285		34		—		—
New facility construction and open purchase orders		23,800		23,800		—		—		—
Total contractual obligations	$	27,551	$	24,600	$	779	$	616	$	1,556

Our term loans bear interest at a rate of prime plus 1.50%. The future contractual obligations for interest is based upon 4.75%, which is the prime rate as of June 30, 2010 (3.25%) plus 1.50%.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as such term is defined in the SEC rules.

Recently Issued Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification^tm and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162” (“SFAS 168”). SFAS 168 represents the last numbered standard issued by the FASB under the old (pre-codification) numbering system, and amends the Generally Accepted Accounting Principles (“GAAP”) hierarchy. On July 1, 2009, the FASB launched its new codification (i.e. the FASB Accounting Standards Codification — “ASC”). The codification supersedes existing GAAP for nongovernmental entities.

In October 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-13, “Multiple-Deliverable Revenue Arrangements” (“ASU 2009-13”). ASU 2009-13 provides amendments to the criteria in Subtopic 605-24 for separating consideration in multiple-deliverable revenue arrangements. It establishes a hierarchy of selling prices to determine the selling price of each specific deliverable which includes vendor-specific objective evidence (if available), third-party evidence (if vendor-specific evidence is not available) or estimated selling price if neither of the first two are available. ASU 2009-13 also eliminates the residual method for allocating revenue between the elements of an arrangement and requires that arrangement consideration be allocated at the inception of the arrangement. Finally, ASU 2009-13 expands the disclosure requirements regarding a vendor’s multiple-deliverable revenue arrangements. ASU 2009-13 should be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We are evaluating the impact the adoption of ASU 2009-13 will have on our consolidated financial statements.

In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value Measurements,” which amends ASC Topic 820 (“ASU 2010-06”). ASU 2010-06 amends the ASC to require disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. The changes to the ASC as a result of this update are effective for annual and interim reporting periods beginning after December 15, 2009 except for requirements related to Level 3 disclosures, which are effective for annual and interim periods beginning after December 15, 2010. We do not believe that the adoption of ASU 2010-06 will have a material impact on our consolidated financial statements.

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In March 2010, the FASB issued ASU 2010-17, “Milestone Method of Revenue Recognition, a consensus of the FASB Emerging Issues Task Force (Issue No. 08-9).” (“ASU 2010-17”). ASU 2010-17 provides guidance about the criteria that must be met to use the milestone method of revenue recognition. This ASU is effective for milestones achieved in fiscal years and interim periods within those years, beginning after June 15, 2010. We are evaluating the impact the adoption of ASU 2010-17 will have on our consolidated financial statements.

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk from changes in interest rates and foreign currency exchange rates. Changes in these factors could cause fluctuations in our results of operations and cash flows.

Interest Rate Risk

Our exposure to interest rate risk is limited to our cash and cash equivalents that is invested in money market funds with highly liquid short term investments and our variable interest rate term loans. We currently do not utilize derivative instruments to mitigate changes in interest rates.

Foreign Currency Exchange Rate Fluctuations

The majority of our revenues are derived from payments under our industrialization agreement received in euros while we incur most of our expenses in U.S. dollars and Australian dollars. In addition, a substantial portion of our cash and cash equivalents and investments are held at Australian banking institutions and are denominated in Australian dollars. We are exposed to foreign currency exchange rate risks on these amounts. We currently do not utilize options or forwards contracts to mitigate changes in foreign currency exchange rates. For U.S. reporting purposes, we translate all assets and liabilities of our non-U.S. entities into U.S. dollars using the exchange rate as of the end of the related period and we translate all revenues and expenses of our non-U.S. entities using the average exchange rate during the applicable period.

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Item 8.   Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Audited Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firms		45
Consolidated Balance Sheets as of June 30, 2010 and 2009		47
Consolidated Statements of Operations for the years ended June 30, 2010, 2009 and 2008		48
Consolidated Statements of Stockholders’ Equity and Comprehensive Loss for the years ended June 30, 2010, 2009 and 2008		49
Consolidated Statements of Cash Flows for the years ended June 30, 2010, 2009 and 2008		50
Notes to Consolidated Financial Statements		51

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Unilife Corporation:

We have audited the accompanying consolidated balance sheet of Unilife Corporation and subsidiaries (the Company) as of June 30, 2010, and the related consolidated statements of operations, stockholders’ equity and comprehensive loss, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Unilife Corporation and subsidiaries as of June 30, 2010, and the results of their operations and their cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 2 to the consolidated financial statements, the Company has incurred recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KPMG LLP

Harrisburg, Pennsylvania

September 28, 2010

52

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Unilife Corporation

Lewisberry, Pennsylvania

We have audited the accompanying consolidated balance sheets of Unilife Corporation and subsidiaries as of June 30, 2009 and the related consolidated statements of operations, stockholders’ equity and comprehensive income, and cash flows for each of the two years in the period ended June 30, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Unilife Corporation and subsidiaries at June 30, 2009, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2009, in conformity with accounting principles generally accepted in the United States of America.

/s/  BDO Kendalls Audit & Assurance (WA) Pty Ltd

Perth, Western Australia

November 11, 2009

53

UNILIFE CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

	June 30,
	2010			2009
	(In thousands, except share data)
ASSETS
Current Assets:
Cash and cash equivalents	$	20,750		$	3,627
Accounts receivable		1,556			7,333
Inventories		797			1,097
Prepaid expenses and other current assets		637			223
Total current assets		23,740			12,280
Property, plant and equipment, net		29,972			9,137
Goodwill		10,792			10,235
Intangible assets, net		40			43
Other assets		273			517
Total assets	$	64,817		$	32,212
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	6,044		$	1,103
Accrued expenses		2,911			6,097
Current portion of long-term debt		1,648			405
Deferred revenue		2,188			2,642
Total current liabilities		12,791			10,247
Long-term debt, less current portion		1,093			2,728
Deferred revenue		6,563			7,926
Total liabilities		20,447			20,901
Commitments and contingencies (Note 8)
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized as of June 30, 2010; none issued or outstanding as of June 30, 2010 and 2009		—			—
Common stock, $0.01 par value, 250,000,000 shares authorized as of June 30, 2010; 54,761,848 and 36,625,802 shares issued and outstanding as of June 30, 2010 and 2009, respectively		548			366
Additional paid-in-capital		122,397			57,987
Accumulated deficit		(79,650	)		(49,902	)
Accumulated other comprehensive income		1,075			2,860
Total stockholders’ equity		44,370			11,311
Total liabilities and stockholders’ equity	$	64,817		$	32,212

See accompanying notes to the consolidated financial statements.

54

UNILIFE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

	Year Ended June 30,
	2010			2009			2008
	(In thousands, except share data)
Revenues:
Industrialization fees	$	6,318		$	13,601		$	—
Licensing fees		2,566			2,456			—
Product sales and other		2,538			3,919			3,500
Total revenues		11,422			19,976			3,500
Cost of product sales		2,471			3,426			2,365
Gross profit		8,951			16,550			1,135
Operating expenses:
Research and development		8,495			1,048			532
Selling, general and administrative		28,696			14,941			8,211
Depreciation and amortization		2,314			915			727
Total operating expenses		39,505			16,904			9,470
Operating loss		(30,554	)		(354	)		(8,335	)
Interest expense		125			249			459
Interest income		(1,066	)		(361	)		(203	)
Other expense (income), net		135			275			(54	)
Net loss	$	(29,748	)	$	(517	)	$	(8,537	)
Loss per share:
Basic loss per share	$	(0.64	)	$	(0.02	)	$	(0.26	)
Diluted loss per share	$	(0.64	)	$	(0.02	)	$	(0.26	)

See accompanying notes to the consolidated financial statements.

55

UNILIFE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity and Comprehensive Loss

											Accumulated
					Additional-						Other
	Common Stock				Paid-In			Accumulated			Comprehensive
	Shares		Amount		Capital			Deficit			Income			Total
	(In thousands, except share data)
Balance as of July 1, 2007		30,371,143	$	304	$	48,109		$	(40,848	)	$	3,308		$	10,873
Comprehensive loss:
Net loss		—		—		—			(8,537	)		—			(8,537	)
Foreign currency translation		—		—		—			—			1,406			1,406
Comprehensive loss															(7,131	)
Issuance of options to purchase common stock		—		—		846			—			—			846
Issuance of common stock upon exercise of stock options		293,375		3		431			—			—			434
Issuance of common stock upon conversion of convertible notes		1,275,834		13		1,648			—			—			1,661
Issuance of common stock for cash, net of transaction costs		2,333,333		23		2,801			—			—			2,824
Issuance of common stock in connection with Employee Share Plan		22,033		—		—			—			—			—
Balance as of June 30, 2008		34,295,718		343		53,835			(49,385	)		4,714			9,507
Comprehensive loss:
Net loss		—		—		—			(517	)		—			(517	)
Foreign currency translation		—		—		—			—			(1,854	)		(1,854	)
Comprehensive loss															(2,371	)
Issuance of options to purchase common stock		—		—		3,059			—			—			3,059
Issuance of common stock upon exercise of stock options		97,532		1		37			—			—			38
Issuance of common stock upon conversion of convertible notes		520,000		5		616			—			—			621
Issuance of common stock in connection with Employee Share Plan		45,885		—		—			—			—			—
Issuance of stock options in connection with the acquisition of Integrated BioSciences, Inc.		—		—		457			—			—			457
Grant of common stock to employee		1,666,667		17		(17	)		—			—			—
Balance as of June 30, 2009		36,625,802		366		57,987			(49,902	)		2,860			11,311
Comprehensive loss:
Net loss		—		—		—			(29,748	)		—			(29,748	)
Foreign currency translation		—		—		—			—			(1,785	)		(1,785	)
Comprehensive loss															(31,533	)
Issuance of options to purchase common stock		—		—		3,463			—			—			3,463
Issuance of common stock to employees		833,333		8		4,331			—			—			4,339
Issuance of restricted stock		1,818,000		18		2,236			—			—			2,254
Issuance of common stock upon exercise of stock options		1,606,419		17		2,332			—			—			2,349
Issuance of common stock in connection with private placement and share purchase plan, net of issuance costs		10,544,961		106		47,011			—			—			47,117
Issuance of common stock to former shareholders of Unitract Syringe Pty Limited		3,333,333		33		5,037			—			—			5,070
Balance as of June 30, 2010		54,761,848	$	548	$	122,397		$	(79,650	)	$	1,075		$	44,370

See accompanying notes to the consolidated financial statements.

56

UNILIFE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

	Year Ended June 30,
	2010			2009			2008
	(In thousands, except share data)
Cash flows from operating activities:
Net loss	$	(29,748	)	$	(517	)	$	(8,537	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		2,314			915			727
Share-based compensation expense		10,056			3,059			846
Loss on the sale of property, plant and equipment		—			5			—
Changes in assets and liabilities:
Accounts receivable		5,852			(6,172	)		(6	)
Inventories		302			(40	)		(649	)
Prepaid expenses and other current assets		(385	)		(126	)		(28	)
Other assets		270			(232	)		33
Accounts payable		863			586			(400	)
Accrued expenses		656			(506	)		391
Deferred revenue		(2,570	)		9,823			—
Net cash (used in) provided by operating activities		(12,390	)		6,795			(7,623	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(17,562	)		(2,926	)		(904	)
Proceeds from the sale of property, plant and equipment		—			14			280
Purchases of certificates of deposit		(9,106	)		—			—
Proceeds from the redemption of certificates of deposit		8,536			—			—
Net cash used in investing activities		(18,132	)		(2,912	)		(624	)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt		—			88			3,017
Principal payments on long-term debt		(411	)		(3,391	)		(313	)
Proceeds from the issuance of convertible debt		—			—			1,920
Proceeds from the issuance of common stock, net of issuance costs		47,117			—			2,824
Proceeds from the exercise of options to purchase common stock		2,349			38			434
Increase in restricted cash		433			—			—
Net cash provided by (used in) financing activities		49,488			(3,265	)		7,882
Foreign currency exchange on cash		(1,843	)		122			(334	)
Net increase (decrease) in cash and cash equivalents		17,123			740			(699	)
Cash and cash equivalents at beginning of year		3,627			2,887			3,586
Cash and cash equivalents at end of year	$	20,750		$	3,627		$	2,887
Supplemental disclosure of cash flow information
Cash paid for interest	$	135		$	183		$	249
Supplemental disclosure of non-cash activities:
Conversion of convertible notes into common stock	$	—		$	621		$	1,661
Provision for issuance of common shares to former shareholders	$	—		$	5,070		$	—
Issuance of common stock to former shareholders of Unitract Syringe Pty Limited	$	5,070		$	—		$	—
Purchases of property, plant and equipment in accounts payable and accrued liabilities	$	5,051		$	—		$	—

See accompanying notes to the consolidated financial statements.

57

UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

1.   Description of Business

Unilife Corporation (collectively with its consolidated subsidiaries, the “Company”) and subsidiaries is a medical device company focused on the design, development, manufacture and supply of a proprietary range of retractable syringes. The primary target customers for the Company’s products include pharmaceutical manufacturers and suppliers of medical equipment to healthcare facilities and distributors to patients who self-administer prescription medication. The Company also manufactures non-proprietary Class I and Class II medical devices, such as specialty syringes, under contract for outsourcing customers.

2.  Liquidity

The Company incurred losses from operations during the past fiscal year and anticipates incurring additional losses until such time that it can generate sufficient sales of its proprietary range of retractable syringes. Management estimates that current cash and cash equivalents of $20.8 million are sufficient to sustained planned operations through the second quarter of fiscal year 2011.

Additional funding will be needed by the Company to support its operations and capital expenditure requirements. Management has a range of short and long-term funding strategies available to it in this regard. In addition to the sale of its Unitract and Unifill syringe products to existing partners, the Company is also in discussions with additional pharmaceutical customers pertaining to the Unifill syringe and other pipeline products. Should the Company enter into commercial relationships relating to the industrialization, commercial supply or preferred use of a device within a particular therapeutic market, the Company may secure additional funding or revenue streams. We may seek to raise additional funds through the sale of additional equity or debt securities. The Company also plans to secure external financing on its new corporate headquarters and manufacturing facility in the near future. The Company believes that the amount of capital generated by this plan would provide sufficient working capital for the next fiscal year. There can be no assurance that such funding will be available when needed or on acceptable terms. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

3.   Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Unilife Corporation and its wholly-owned subsidiaries. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP.”) All intercompany accounts and transactions have been eliminated in consolidation.

On September 1, 2009, Unilife Medical Solutions Limited, an Australian Corporation (“UMSL”), entered into a Merger Implementation Agreement with Unilife Corporation, a newly-formed Delaware subsidiary of UMSL, pursuant to which stockholders and option holders of UMSL would exchange their existing interests in UMSL for equivalent interests in Unilife Corporation and Unilife Corporation would become the parent or ultimate parent of UMSL and its subsidiaries. The redomiciliation transaction was approved by the Australian Federal Court and the shareholders and option holders of UMSL and was completed on January 27, 2010. In the redomiciliation each holder of UMSL ordinary shares or share options received one share of common stock or one stock option of Unilife Corporation for every six UMSL ordinary shares or share options, respectively, held by such holder, unless a holder of UMSL ordinary shares elected to receive, in lieu of common stock, Chess Depository Interests, or CDIs of Unilife (each representing one-sixth of a share of Unilife common stock) in which case such holder received one CDI of

58

UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Unilife for each ordinary share of UMSL. All share and per share data have been retroactively restated to reflect the one for six share recapitalization.

References to the “Company” include Unilife Corporation and its consolidated subsidiaries, including UMSL, unless the context otherwise requires. References to “Unilife” are references solely to Unilife Corporation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The estimates are principally in the areas of revenue recognition and share-based compensation expense. Management bases its estimates on historical experience and various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash on hand, deposits at banks and other short-term highly liquid investments with original maturities of three months or less. Cash equivalents are stated at cost which approximates fair value.

Accounts Receivable

Accounts receivable are stated at amounts due from customers, which also represents the net realizable amount. The Company evaluates the collectability of its accounts receivable on a periodic basis and has historically not recorded an allowance for doubtful accounts. In instances in which management becomes aware of circumstances that may impair a particular customer’s ability to meet its obligation, the related receivable would be written off. Accounts receivable as of June 30, 2010 and 2009 consist principally of amounts due from a single pharmaceutical company related to the achievement of certain milestones under the related industrialization agreement described in Note 13.

Inventories

Inventories consist primarily of plastic syringe components and include direct materials, direct labor and manufacturing overhead. Inventories are stated at the lower of cost or market, with cost determined using the first in, first out method. The Company routinely reviews its inventory for obsolete, slow moving or otherwise impaired inventory and records estimated impairments in the periods in which they occur. Inventories consist of the following:

	June 30,
	2010		2009
	(In thousands)
Raw materials	$	649	$	567
Work in process		148		530
Total inventories	$	797	$	1,097

Property, Plant and Equipment

Property, plant and equipment, including significant improvements, are recorded at cost, net of accumulated depreciation and amortization. Repairs and maintenance are expensed as incurred.

59

UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Depreciation and amortization expense is recorded on a straight-line basis over the estimated useful life of the asset as listed below:

Asset Category	Useful Lives
Machinery and equipment	3 to 15 years
Furniture and fixtures	7 years
Leasehold improvements	Shorter of leasehold improvement life or remaining term of lease

The Company reviews the carrying value of the long-lived assets periodically to determine if facts and circumstances exist that would suggest that assets might be impaired or that the useful lives should be modified. Among the factors the Company considers in making the evaluation are changes in market position and profitability. If facts and circumstances exist which may indicate impairment, the Company will prepare a projection of the undiscounted cash flows of the asset group and determine if the long-lived assets are recoverable based on these undiscounted cash flows. If impairment is indicated, an adjustment will be made to reduce the carrying amount of these assets to their fair value.

Goodwill and Intangible Assets

Goodwill is the excess of purchase price over the fair value of net assets acquired in business acquisitions. Goodwill is subject to, at a minimum, an annual impairment assessment of its carrying value. Additional impairment assessments would be performed if events and circumstances warranted such additional assessments during the year. Goodwill impairment is deemed to exist if the net book value of the Company’s reporting unit exceeds its estimated fair value. Estimated fair value of the Company’s reporting unit is determined utilizing the value implied by the Company’s year end quoted stock price. The Company performs its annual impairment test at the end of its fiscal year. There were no impairments recorded on goodwill during the years ended June 30, 2010, 2009 and 2008.

Definite-lived intangible assets include patents which are amortized on a straight-line basis over their estimated useful lives of 15 years. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When factors indicate a possible impairment, if the sum of the estimated undiscounted future cash flows expected to result from the use and eventual disposition of an asset is less than the carrying amount of the asset, an impairment may be recognized. Measurement of an impairment loss is based on the excess of the carrying value of the asset over its fair value. There were no impairments recorded on intangible assets during the years ended June 30, 2010, 2009 or 2008.

Deferred Financing Costs

Deferred financing costs consist of costs incurred in connection with debt financings. These costs are amortized over the term of the related debt using the effective interest rate method.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recorded to the extent the Company believes they will more likely than not be realized. In making such determinations, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning

60

UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

strategies and recent financial operations. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected more likely than not to be realized.

Beginning with the adoption of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, included in FASB ASC Subtopic 740-10 — Income Taxes — Overall,” the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Prior to the adoption of Interpretation 48, the Company recognized the effect of income tax positions only if such positions were probable of being sustained. The Company’s policy is to include interest and penalties related to uncertain tax positions within the provision (benefit) for income taxes within the Company’s consolidated statements of operations.

Fair Value of Financial Instruments

The carrying value of financial instruments such as accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value because of the short maturity of these items. The Company believes that the current carrying amount of its long-term debt approximates fair value because the interest rates on these instruments are similar to those rates that the Company would currently be able to receive for similar instruments of comparable maturity.

Share-Based Compensation

The Company grants stock options, restricted stock and common stock as compensation to its employees, directors and consultants. Certain employee and director awards vest over stated vesting periods and others also require achievement of specific performance or market conditions. The Company expenses the grant-date fair value of awards to employees and directors over their respective vesting periods. To the extent that employee and director awards vest only upon the achievement of a specific performance condition, expense is recognized over the period from the date management determines that the performance condition is probable of achievement through the date they are expected to be met. Awards granted to consultants are sometimes granted for past services, in which case their fair value is expensed on their grant date, while other awards require future service, or the achievement of performance or market conditions. Timing of expense recognition for consultant awards is similar to that of employee and director awards; however, aggregate expense is re-measured each quarter end based on the then fair value of the award through the vesting date of the award. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model, with the exception of market-based grants, which are valued based on Barrier and Monte Carlo option-pricing models. Option pricing methods require the input of highly subjective assumptions, including the expected stock price volatility. See Note 4 for additional information regarding share-based compensation.

Foreign Currency Translation

The Australian dollar (“A$”) is the functional currency for the Company’s Australian operations. Foreign currency assets and liabilities are translated into U.S. dollars at the rate of exchange existing at the year-end date. Revenues and expenses are translated at the average annual exchange rates. Adjustments resulting from these translations are recorded in accumulated other comprehensive income (loss) within the Company’s consolidated balance sheets and will be included in income upon sale or liquidation of the foreign investment. Gains and losses from foreign currency transactions, denominated in a currency other than the functional currency, are recorded in other expense (income) within the Company’s consolidated statements of operations and aggregated $0.1 million, $0.3 million and $(19,000) during the years ended June 30, 2010, 2009 and 2008, respectively.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) and other comprehensive income (loss). The Company’s other comprehensive income (loss) consists only of foreign currency translation adjustments.

61

UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Revenue Recognition

The Company recognizes revenue from licensing fees, industrialization efforts and product sales.

In June 2008, the Company entered into an exclusive licensing arrangement to allow its pharmaceutical partner to use certain of the Company’s intellectual property in order and solely to develop in collaboration with the Company, the Company’s Unifill syringe for use in and sale to the pre-filled syringe market. The 10.0 million euros up-front, non-refundable fee paid for this license is being amortized over the 5 year expected life of the related agreement. In late fiscal 2009, the Company entered into an industrialization agreement with its pharmaceutical partner, under which specific payment amounts and completion dates were established for achievement of certain pre-defined milestones in its development of the Unifill syringe. Revenue is recognized upon achievement of the “at risk” milestone events, which represents the culmination of the earnings process related to such events. Milestones include specific phases of the project such as product design, prototype availability, user tests, manufacturing proof of principle and the various steps to complete the industrialization of the product. Revenue recognized is commensurate with the milestones achieved and the Company has no future performance obligations related to previous milestone payments as each milestone payment is non-refundable when received.

The Company recognizes revenue from sales of products at the time of shipment and when title passes to the customer. Product sales from B. Braun, a customer who accounted for 10% or more of the Company’s revenue, were $2.5 million, $2.6 million and $2.5 million during the years ended June 30, 2010, 2009, and 2008, respectively.

Advertising Costs

Advertising costs are expensed in the period incurred. The Company incurred total advertising costs of $0.5 million, $51,000 and $43,000 during the years ended June 30, 2010, 2009 and 2008, respectively.

Research and Development Costs

Research and development costs, which primarily consist of salaries, benefits and contracted services are expensed as incurred.

Earnings (Loss) Per Share

Basic earning (loss) per share is computed as net income (loss) divided by the weighted average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur from common shares issued through common stock equivalents. The dilutive effect of potential common shares, consisting of non-participating restricted stock and outstanding options to purchase common stock, is calculated using the treasury stock method.

The Company accounts for its earnings (loss) per share in accordance with FASB Accounting Standards Codification (“ASC’) Topic 260, “Earnings Per Share (“ASC 260”), pursuant to which unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities and are included in the computation of earnings (loss) per share according to the two class method if the impact is dilutive. Shares of the Company’s unvested restricted stock are considered participating securities. However, in the event of a net loss, participating securities are excluded from the calculation of both basic and diluted earnings (loss) per share.

Government Grants

Government grants are recognized when there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When a grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. When a

62

UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

grant relates to an asset, it is recognized as deferred income and recognized in the income statement on a systematic basis over the expected useful life of the related asset.

Business Segments

The Company operates in one reportable segment, which includes the design, development and manufacture of specialty syringes. Sales by geographic location are as follows:

	Years Ended June 30,
	2010		2009		2008
	(In thousands)
Domestic	$	2,538	$	3,919	$	3,500
International		8,884		16,057		—
	$	11,422	$	19,976	$	3,500

Reclassifications

Certain prior year and quarterly amounts related to depreciation expense previously included in cost of product sales have been reclassified to conform to current year presentation.

Recently Issued Accounting Pronouncements

In June 2009, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification^tm and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162” (“SFAS 168”). SFAS 168 represents the last numbered standard issued by the FASB under the old (pre-codification) numbering system, and amends the GAAP hierarchy. On July 1, 2009, the FASB launched its new codification (i.e. the FASB Accounting Standards Codification — “ASC”). The codification supersedes existing GAAP for nongovernmental entities.

In October 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-13, “Multiple-Deliverable Revenue Arrangements” (“ASU 2009-13”). ASU 2009-13 provides amendments to the criteria in Subtopic 605-24 for separating consideration in multiple-deliverable revenue arrangements. It establishes a hierarchy of selling prices to determine the selling price of each specific deliverable which includes vendor-specific objective evidence (if available), third-party evidence (if vendor-specific evidence is not available) or estimated selling price if neither of the first two are available. ASU 2009-13 also eliminates the residual method for allocating revenue between the elements of an arrangement and requires that arrangement consideration be allocated at the inception of the arrangement. Finally, ASU 2009-13 expands the disclosure requirements regarding a vendor’s multiple-deliverable revenue arrangements. ASU 2009-13 should be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is evaluating the impact the adoption of ASU 2009-13 will have on its consolidated financial statements.

In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value Measurements,” which amends ASC Topic 820 (“ASU 2010-06”). ASU 2010-06 amends the ASC to require disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. The changes to the ASC as a result of this update are effective for annual and interim reporting periods beginning after December 15, 2009 except for requirements related to Level 3 disclosures, which are effective for annual and interim periods beginning after December 15, 2010. The Company does not believe that the adoption of ASU 2010-06 will have a material impact on its consolidated financial statements.

In March 2010, the FASB issued ASU 2010-17, “Milestone Method of Revenue Recognition, a consensus of the FASB Emerging Issues Task Force (Issue No. 08-9)” (“ASU 2010-17”). ASU 2010-17 provides guidance about

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Notes to Consolidated Financial Statements — (Continued)

the criteria that must be met to use the milestone method of revenue recognition. This ASU is effective for milestones achieved in fiscal years and interim periods within those years, beginning after June 15, 2010. The Company is evaluating the impact the adoption of ASU 2010-17 will have on its consolidated financial statements.

4.   Equity Transactions and Share-Based Compensation

During the year ended June 30, 2008, the Company issued 2,333,333 shares of its common stock in a private placement to various investors at $1.32 per share. The aggregate offering price of the private placement was approximately $3.1 million, and the net proceeds to the Company, after payment of approximately $0.3 million in expenses, was approximately $2.8 million.

In October and November 2009, the Company issued 10,544,961 shares of common stock and raised an aggregate of A$50.9 million ($47.1 million), net of issuance costs, through a combination of a U.S. and Australian private placement and a share purchase plan for the Company’s Australian and New Zealand shareholders. The Company also issued options to purchase 3,145,767 shares of common stock for no additional consideration to the investors in the private placement. Of these options, 50% are exercisable at A$7.50 per share, and 50% are exercisable at A$12.00 per share. The Company also issued options to purchase 497,662 shares of common stock to certain brokers as consideration for their services in connection with the private placement, which are exercisable at A$5.10 per share. All of the options described above are immediately exercisable and will expire in November 2012. The proceeds from the private placement and the share purchase plan are being used to accelerate the expansion of the Company’s U.S. operational capabilities and production facilities, to purchase capital equipment and complete the industrialization program for the Unifill syringe.

In November 2009, the Company issued 3,333,333 shares of common stock to the former shareholders of Unitract Syringe Pty Limited. These shares were issued in full satisfaction of the Company’s obligation for the purchase of that business which had been accrued for on the date of purchase.

In January 2010, the Company issued 833,333 fully vested shares of common stock to certain employees in consideration of their transfer to the Company of certain intellectual property rights and recognized $4.3 million of share-based compensation expense classified in research and development expense.

The Company recognized total share-based compensation expense related to stock options, grants of restricted stock and common stock to employees, directors and consultants of $10.1 million, $3.1 million and $0.8 million during the years ended June 30, 2010, 2009 and 2008, respectively.

As of June 30, 2010, the total compensation cost related to all non-vested awards not yet recognized is $15.0 million. This amount is expected to be recognized over a remaining weighted average period of 1.79 years.

Stock Options

The Company has granted stock options to certain employees and directors under the Employee Share Option Plan (the “Plan”). The Plan is designed to assist in the motivation and retention of employees and to recognize the importance of employees to the long-term performance and success of the Company. The Company has also granted stock options to certain consultants outside of the Plan. The majority of the options to purchase common stock vest on the anniversary of the date of grant, which ranges from one to three years. Additionally, certain stock options vest upon the closing price of the Company’s common stock reaching certain minimum levels, as defined in the agreements. Finally, certain other stock options vest upon the meeting of certain performance milestones such as the signing of specific agreements and the completion of the Company’s anticipated listing on a U.S. stock exchange. As of June 30, 2010, the Company expects that all such performance conditions that have not currently been met will be met. Share-based compensation expense related to options granted to employees is recognized on a straight-line basis over the related vesting term. Share-based compensation expense related to options granted to consultants is recognized ratably over each vesting tranche of the options.

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Notes to Consolidated Financial Statements — (Continued)

During the year ended June 30, 2010, the Company granted 383,333 options to purchase common stock to certain employees and directors under the Plan. The options are exercisable at prices ranging from A$2.10 to A$7.20 per share and vest over a period of three years. The weighted average grant date fair value of the options is $2.08 per share.

During the year ended June 30, 2010, the Company granted 3,643,429 options to purchase common stock outside the Plan in connection with the Company’s private placement as discussed above.

In November 2009, the Company adopted the 2009 Stock Incentive Plan (the “Stock Incentive Plan”), The Stock Incentive Plan provides for a maximum of 6,000,000 shares of common stock to be reserved for the issuance of stock options and other stock-based awards. Commencing on January 1, 2011, and on each January 1st thereafter, through January 1, 2019, the share reserve will automatically adjust so that it will equal 12.5% of the weighted average number of shares of common stock outstanding.

In November 2009, the Company’s compensation committee approved a new incentive package for its Chief Executive Officer, which included the issuance of 834,000 options to purchase common stock under the Stock Incentive Plan. The options were issued on February 3, 2010 following shareholder approval of the incentive package. The options are exercisable at $6.64 per share and vest upon the trading price of the Company’s common stock reaching certain minimum levels on Nasdaq, which range from $9.45 to $17.82 per share. The grant date fair value of the options was $3.18 per share and the fair value of the options is being expensed on a straight-line basis over a derived service period of 1.92 years.

In January 2010, the Company issued 1,000,000 options to purchase common stock to a consultant under the Stock Incentive Plan in consideration for various services to be performed for the Company. The options to purchase common stock are exercisable at A$6.33 per share and vest upon the trading price of the Company’s CDIs reaching certain minimum levels on the Australian Stock Exchange, which range from A$1.75 to A$3.22 per share. The options are re-measured each reporting date and as of June 30, 2010 were valued at $3.69 per option, which is being expensed ratably over the vesting period of each tranche, which ranges from 0.70 years to 1.70 years. The options will be re-valued on a quarterly basis and marked to market until exercised.

In June 2010, the Company issued 240,000 options to purchase common stock to its Chief Financial Officer under the Stock Incentive Plan. The options are exercisable at $5.28 per share and vest upon the market capitalization of the Company reaching certain minimum levels, ranging from $500.0 million to $1,500.0 million. The grant date fair value of the options was $2.38 per share and the fair value of the options is being expensed on a straight-line basis over a derived service period of 2.70 years.

During the year ended June 30, 2010, the Company granted 70,000 options to purchase common stock to additional employees under the Stock Incentive Plan. The options are exercisable at $5.80 per share and vest over a period of three years. The weighted average grant date fair value of the options was $2.71 per share.

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Notes to Consolidated Financial Statements — (Continued)

The following is a summary of the stock option activity during the year ended June 30, 2010:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual Life		Intrinsic
	Options			Price		(In Years)		Value
								(In thousands)
Outstanding as of July 1, 2009		6,322,500		$	1.68
Granted		6,170,762			6.98
Exercised		(1,606,419	)		1.38
Cancelled		(472,500	)		2.73
Outstanding as of June 30, 2010		10,414,343		$	4.82		2.9	$	18,772
Exercisable as of June 30, 2010		7,228,676		$	4.96		2.4	$	14,083

The aggregate intrinsic value is defined as the difference between the market value of the Company’s common stock as of the end of the period and the exercise price of the in-the-money stock options. The total intrinsic value of stock options exercised during the years ended June 30, 2010, 2009 and 2008 was $5.8 million, $93,000 and $0.1 million, respectively. Of the 3,185,667 non vested options, 1,000,000 are held by consultants.

The Company currently uses authorized and unissued shares to satisfy stock option exercises.

The weighted average fair value of stock options granted during the years ended June 30, 2010, 2009 and 2008 was $3.13, $0.62 and $0.87 per share, respectively. The weighted average fair value of $3.13 during the year ended June 30, 2010 does not include the weighted average fair value of the stock options granted in connection with the Company’s private placement of $2.49 per share.

The following is a summary of stock options outstanding and exercisable as of June 30, 2010:

	Outstanding Options						Exercisable Options
					Weighted						Weighted
	Outstanding		Weighted		Average		Exercisable		Weighted		Average
	as of		Average		Remaining		as of		Average		Remaining
	June 30,		Exercise		Contractual		June 30,		Exercise		Contractual
Range of Exercise Prices	2010		Price		Life (In Years)		2010		Price		Life (In Years)
$0.00 — $1.80		4,185,246	$	1.66		2.3		3,143,579	$	1.65		2.2
$1.81 — $5.80		1,949,329		4.93		4.0		639,329		3.95		2.5
$5.81 — $10.28		4,279,768		7.87		3.0		3,445,768		8.16		2.6
		10,414,343	$	4.82		2.9		7,228,676	$	4.96		2.4

The Company used the following weighted average assumptions in calculating the fair value of options granted during the period from January 27, 2010 to June 30, 2010 (the period subsequent to the Company’s redomiciliation), the period from July 1, 2009 to January 26, 2010 (the period prior to the Company’s redomiciliation) and the years ended June 30, 2009 and 2008 (prior to the Company’s redomiciliation):

	Period From			Period From
	January 27, 2010 to			July 1, 2010 to			Years Ended June 30,
	June 30, 2010			January 26, 2010			2009			2008
Number of stock options granted		1,144,000			1,383,333			3,850,000			2,375,000
Expected dividend yield		0	%		0	%		0	%		0	%
Risk-free interest rate		2.35	%		4.10	%		4.76	%		5.61	%
Expected volatility		60	%		79	%		80	%		55	%
Expected life (in years)		3.99			4.23			4.4			3.5

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Notes to Consolidated Financial Statements — (Continued)

Subsequent to the Company’s redomiciliation, the fair value of each stock option was estimated at the grant date using the Black-Scholes option-pricing model, with the exception of grants subject to market conditions, which were valued using a Monte Carlo option-pricing model. The Company has not historically paid dividends to its stockholders and, as a result, assumed a dividend yield of 0%. The risk free interest rate is based upon the rates of U.S. Treasury bonds with a term equal to the expected term of the option. Due to the Company’s limited Nasdaq trading history, the expected volatility used to value options granted after January 27, 2010 is based upon a blended rate of the historical share price of the Company’s stock on the Australian Stock Exchange and the volatility of peer companies traded on U.S. exchanges operating in the same industry as the Company. The expected term of the options to purchase common stock is based upon the simplified method, which is the mid-point between the vesting date of the option and its contractual term, unless a reasonable alternate term is estimated by management.

Prior to the Company’s redomiciliation, the fair value of each stock option was estimated at the grant date using the Black-Scholes option pricing model, with the exception of grants subject to market conditions which were valued based on a Barrier option pricing model. The Company has not historically paid dividends to its shareholders and, as a result, assumed a dividend yield of 0%. The risk free interest rate is based upon the rates of Australian bonds with a term equal to the expected term of the option. The expected volatility is based upon the historical share price of the Company’s common stock on the Australian Stock Exchange. The expected term of the stock options to purchase common stock is based upon the outstanding contractual term of the stock option on the date of grant.

Restricted Stock

The Company has granted shares of restricted stock to certain employees and consultants under the Stock Incentive Plan. During the period prior to vesting, the holder of the non-vested restricted stock will have the right to vote and the right to receive all dividends and other distributions declared. All non-vested shares of restricted stock are reflected as outstanding; however, they have been excluded from the calculation of basic earnings per share.

For employees the fair value of restricted stock is measured on the date of grant using the closing price of the Company’s common stock on that date. Share-based compensation expense for restricted stock issued to employees is recognized on a straight-line basis over the requisite service period, which is generally the longest vesting period. For restricted stock granted to consultants, the fair value of the awards will be re-valued on a quarterly basis and marked to market until vested. Share-based compensation expense for restricted stock issued to consultants is recognized ratably over each vesting tranche.

In November 2009, the Company’s compensation committee approved the issuance of 1,166,000 shares of restricted stock to the Company’s Chief Executive Officer under the Stock Incentive Plan. The shares were issued in February 2010 following shareholder approval. The shares of restricted stock vest upon the satisfaction of certain performance targets, as defined in the agreement. The grant date fair value of the restricted shares was $6.64 per share.

In June 2010, the Company issued 80,000 shares of restricted stock to the Company’s Chief Financial Officer under the Stock Incentive Plan. The shares of restricted stock vest on certain anniversaries from the date of grant, ranging from one to three years. The grant date fair value of the restricted shares was $5.28 per share.

In March 2010, the Company issued 572,000 shares of restricted stock to certain employees and a consultant. The majority of the shares of restricted stock vest on certain anniversaries from the date of grant, ranging from one to three years. The remaining shares vest upon the satisfaction of certain performance targets, as defined in the agreements. The weighted average grant date fair value of the restricted shares was $6.07 per share. As of June 30, 2010, 200,000 shares of restricted stock were held by a consultant with a fair value of $5.82 per share.

As of June 30, 2010, all shares of restricted stock granted during the year ended June 30, 2010 remain unvested.

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Notes to Consolidated Financial Statements — (Continued)

Grants of Common Stock to Employees

During the years ended June 30, 2009 and 2008, the Company granted 45,885 and 22,033 shares of common stock, respectively, to certain employees. During the years ended June 30, 2009 and 2008, the Company recorded a charge to operations of $44,000 and $48,000 respectively, related to these awards.

During the year ended June 30, 2009, the Company granted 1,666,667 shares of common stock to its Chief Executive Officer. The shares are subject to certain transfer restrictions in which 833,333 cannot be sold until the first anniversary of the date of grant and 833,334 cannot be sold until the second anniversary of the date of grant. During the year ended June 30, 2009, the Company recorded $1.5 million of compensation expense related to the fair value of these awards.

5.   Property, Plant and Equipment and Construction-in-Progress

Property, plant and equipment consist of the following:

	June 30,
	2010			2009
	(In thousands)
Machinery and equipment	$	10,848		$	5,906
Furniture and fixtures		1,265			787
Construction in progress		18,560			3,041
Leasehold improvements		1,026			1,067
Land		2,036			—
		33,735			10,801
Less: accumulated depreciation and amortization		(3,763	)		(1,664	)
Property, plant and equipment, net	$	29,972		$	9,137

Construction in progress as of June 30, 2010 consists primarily of amounts incurred in connection with the construction of the Company’s new manufacturing facility and related equipment. Construction in progress as of June 30, 2009 consists primarily of amounts incurred in connection with the construction of machinery used to manufacture the Company’s Unitract 1 mL Syringe.

In November 2009, the Company acquired 38 acres of land in York County, Pennsylvania for $2.0 million and entered into a development agreement with Keystone Redevelopment Group, LLC (“Keystone”) to develop its new 165,000 square foot office, manufacturing, warehousing and distribution facility. In accordance with the agreement, Keystone is assisting the Company with the selection of, as well as the review and management of, architects, engineers, designers, contractors and other experts and consultants engaged to assist in the development of the new facility. Additionally, Keystone is assisting the Company in obtaining financing for the facility. Under the terms of the agreement, the Company will pay Keystone a total of $0.8 million.

The Company has also entered into a construction agreement for the new facility for a total of 1.25% of the cost of work, which is estimated to be $0.3 million and an agreement with an architectural firm for design and structural, mechanical, and electrical engineering services for the new facility for a total cost of $1.6 million.

The Company began construction of its new facility in November 2009.

In November 2009, the Company signed a purchase agreement with Mikron Assembly Technology for the development and supply of an automated assembly system to support the commercial production of its Unifill syringe. The development of the system began in December 2009, with scheduled completion and installation into the Company’s new facility during the fourth quarter of calendar 2010. The Company anticipates that this automated assembly system will have a target production capacity of approximately 60.0 million units per year.

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Notes to Consolidated Financial Statements — (Continued)

During the year ended June 30, 2010, the Company incurred $5.5 million in costs for equipment related to production capacity in the new facility. The Company has commitments for construction of the new facility and open purchase orders relating to equipment in the amount of $23.8 million which it expects to fulfill during the year ending June 30, 2011.

6.   Goodwill and Intangible Assets

The changes in the carrying amount of goodwill during the years ended June 30, 2009 and 2010 are as follows:

	(In thousands)
Balance as of July 1, 2008	$	5,555
Issuance of stock options in connection with the acquisition of Integrated BioSciences, Inc		457
Commitment to issue common stock to former Unitract Syringe Pty Limited shareholders		5,070
Foreign currency translation		(847	)
Balance as of June 30, 2009		10,235
Foreign currency translation		557
Balance as of June 30, 2010	$	10,792

In connection with the acquisition of Unitract Syringe Pty Limited in October 2002, the Company agreed to issue 1,666,667 shares of common stock to certain founders of Unitract Syringe Pty Limited if the Company reported net income (under International Financial Reporting Standards) of at least A$6.5 million during any fiscal year prior to October 31, 2014, as amended. The agreement also provided for the issuance of an additional 1,666,667 shares of common stock upon the Company reporting net income of at least A$12.0 million during any fiscal year prior to October 31, 2014. During the year ended June 30, 2009, the Company met both the net income requirements, and as a result, has accrued for the issuance of 3,333,333 shares based upon the closing price of the Company’s common stock as of June 30, 2009 which was recorded as additional goodwill of $5.1 million. These shares were issued in November 2009 in full satisfaction of the Company’s obligation to the founders.

During the year ended June 30, 2008, as approved by the stockholders, the Company granted options to purchase 1,166,667 shares of common stock to certain selling shareholders in connection with the acquisition of Integrated BioSciences, Inc. The vesting terms of the options were based upon the signing of the exclusive licensing agreement with sanofi-avenits. During the year ended June 30, 2009, options to purchase 500,000 shares of common stock vested and as a result, the Company has recorded $0.5 million as an increase to goodwill based on the fair value of these options as determined using the Black-Scholes option-pricing model. During the year ended June 30, 2009, the remaining options to purchase 666,667 shares of common stock were cancelled, as the related financial milestones were not achieved.

Intangible assets consist of patents acquired in a business acquisition of $80,000. Related accumulated amortization as of June 30, 2010 and 2009 was $40,000 and $37,000 respectively, and future amortization expense is scheduled to be $5,000 annually.

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Notes to Consolidated Financial Statements — (Continued)

7.   Accrued Expenses

Accrued expenses consist of the following:

	June 30,
	2010		2009
	(In thousands)
Accrued payroll and other employee related expenses	$	1,405	$	671
Accrued construction costs related to the new manufacturing facility		1,003		—
Accrued other		503		356
Provision for the issuance of common stock to former Unitract Syringe Pty Limited shareholders		—		5,070
Total accrued expenses	$	2,911	$	6,097

8.   Commitments and Contingencies

The Company leases certain facilities, office equipment and automobiles under non-cancellable operating leases. The future minimum lease payments related to the Company’s non-cancellable operating lease commitments as of June 30, 2010 were as follows:

For the Year Ending June 30,
	(In thousands)
2011	$	285
2012		34
	$	319

Rental expenses under operating leases during the years ended June 30, 2010, 2009, and 2008 was $0.6 million, $0.7 million and $0.6 million, respectively.

From time to time, the Company is involved in various legal proceedings, claims, suits and complaints arising out of the normal course of business. Based on the facts currently available to the Company, management believes that these claims, suits and complaints are adequately provided for, covered by insurance, without merit or not probable that an unfavorable outcome will result.

9.   Long-Term Debt

Long-term debt consists of the following:

	June 30,
	2010		2009
	(In thousands)
Bank term loans	$	2,393	$	2,709
Commonwealth of Pennsylvania assisted loans		332		424
Other		16		—
		2,741		3,133
Less: current portion of long-term debt		1,648		405
Total long-term debt	$	1,093	$	2,728

Bank term loans consist of four term loans payable. The loans bear interest at a rate of prime (3.25% as of June 30, 2010) plus 1.50% (4.75% as of June 30, 2010) per annum and mature on dates ranging from December 2010 through August 2021. The borrowings under the bank term loans are collateralized by the Company’s accounts

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Notes to Consolidated Financial Statements — (Continued)

receivable, inventories and certain machinery and equipment and are subject to certain financial covenants which require the Company’s tangible assets to equal at least 10% of the stockholders’ equity determined in accordance with GAAP. Under the term loan agreements, the Company is not permitted to pay cash dividends without the prior written consent of the lender. Certain of these bank term loans also have a minimum debt service ratio financial covenant, with which the Company was not in compliance as of June 30, 2010. The $1.3 million long-term portion outstanding as of June 30, 2010 under these bank term loans is classified in the current portion of long-term debt. During September 2010, the Company received a waiver from its lender for its previous non-compliance with this covenant.

The Company has qualified for the two Commonwealth of Pennsylvania assisted loans for the purchase of specific machinery and equipment. These loans bear interest at rates ranging from 2.75% to 3.25% per annum and mature on dates ranging from July 2011 through July 2013. The borrowings under these loans are collateralized by the related equipment.

As of June 30, 2010, aggregate maturities of long-term obligations are as follows:

For the Year Ending June 30,
	(In thousands)
2011	$	383
2012		273
2013		271
2014		271
2015		197
Thereafter		1,346
	$	2,741

10.   Loss Per Share

The Company’s net loss per share is as follows:

	Year Ended June 30,
	2010			2009			2008
	(In thousands, except share and per share data)
Numerator
Net loss	$	(29,748	)	$	(517	)	$	(8,537	)
Denominator
Weighted average number of shares used to compute basic loss per share		46,837,066			34,426,353			32,938,477
Effect of dilutive options to purchase common stock		—			—			—
Weighted average number of shares used to compute diluted loss per share		46,837,066			34,426,353			32,938,477
Basic loss per share	$	(0.64	)	$	(0.02	)	$	(0.26	)
Diluted loss per share	$	(0.64	)	$	(0.02	)	$	(0.26	)

Due to the Company’s net loss position, unvested shares of restricted stock (participating securities) totaling 489,178 were excluded from the calculation of basic and diluted loss per share during the year ended June 30, 2010. There were no shares of restricted stock outstanding during the years ended June 30, 2009 and 2008.

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Notes to Consolidated Financial Statements — (Continued)

In addition, stock options (non-participating securities) totaling 8,234,060, 5,362,310 and 7,739,224 during the years ended June 30, 2010, 2009 and 2008, respectively, were excluded from the calculation of diluted loss per share, as their effect would have been anti-dilutive. Certain of these stock options were excluded solely due to the Company’s net loss position. Had the Company reported net income during the years ended June 30, 2010, 2009 and 2008, these shares would have had an effect of 2,316,360, 237,610 and 172,318 diluted shares, respectively, for purposes of calculating diluted loss per share.

11.   Income Taxes

For the years ended June 30, 2010, 2009 and 2008, income (loss) before income taxes consists of the following:

	Years Ended June 30,
	2010			2009			2008
	(In thousands)
United States	$	(26,773	)	$	(1,448	)	$	(119	)
Foreign		(2,975	)		931			(8,418	)
	$	(29,748	)	$	(517	)	$	(8,537	)

Tax Rate Reconciliation

Income tax expense (benefit) is as follows:

	Year Ended June 30,
	2010								2009								2008
	Current		Deferred			Total			Current		Deferred			Total			Current		Deferred			Total
	(In thousands)
U.S. Federal	$	—	$	(8,692	)	$	(8,692	)	$	—	$	(1,070	)	$	(1,070	)	$	—	$	(755	)	$	(755	)
State		—		(2,554	)		(2,554	)		—		(339	)		(339	)		—		(123	)		(123	)
Foreign		—		553			553			—		(663	)		(663	)		—		(9,883	)		(9,883	)
Changes in valuation allowance		—		10,693			10,693			—		2,072			2,072			—		10,761			10,761
Income tax provision	$	—	$	—		$	—		$	—	$	—		$	—		$	—	$	—		$	—

Income tax expense (benefit) was $0 for the years ended June 30, 2010, 2009 and 2008 and differed from the amounts computed by applying the U.S. federal income tax rate to pretax income as a result of the following:

	Year Ended June 30,
	2010			2009			2008
Tax at U.S. statutory rate		(35	)%		(35	)%		(35	)%
State taxes, net of federal benefit		(9	)%		(11	)%		(6	)%
Non-deductible and non-taxable items		7	%		2	%		1	%
Change in valuation allowance		37	%		44	%		40	%
		0	%		0	%		0	%

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UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

Significant Components of Deferred Taxes

The tax effects of temporary differences and net operating losses that give rise to significant portions of deferred tax assets (liabilities) at June 30, 2010 and 2009 are presented below:

	June 30,
	2010			2009
	(In thousands)
Net operating loss carryforwards	$	15,640		$	5,592
Share-based compensation expense		2,038			—
Deferred revenue		2,625			3,170
Depreciation differences		(190	)		(239	)
Valuation allowance		(20,113	)		(8,523	)
Net deferred taxes	$	—		$	—

The valuation allowance for deferred tax assets as of June 30, 2010 and 2009 was $20.1 million and $8.5 million, respectively. The net change in the total valuation allowance was an increase of $11.6 million. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making the assessment as to the realizability of deferred tax assets. In order to fully realize the deferred tax assets, the Company will also need to generate future taxable income prior to the expiration of the net operating loss carryforwards. Based upon the level of historical taxable income and uncertainty regarding projections for future taxable income over the periods in which the deferred tax assets are deductible or can be utilized, management does not believe it is more likely than not that the Company will realize the benefits of these net operating losses and deductible temporary differences, as of June 30, 2010 and 2009. Therefore a full valuation allowance has been provided. The amount of the net deferred tax assets considered realizable, however, could change if estimates of future taxable income during the carryforward period are increased.

As of June 30, 2010, the Company had net operating loss carryforwards for U.S federal, state and Australian income tax purposes of approximately $24.0 million, $24.0 million and $17.0 million, respectively, which are available to offset future taxable income. The U.S. federal and state net operating loss carryforwards begin to expire in 2023. The Australian net operating losses do not expire.

The Australian net operating loss carryforwards of approximately $17.0 million as of June 30, 2010 are subject to either the continuity of ownership or same business test (as defined under Australian tax law) that could limit or substantially eliminate the Company’s ability to use these carryforwards. If there have been or will be changes in the Company’s ownership or Australian business operations before these net operating loss carryforwards are utilized, they may be unavailable to reduce taxable income in the future. Further, under provision of the Internal Revenue Code, the utilization of a U.S corporation’s federal and state net operating loss carryforwards may be significantly limited following a change in ownership of greater than 50% within a three-year period. The Company’s federal and state net operating loss carryforwards may, therefore, be subject to an annual limitation. In addition, state net operating loss carryforwards may be further limited in Pennsylvania, which has a limitation equal to the greater of 12.5% of taxable income after modifications and apportionment, or $3.0 million on state net operating losses utilized in any one year.

The Company has adopted the provisions of Interpretation 48, included in ASC Subtopic 740-10. Management has evaluated the tax positions taken and has concluded that no liability for unrecognized tax benefits was required to be recorded for the years ended June 30, 2010 and 2009.

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UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The Company files Australian, consolidated U.S. federal and state income tax returns. The Company is not subject to examination in any jurisdiction at this time. As a result of the net operating losses in prior years, the statute of limitations will remain open for a period following any utilization of net operating loss carryforwards and as such these periods remain subject to examination.

12.   Employee Benefit Plan

The Company has a retirement savings 401(k) plan covering all U.S. employees. Participating employees may contribute up to 100% of their pre-tax earnings, subject to the statutory limits. During the years ended June 30, 2010, 2009 and 2008, the Company did not match any employee contributions.

13.   Business Alliances

sanofi-aventis

On June 30, 2008, the Company signed an exclusive licensing agreement with a pharmaceutical company, sanofi-aventis, which was amended in June 2009. Under the amended agreement, the Company has granted sanofi-aventis an exclusive license to certain of the Company’s intellectual property in order and solely to develop, in collaboration with the Company, the Unifill syringe for use in and sale in the pre-filled syringe market within those therapeutic areas to be agreed upon between the Company and sanofi-aventis and a non-exclusive license outside those therapeutic areas that are exclusive to sanofi-aventis or after the expiration of the exclusive license with sanofi-aventis. The exclusive license granted thereunder has an initial term expiring on June 30, 2014. If during the term of the exclusive license, sanofi-aventis has purchased the Unifill syringe for use with a particular drug product, sanofi-aventis will receive a ten-year extension of the term of the exclusive license, which extension will be reduced to five years if sanofi-aventis does not sell a minimum of 20.0 million units of the product in any of the first five years of such ten-year extension period. Pursuant to the exclusive licensing agreement, sanofi-aventis has paid the Company a 10.0 million euros ($13.0 million) up front non-refundable one-time fee. During the year ended June 30, 2009, the Company recognized $2.5 million of this up front payment as revenue and deferred $10.6 million which is being recognized on a straight-line basis over the remaining term of the agreement. During the year ended June 30, 2010, the Company recognized $2.6 million of this up-front payment as revenue.

Under the exclusive licensing agreement, the Company is not precluded from using certain of its intellectual property to develop, license and sell any products in any market other than the ready-to-fill syringe market, or from entering into licensing or other business arrangements with other pharmaceutical companies for the ready-to-fill syringe market outside those therapeutic areas that are exclusive to sanofi-aventis, or after the expiration of the exclusive license with sanofi-aventis. If the Company grants a license to a third party in respect of the ready-to-fill syringe market, then the Company is required to pay sanofi-aventis 70% of any access, license or other upfront fee received from such third party for access to purchase the products until the Company’s payments to sanofi-aventis have totaled 10.0 million euros, following which the Company is required to pay 30% of such fees it receives through the end of the initial exclusivity period. The Company is also required to pay sanofi-aventis an annual royalty payment of 5% of the revenue generated from any sale of the Unifill syringe to third parties, up to a maximum amount of 17.0 million euros in such royalty payments.

Under a related industrialization agreement, signed on June 30, 2009, sanofi-aventis has agreed to pay the Company up to 17.0 million euros ($23.4 million) in milestone-based payments to fund the completion of the Company’s industrialization program for the Unifill syringe. The industrialization program began in July 2008 and is scheduled to be completed by the end of calendar 2010. Unless terminated earlier, the industrialization agreement’s term extends to the completion of the industrialization program. During the years ended June 30, 2010 and 2009, the Company recognized $6.3 million and $13.6 million in revenue related to the milestones achieved, respectively.

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UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The industrialization agreement provides that, subject to the full completion of the industrialization program, the parties will negotiate a supply agreement for the manufacture and purchase of the final product on a commercial scale. The supply agreement will provide that sanofi-aventis and its affiliates will purchase the final product exclusively from the Company, and the industrialization agreement provides that the Company is not required to commit more than 30% of our expected installed production capacity to sanofi-aventis and its affiliates for the 12 months following the receipt of a purchase order. Any order of sanofi-aventis, together with its other orders, that will exceed the 30% capacity limit will require up to a maximum of 24 months lead time before the Company is required to commence delivery of that order.

On February 25, 2010, the Company and sanofi-aventis executed a letter agreement, pursuant to which the parties agreed on a list of therapeutic drug classes within which sanofi-aventis has the exclusive right to purchase the Unifill syringe. Pursuant to the letter agreement and the exclusive licensing agreement, sanofi-aventis has secured exclusivity for the Unifill syringe within the therapeutic classes of antithrombotic agents and vaccines until June 2014 and has also secured exclusivity in an additional six smaller subgroups that fall within the other therapeutic classes that the Company believes represent new market opportunities in the pharmaceutical use of prefilled syringes.

Stason Pharmaceuticals

In March 2010, the Company signed an exclusive five year agreement with Stason Pharmaceuticals, a U.S. based pharmaceutical company, to market its Unitract 1mL syringe in Japan, China and Taiwan. Under the agreement, Stason Pharmaceuticals is required to purchase a minimum of 1.0 million units of the Unitract 1mL syringe per year during the term of the contract.

14.   Financial Instruments

The Company does not hold or issue financial instruments for trading purposes. The estimated fair values of the Company’s financial instruments are as follows:

	June 30, 2010				June 30, 2009
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
	(In thousands)
Assets :
Cash equivalents — certificates of deposit	$	18,629	$	18,629	$	243	$	243

The carrying amount of the Company’s cash equivalents, which includes certificates of deposit, accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short term maturities of these items. The estimated fair value of the Company’s debt approximates its carrying value based upon the rates that the Company would currently be able to receive for similar instruments of comparable maturity.

The Company categorizes its assets and liabilities measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The levels in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

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UNILIFE CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements — (Continued)

The following table presents the Company’s assets that are measured at fair value on a recurring basis for the periods presented:

	Fair Value Based On
	Quoted Market
	Prices in Active		Significant		Significant
	Markets for		Other		Unobservable		Total
	Identical Assets		Observable Inputs		Inputs		Fair Value
	(Level 1)		(Level 2)		(Level 3)		Measurements
	(In thousands)
Cash equivalents — certificates of deposit (June 30, 2010)	$	—	$	18,629	$	—	$	18,629
Cash equivalents — certificates of deposit (June 30, 2009)	$	—	$	243	$	—	$	243

15.   Quarterly Results (unaudited)

	Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended
	September 30, 2009			December 31, 2009			March 31, 2010			June 30, 2010
	(In thousands, except per share data)
Year Ended June 30, 2010
Revenues	$	3,108		$	3,245		$	2,417		$	2,652
Gross profit		2,279			2,771			1,885			2,016
Net loss		(2,064	)		(5,915	)		(12,064	)		(9,705	)
Basic loss per share	$	(0.06	)	$	(0.13	)	$	(0.23	)	$	(0.18	)
Diluted loss per share	$	(0.06	)	$	(0.13	)	$	(0.23	)	$	(0.18	)

	Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended
	September 30, 2008			December 31, 2008			March 31, 2009			June 30, 2009
	(In thousands, except per share data)
Year Ended June 30, 2009
Revenues	$	2,305		$	5,822		$	4,146		$	7,703
Gross profit		1,201			4,806			3,492			7,051
Net (loss) income		(1,616	)		(861	)		(271	)		2,231
Basic (loss) income per share	$	(0.05	)	$	(0.03	)	$	(0.01	)	$	0.06
Diluted (loss) income per share	$	(0.05	)	$	(0.03	)	$	(0.01	)	$	0.06

Per share amounts for the quarters may not add to the annual amount due to differences in the weighted average common shares outstanding during the periods.

16.   Subsequent Events

On August 13, 2010, the Company entered into a Credit Agreement with Univest National Bank and Trust Co. (“Univest”) pursuant to which Univest agreed to provide the Company with a loan in an amount not to exceed $7.0 million. The Company intends to use the proceeds to provide short-term financing for the construction of its new manufacturing facility. Borrowings under the Credit Agreement bear interest, payable monthly, at a rate equal to the greater of the prime rate plus 0.5% or 3.75% and are collateralized by a $7.0 million cash deposit. The Credit Agreement expires on February 13, 2011.

In August 2010, the Company received 501(k) market clearance from the U.S. Food and Drug Administration (“FDA”) for the sale of its Unitract 1 mL Tuberculin syringe in the United States.

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Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.   Controls and Procedures

Disclosure Controls and Procedures

Our management with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as such terms is defined in Rules 13a-15(e) under the Exchange Act of 1934, as amended), as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control

There has not been any change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

Item 9B.   Other Information

None.

PART III

Item 10.   Directors, Executive Officers and Corporate Governance

The following table sets forth the name, age and position of each of our directors and executive officers.

Name	Age		Position
Slavko James Joseph Bosnjak		61	Chairman and Director
Alan Shortall		56	Director and Chief Executive Officer
John Lund		44	Director
William Galle		70	Director
Jeff Carter		52	Director
Mary Katherine Wold		57	Director
Marc S. Firestone		50	Director
R. Richard Wieland II		65	Chief Financial Officer and Executive Vice President
Eugene Shortall		59	Senior Vice President of Business Development
Bernhard Opitz		53	Senior Vice President of Operations
Mark V. Iampietro		57	Vice President of Quality and Regulatory Affairs
Stephen Allan		36	Vice President of Marketing and Communications
J. Christopher Naftzger		43	Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer

Biographical Summaries

Slavko James Joseph Bosnjak.  Mr. Bosnjak has served as a director of UMSL since February 2003 and of Unilife Corporation since November 2009 and as Chairman of the board of UMSL since April 2006 and of Unilife Corporation since November 2009, Mr. Bosnjak has been a co-owner and director of the Le Meridien Lav Hotel in

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Split, Croatia since 2002 and is chairman and co-founder of Ultimate Outdoor Ltd., an Australian outdoor advertising company, Mr. Bosnjak is chairman, and has an indirect interest through the family company Bosnjak Investment Group Pty Ltd, of Chiron Commercial Vehicles Pty Ltd and its subsidiaries, situated in Malaysia, a company which manufactures bus bodies for export to Australia. Mr Bosnjak was a director of Bosnjak Holdings Pty Ltd and its subsidiaries including Westbus Pty Ltd. from 1975 to 2001 and the chairman of Westbus Pty Ltd, between 1990 and 2001. He has also held positions on Commonwealth and New South Wales government advisory bodies, including the Greater Western Sydney Economic Development Board, and the GROW Employment Council. Mr. Bosnjak also served as the Chairman of the Tourism Council of Australia and Bus 2000 Ltd, which coordinated bus services for the Sydney 2000 Olympic Games. Mr. Bosnjak was awarded an Order of Australia Medal in 1994 for his services to transport and the community, and also holds an honorary doctorate from the University of Western Sydney for his services related to employment growth and economic development. The Board believes that Mr. Bosnjak’s broad government and investment experience in numerous industries across Australia, Asia and Europe, as well as his long history with the Company and deep knowledge of our business, make him well-suited to serve as a director.

Alan Shortall.  Mr. Shortall has served as Chief Executive Officer and director of UMSL since September 2002 and of Unilife Corporation since July 2009. Mr. Shortall co-founded Unilife in July 2002 and has guided the growth of Unilife since then. In 2008, the trade magazine Medical Device and Diagnostic Industry named him as one of 100 Notable People in the medical device industry worldwide. Mr. Shortall is the brother of Eugene Shortall, our Senior Vice President of Business Development. The Board believes that Mr. Shortall’s strategic vision and intimate understanding of our safety syringe technology and products, as well as his substantial marketing and commercial experience, make him well-suited to serve as a director. Mr. Shortall has been guiding the growth of Unilife since its founding.

John Lund.  Mr. Lund has served as a director of UMSL and Unilife Corporation since November 2009. Mr. Lund has also served as managing partner of M&A Holdings, LLC, a private consulting company since July 2003, and as Vice President Finance and Controller of E-rewards, Inc., an internet market research company since February 2009. Mr. Lund also served as Vice President and Controller of Nexstar Broadcasting Group, Inc., a NASDAQ listed television broadcasting company, from March 2008 to November 2008, Vice President of Finance and Corporate Controller of LQ Management, LLC (LaQuinta) from November 2006 to March 2008, and Corporate Controller of ExcellerateHRO from January 2005 to October 2006. Prior to that, Mr. Lund held Controller and Chief Financial Officer positions for various companies, and was a Manager at KPMG. The Board believes that Mr. Lund’s expertise in finance, accounting and experience with corporate transactions and publicly listed companies make him well-suited to serve as a director.

William Galle.  Mr. Galle has served as a director of UMSL since June 2008 and of Unilife Corporation since November 2009. Mr. Galle was also an independent director of American Marketing Complex in New York City from October 2007 to December 2009. Since 2009, Mr. Galle has been affiliated with Bradley Woods, a 40 year-old New York City-based independent research and investment banking firm specializing in federal regulatory and legislative developments impacting substantial investor portfolios. Mr. Galle is President of Diversified Portfolio Strategies LLC in Washington D.C. since 1993, which provides alternative investment advisory services for institutions and substantial investors. Mr. Galle is a graduate of Columbia University, Rutgers University, and the New York Institute of Finance. The Board believes that Mr. Galle’s investment advisory experience makes him a qualified member of the Board.

Jeff Carter.  Mr. Carter has served as a director of UMSL since April 2006 and of Unilife Corporation since November 2009. From February 2005 until January 2009, Mr. Carter served as Chief Financial Officer of UMSL. He has also served as Company Secretary of UMSL from March 2007 to July 2010. Mr. Carter is a chartered accountant and holds a master’s degree in applied finance from Macquarie University of Sydney. Mr. Carter was a Chief Financial Officer of various publicly listed healthcare companies prior to joining UMSL. Also, Mr. Carter was Strategic Planning Manager for Coca-Cola Amatil and Manager Corporate Development International for Santos. He has international experience with these companies and was formerly a Senior Manager of Touche Ross before moving into investment banking with Canadian Imperial Bank of Commerce. The Board believes that Mr. Carter’s experience in financial and management roles, with a strong background in the healthcare industry, make him a valuable member of the Board.

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Mary Katherine Wold.  Ms. Wold has served as a director of Unilife Corporation since May 2010. Ms. Wold served as Senior Vice President of Finance from 2007 to 2009, Senior Vice President of Tax and Treasury from 2005 to 2007 and Vice President of Tax from 2002 to 2005, of Wyeth, a NYSE-listed pharmaceutical company, which was acquired by Pfizer in October 2009. Prior thereto, Ms. Wold spent 17 years with the international law firm of Shearman & Sterling based in New York, specializing in international tax planning for multinational corporations and in the tax aspects of mergers and acquisitions, capital markets and private equity transactions. Ms. Wold received her law degree from the University of Michigan and her Bachelor of Arts degree from Hamline University in St. Paul, Minnesota. The Board believes that Ms. Wold’s knowledge in financial, tax, and treasury matters along with her broad experience in global operations at one of the world’s largest pharmaceutical companies make her a valuable member of the Board.

Marc S. Firestone.  Mr. Firestone has served as a director of Unilife Corporation since July 2010. Mr. Firestone serves as Executive Vice President and General Counsel for Kraft Foods Inc., a Fortune 100 company. Prior to his position at Kraft Foods, Mr. Firestone held senior executive positions for Philip Morris Companies and its subsidiaries, including as Senior Vice President and General Counsel, Philip Morris International, and Senior Vice President of Regulatory Affairs, Phillip Morris Companies. Before joining Philip Morris, he was an attorney with Arnold & Porter in Washington, D.C. He holds a juris doctorate from Tulane University School of Law in New Orleans, and a bachelor’s degree from Washington & Lee University in Virginia. The Board believes that Mr. Firestone’s legal and government relations knowledge and experience make him a valuable member of the Board.

R. Richard Wieland II.  Mr. Wieland has served as Chief Financial Officer and Executive Vice President since June 2010. Mr. Wieland served as Chief Financial Officer of Cytochroma Inc., a privately-held specialty pharmaceutical company, from May 2008 to May 2009 and served as Executive Vice President and Chief Financial Officer of Advanced Life Sciences Holdings, Inc., a Nasdaq-listed clinical-stage biopharmaceutical company, from June 2004 to April 2008. Mr. Wieland obtained his B.A. in Accounting and Economics from Monmouth College and his M.B.A. from Washington University.

Eugene Shortall.  Mr. Shortall has served as Senior Vice President of Business Development since May 2010. From February 2009 to May 2010 Mr. Shortall served as Senior Vice President of RTFS of UMSL and of Unilife Corporation from November 2009 to May 2010. From October 2007 to February 2009 he served as our RTFS Project Director. From June 2003 to October 2007, Mr. Shortall was a consultant for the Public Institute for Social Security in Kuwait and was previously employed as a consultant for Behbehani National Construction. Mr. Shortall is the brother of Alan Shortall, our Chief Executive Officer and director.

Bernhard Opitz.  Mr. Opitz has served as Senior Vice President of Operations of UMSL since December 2008 and of Unilife Corporation since November 2009. From August 2007 to June 2008, Mr. Opitz served as Vice President — Manufacturing at Nanosphere, Inc., a Nanotechnology-based molecular diagnostics company. From December 2002 to July 2006, he was the Vice President — Engineering/Operations at Wells’ Dairy, Inc., a large manufacturer of ice cream. From September 2000 to April 2002, he was Senior Vice President of Operations at Ikonisys Inc., a cell-based diagnostics company. From 1980 to 2000, Mr. Opitz also held various positions at Bayer AG including project engineer, manager of plant engineering, manager of engineering, production manager, vice president of operations, and senior vice president of engineering. Mr. Opitz holds a Master of Science degree in mechanical/process engineering from Technical University Graz in Austria.

Mark V. Iampietro.  Mr. Iampietro has served as Vice President of Quality and Regulatory Affairs of UMSL since October 2008 and of Unilife Corporation since November 2009. From May 2002 to July 2008, Mr. Iampietro was Vice President of Quality, Regulatory and Clinical Operations at Spherics, Inc., a pharmaceutical manufacturer, where he managed various phases of quality, regulatory, and clinical programs. Mr. Iampietro holds American Society for Quality certifications as both a quality and reliability engineer and holds a Bachelor of Science degree in life sciences with a minor in engineering from Worcester Polytechnic Institute.

Stephen Allan.  Mr. Allan has served as Vice President of Marketing and Communications of UMSL since October 2008 and of Unilife Corporation since November 2009. He served as our Director of Communications from November 2007 to October 2008 and our Manager of Communications from July 2002 to November 2007. Prior to joining Unilife, Mr. Allan owned and operated his own Australian public relations firm, which assisted in the

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management of media relations and government liaison for industry groups in the transport, tourism and economic development sectors. He managed media liaison activities relating to bus transportation during the Sydney 2000 Olympic Games. He also spent five years as a journalist for various Sydney-based newspaper groups. Mr. Allan holds a Bachelor of Communications from Charles Sturt University.

J. Christopher Naftzger.  Mr. Naftzger has served as Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer of Unilife Corporation since July 2010. Mr. Naftzger served as Assistant General Counsel and Assistant Secretary of Chesapeake Corporation, a NYSE-traded packaging company for the pharmaceutical and healthcare industries, from July 2007 to May 2009 and served as Senior Counsel of Koch Industries, Inc., the second largest privately held company in the U.S., from June 2006 to June 2007. Prior to joining Koch, Mr. Naftzger was a partner at Blank Rome LLP, an international Am Law 100 firm. Mr. Naftzger obtained his B.A. in History and Political Science from Hampden-Sydney College and his J.D. from the Willamette University College of Law.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our common stock to file with the SEC reports of ownership and changes in ownership of our common stock. Our directors, executive officers and greater than 10% beneficial owners of our common stock are required by SEC regulation to furnish us with copies of all Section 16(a) reports they file. Based solely upon information furnished to us and contained in reports filed with the SEC, as well as any written representations that no other reports were required, we believe that all Section 16(a) reports of our directors, executive officers and greater than 10% beneficial owners were filed timely for the fiscal year ended June 30, 2010.

Code of Ethics

We have a code of ethics that applies to all of our directors and employees, including our principal executive, financial and accounting officers. Our code of ethics is available on our website at www.unilife.com under the investor relations section titled Corporate Governance. We intend to disclose any amendment to, or waiver from, a provision of the code of ethics that applies to our principal executive, financial or accounting officer in the investor relations section of our website.

Audit Committee

Reference is made to the “Director Independence” section in Item 13.

Item 11.   Executive Compensation

RISK MANAGEMENT AND INCENTIVE COMPENSATION

Senior management has reviewed the Company’s compensation systems and has determined that it is not reasonably likely that our compensation plans would have a material adverse effect on the Company for the following reasons:

•  Any financial performance objectives of our annual cash incentive and equity grant programs are objectives that are reviewed and approved by our board of directors.

•  The performance measures for our annual cash incentive program for our named executive officers are based on the same set of Company goals as for other employees.

•  Our annual cash incentive program is designed to reward bonus-eligible employees for committing to and delivering goals that are aligned with our strategic plan, with objectives linked to the strategic plan or performance of our Company.

•  The goals are reviewed by senior management and our board of directors to ensure that they are focused on business activity that advances the stockholders’ interests and do not encourage excessive or potentially damaging risk-taking.

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•  The amount of annual cash incentive compensation is not set at such an aggressive level that it would induce bonus-eligible employees to take inappropriate risks that could threaten our financial and operating stability.

•  Because the performance measures for our annual cash incentive program are based on strategic objectives of our business plan, none of the goals approved under our annual cash incentive compensation program would encourage manipulation of reported earnings to enhance the compensation of any employee.

•  Our compensation programs are balanced to avoid too much focus on equity or annual cash incentive compensation, do not contain highly leveraged payout curves or uncapped payouts, do not set unreasonable thresholds and do not encourage short-term business decisions to meet payout thresholds.

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This Compensation Discussion and Analysis describes our compensation philosophy and practices for those individuals who were our most highly compensated executives based on their fiscal 2010 compensation. We refer to these executives in this Annual Report on Form 10-K Compensation Discussion and Analysis as “named executive officers”.

Our named executive officers are:

•  Alan Shortall, who is our Chief Executive Officer;

•  R. Richard Wieland II, who became our Executive Vice President and Chief Financial Officer in June 2010;

•  Daniel Calvert, who resigned as our Chief Financial Officer in June 2010;

•  Eugene Shortall, who is our Senior Vice President, Business Development;

•  Bernhard Opitz, who is our Senior Vice President, Operations; and

•  Mark V. Iampietro, who is our Vice President, Quality Systems and Regulatory Affairs.

Executive Summary

During fiscal 2010, we attained several strategic milestones despite the difficult worldwide economic environment that has continued since the downturn in 2008. Our recent business developments include the following:

•  Pennsylvania Economic Development Assistance:  In October 2009, we accepted a $5.2 million offer of assistance from the Commonwealth of Pennsylvania. The offer includes $2.2 million in a low interest loan for the development of our new global headquarters and manufacturing facility. The offer also includes a $2.0 million grant for debt service, a $0.5 million opportunity grant as well as $0.5 million in tax credits.

•  Development of New Global Headquarters and Manufacturing Facility: In November 2009, we acquired 38 acres of land in York County, Pennsylvania for the development of our new 165,000 square foot office, manufacturing, warehousing and distribution facility. We began construction in November 2009 and made substantial progress towards its completion.

•  Redomiciliation and Nasdaq listing:  In the third quarter of fiscal 2010, we completed a redomiciliation from Australia to the State of Delaware and successfully listed our common stock on the Nasdaq Global Market.

•  Agreement with sanofi-aventis on exclusivity list:  On February 25, 2010, we executed a letter agreement with sanofi-aventis, pursuant to which the parties agreed on a list of therapeutic drug classes within which sanofi-aventis has the exclusive right to purchase the Unifill syringe. Sanofi-aventis has secured exclusivity for the Unifill syringe within the full therapeutic classes of antithrombotic agents and vaccines until June 30, 2014 and has also secured exclusivity in an additional four smaller subgroups that fall within other

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therapeutic classes that we believe represent new market opportunities in the pharmaceutical use of prefilled syringes.

•  Agreement with Stason Pharmaceuticals:  In March 2010, we signed an exclusive five year agreement with Stason Pharmaceuticals; a U.S. based pharmaceutical company to market our Unitract 1mL syringe in Japan, China and Taiwan. Under the agreement, Stason Pharmaceuticals is required to purchase a minimum of 1.0 million units of the Unitract 1 mL syringe per year during the term of the contract.

•  FDA Clearance:  During April 2010, we received 510(k) market clearance from the Food and Drug Administration for our Unitract 1 mL Insulin Syringe, which is assembled at our Lewisberry, Pennsylvania manufacturing facility.

Our fiscal 2010 compensation policies and practices were instituted in a manner that was mindful of the continued economic downturn and our need to conserve cash while continuing to strive to achieve the strategic goals of our business plan. Base salaries of our named executive officers remained fixed at their fiscal 2009 levels. In hiring a new Chief Financial Officer, his level of compensation was determined after considering internal pay equities relative to the other named executive officers of Unilife, market rates of compensation reflected by our peer group companies identified below, and the candidate’s prior relevant experience and compensation level.

In light of the achievement of the strategic milestones set forth above, as well as achievement of pre-established key performance indicators, or KPIs, for each executive, all of the named executive officers received payout, at target level, of their cash incentive award for the six-month period ending December 31, 2009. Commencing with calendar year 2010, the annual cash incentive award program will change from semi-annual payouts to annual payouts. Consequently, annual cash incentive awards to our named executive officers for the 2010 calendar year performance period will be evaluated and paid in the first quarter of calendar year 2011.

During fiscal 2010, we made long-term incentive equity grants to three of our named executive officers, Messrs. Wieland, E. Shortall, and Iampietro, to fulfill commitments set forth in their employment agreements and to adjust equity award holdings for internal pay equity among the named executive officers. In addition, we approved a new long-term incentive compensation package for our Chief Executive Officer comprised of a performance-based restricted stock award that vests upon achievement of specified strategic milestones and a stock option award that vests upon the market price of our common stock sustaining specified target levels, set approximately 42%, 83% and 268% higher than our $6.64 market price on the date of grant for 20 out of 30 consecutive trading days. More information about the long-term incentive compensation package approved for our Chief Executive Officer is set forth below under “Long-Term Incentive Compensation.”

Compensation Philosophy and Objectives

The compensation committee of our board of directors is responsible for reviewing and approving the compensation payable to the Company’s named executive officers. The compensation committee follows an executive compensation philosophy that includes the following considerations:

•  a “pay-for-performance” orientation that delivers pay based on Company and individual performance;

•  long-term incentives, including stock-based awards, to more closely align the interests of named executive officers with the long-term interests of stockholders; and

•  individual wealth accumulation through long-term incentives, rather than through pensions.

The primary objectives of our executive compensation program are to deliver a competitive package to attract, motivate and retain key executives and to align their compensation with our overall business goals, core values and stockholder interests. We aim to provide total compensation that is appropriate for an organization of our size and stage of development and that will support continued recruitment of top talent and retention of the executive team we have built. We link a substantial portion of compensation to the Company’s achievement of strategic objectives and the individual’s contribution to the attainment of those objectives. In addition, we encourage ownership of our common stock among our executive team through our long-term incentive plan to align executive compensation with the long-term interests of our stockholders.

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We expect that our primary compensation objectives will reinforce consistent attainment of Unilife’s key strategic goals and motivate and retain the executive talent we have hired.

Setting Executive Compensation

In fiscal 2010, our board of directors engaged Strategic Apex Group LLC, or Strategic Apex, an independent third party consulting firm, to assist the compensation committee by providing competitive compensation data and general advice on our compensation programs and policies for named executive officers. Strategic Apex assists the compensation committee in developing performance metrics and long-term incentives for the named executive officers to ensure that key strategic goals are met and that the interests of key decision makers and stockholders are aligned.

During fiscal 2010, Strategic Apex performed a market analysis on the compensation paid by a comparator group of forty-four medical device companies, with median revenues and market capitalization of approximately $100 million and $250 million, respectively. Companies were selected for inclusion in the comparator group based on several factors, including: annual revenues, market capitalization, number of employees, stage of development, and similar business model and products. The peer group companies appear in the table below under “Benchmarking.”

Base salaries, target levels of annual cash incentive awards and initial long-term equity incentive awards for our named executive officers other than Mr. Wieland, our new Chief Financial Officer, were fixed during the negotiation of their respective employment agreements prior to Strategic Apex having been engaged and prior to our redomiciliation to the United States. Based on the market analysis performed by Strategic Apex, Strategic Apex confirmed that the total cash compensation (base salary plus annual cash incentive award) of our Chief Executive Officer and Chief Financial Officer is in the 50th percentile range of the total cash compensation of similarly situated executives within the comparator group. Our compensation committee believes that this level of total cash compensation is appropriate for our named executive officers at this stage of the Company’s development. In future hiring of executives, when establishing the candidate’s pay package, we will consider recommendations from Strategic Apex, internal pay equity amongst the named executive officers at Unilife relative to the roles and responsibilities of the named executive officers, and the level of total cash compensation for the candidate relative to that of the Chief Executive Officer and Chief Financial Officer.

During the process of hiring our new Chief Financial Officer, our Chief Executive Officer negotiated on an arm’s length basis with Mr. Wieland with respect to the terms of his compensation package. Our Chief Executive Officer considered Mr. Wieland’s prior relevant experience and compensation levels, as well as his prospective roles and responsibilities with our Company. Our Chief Executive Officer consulted with Strategic Apex who made recommendations (based on peer group companies as well as compensation surveys) on what would constitute an appropriate compensation package. Our Chief Executive Officer presented the proposed compensation package to the compensation committee of our board of directors which agreed to the terms.

We implement our annual cash incentive program using calendar year performance periods. There is not a formal written plan for this program, but instead minimum cash incentive opportunities are specified in the employment agreement of each named executive officer. Our Chief Executive Officer, in consultation with our compensation committee and Strategic Apex, establishes and communicates to the named executive officers in the first quarter of the performance year key performance indicators, or KPIs, against which each named executive officer’s performance will be measured for that year. As more fully described below under “Annual Cash Incentive Compensation and Bonuses”, the KPIs established for the 2010 calendar year performance period represent key strategic objectives relating to the industrialization of the Unifill ready-to-fill syringe, the commercial production and sale of our Unitract 1 mL syringe, the further development of our management team and additional products, and building stockholder value. Our Chief Executive Officer provides the compensation committee with a detailed review of the performance of the other named executive officers and makes recommendations to the compensation committee as to the level of cash incentive to be paid based on that performance. In accordance with our compensation committee’s charter, our compensation committee evaluates the performance of each named executive officer in light of his KPIs and determines the amount of any annual incentive compensation earned by the named executive officer based on such evaluation.

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Benchmarking

The compensation committee uses independent verifiable data and information as well as the business judgment of the committee members in making decisions concerning executive compensation. An important element of this process is the evaluation of compensation practices among similarly-situated public companies. For this purpose, Strategic Apex assists the compensation committee in developing an appropriate peer group against which various elements of our executive compensation package are benchmarked. This group is referred to as the “Comparison Group.” The Comparison Group consists of forty-four medical device companies, with median revenues and market capitalization of approximately $100 million and $250 million, respectively.

ABAXIS Inc	Conceptus Inc	Insulet Corp	SonoSite Inc
ABIOMED Inc	CryoLife Inc.	IRIS International Inc.	Spectranetics Corp(The)
Accuray Inc	Cutera Inc	Kensey Nash Corp	Stereotaxis Inc
Alphatec Holdings Inc	Cyberonics Inc	Mako Surgical Corp	SurModics Inc
Analogic Corp	Cynosure Inc	Micrus Endovascular Corp	Symmetry Medical Inc
AngioDynamics Inc	Delcath Systems Inc	Natus Medical Inc	Synovis Life Technologies Inc
Aspect Medical Systems Inc	DexCom Inc	NxStage Medical Inc	TomoTherapy Inc
ATS Medical Inc	Electro-Optical Sciences Inc	Orthovita Inc	Volcano Corp
Bovie Medical Corp	Exactech Inc	Palomar Medical Technologies Inc	Wright Medical Group Inc
Cantel Medical Corp.	HeartWare International Inc	Solta Medical Inc	Young Innovations Inc
Cardo Medical Inc	I-Flow Corp	Somanetics Corp	Zoll Medical Corp

Companies were selected for inclusion in the Comparison Group based on several factors, including: annual revenues, market capitalization, number of employees, stage of development, and similar business model and products. The committee intends to review and, if appropriate, modify the Comparison Group on an annual basis to best reflect our business as it evolves. In addition to data from the Comparison Group, we also review the 25th, 50th and 75th percentile compensation data from the Radford Executive Survey for life sciences companies.

Elements of Compensation

Compensation for our named executive officers includes the following elements:

•  base salary;

•  annual cash incentives;

•  long-term incentives in the form of stock options and restricted stock awards; and

•  other benefits and perquisites.

There is no pre-established policy for allocation of compensation between cash and non-cash components or between short-term and long-term components. Instead, the compensation committee determines the mix of compensation for each named executive officer based on its review of competitive data, recommendations from Strategic Apex and the compensation committee’s subjective analysis of that individual’s performance and contribution to the Company’s performance.

We believe that long-term performance is the most important measure of our success, as we manage our operations and business affairs for the long-term benefit of our stockholders. Accordingly, not only is our executive compensation program weighted towards variable, at-risk pay components, but we emphasize incentives that are dependent upon long-term corporate performance and achievement of our strategic plan. These long-term incentives are provided in the form of equity awards (stock options and restricted stock), which comprise a

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significant portion of an executive officer’s total compensation. These incentives are designed to motivate and reward our named executive officers for achieving long-term corporate performance goals and maximizing long-term stockholder value.

Base Salary

It is the compensation committee’s objective to set a competitive rate of annual base salary for each named executive officer. The compensation committee believes competitive base salaries are necessary to attract and retain top quality executives, since it is common practice for public companies to provide their executive officers with a guaranteed annual component of compensation that is not subject to performance risk. Base salary levels are designed to recognize an individual’s ongoing contribution, to be commensurate with an individual’s experience and organization level and to be competitive with market benchmarks. The compensation committee has worked with Strategic Apex to understand such market benchmarks.

Our board of directors negotiated the base salary of our Chief Executive Officer in connection with the employment agreement that we entered into with him in October 2008. Our board of directors set our Chief Executive Officer’s base salary at a level that the board believed was commensurate with our Chief Executive Officer’s skills, knowledge and duties. Based on the Comparison Group, our Chief Executive Officer’s base salary is between the 50th and 75th percentile of base salaries provided to similarly situated executives. The initial base salary of each named executive officer (other than our Chief Executive Officer) was negotiated by our Chief Executive Officer with such executive during the hiring process.

Base salaries for our named executive officers have remained constant at fiscal 2009 levels. Our compensation committee will determine whether and when to adjust the base salaries of the named executive officers in the future. Our compensation committee will consider each named executive officer’s performance and level of responsibility and market data for similar positions.

Annual Cash Incentive Compensation and Bonuses

We implement our annual cash incentive program using calendar year performance periods. There is not a formal written plan for this program, but instead minimum cash incentive opportunities are specified in the employment agreement of each named executive officer. Our Chief Executive Officer, in consultation with our compensation committee and Strategic Apex, establishes and communicates to the named executive officers in the first quarter of the performance year key performance indicators, or KPIs, against which each named executive’s performance will be measured for that year. Our Chief Executive Officer provides the compensation committee with a detailed review of the performance of the other named executive officers and makes recommendations to the compensation committee as to the level of cash incentive to be paid based on that performance. In accordance with our compensation committee’s charter, our compensation committee evaluates the performance of each named executive officer in light of his KPIs and determines the amount of any annual incentive compensation earned by the named executive officer based on such evaluation.

Historically, the annual cash incentives were paid semi-annually based on evaluation of achievements as of the end of each June and December. Consequently, a portion of the annual incentives earned for the last six months of the 2009 calendar year performance period were earned and paid during fiscal 2010 and these amounts are reflected in the Summary Compensation Table at page 92 of this Annual Report. Beginning with the 2010 calendar year performance period, the annual cash incentives will be evaluated solely as of the end of December, and payouts earned will be paid within the first calendar quarter of the following calendar year.

Our compensation committee may also determine to provide discretionary bonuses in addition to the minimum cash incentive opportunity to reward the executive for contributions and achievements other than the executive’s pre-established KPIs. No such discretionary bonuses were awarded to our named executive officers during fiscal 2010.

Our Chief Executive Officer’s annual cash incentive award is discretionary in amount up to $200,000, as provided in his employment agreement. The amount of this discretionary award to be paid is determined by our compensation committee based on satisfaction of key performance indicators, or KPIs. Our compensation

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committee sets the KPIs of our Chief Executive Officer, reviews his performance and determines the amount of any annual incentive compensation earned by him.

Each of Messrs. Calvert, Eugene Shortall, Iampietro and Opitz were entitled to receive a cash incentive award, for calendar years 2009 and 2010 (or, in the case of Mr. Calvert, for the portion of calendar year 2010 during which he was employed with us), at the target level specified in his employment agreement, if his performance satisfies pre-established KPIs identified by our Chief Executive Officer and approved by our compensation committee. More information regarding the target cash incentive opportunity for each of these named executive officers is provided in the footnotes to the Grants of Plan-Based Awards Table on page 94 of this Annual Report. The KPIs are tailored to the named executive officer’s individual area of responsibility and key strategic goals. Our Chief Executive Officer presented the calendar year 2009 and 2010 KPIs to our board of directors, and the board approved them as part of Unilife’s strategic plan. In the case of fiscal 2010, the KPIs were established and communicated during the first quarter of the applicable performance period.

In respect of calendar year 2010, the following is a summary description of the KPIs for each named executive officer:

•  Alan Shortall — strengthening the board of directors; hiring a new Chief Financial Officer and a General Counsel, Corporate Secretary and Chief Compliance Officer; production of the Unitract 1mL syringe in our FDA-registered facility in Lewisberry, PA; continued progress on the industrialization of the Unifill ready-to-fill syringe; and the construction and financing of a new, custom-built manufacturing and headquarters facility near York, PA.

•  R. Richard Wieland II — financing of the new facility; successful year-end audit process; implementation of a Sarbanes-Oxley compliance program and the assessment and reorganization of the finance and accounting function.

•  Daniel Calvert — management of our financial affairs and the development of business plan models and corporate strategy; and transition of the finance and administration function to our new Chief Financial Officer.

•  Eugene Shortall — management of the Unifill ready-to-fill syringe project and completion of key project milestones; and oversight of the construction of the new manufacturing facility to ensure on-time and on-budget completion of the project.

•  Bernhard Opitz — expansion of our operational, engineering and production personnel and oversight of the construction of the new manufacturing facility to ensure that all operational requirements are met.

•  Mark V. Iampietro — management of our quality systems and regulatory affairs, including issuance of new 510(k) and CE mark approvals; and oversight of the construction of the new facility to ensure that all quality and regulatory requirements are met.

Our compensation committee, upon recommendation of our Chief Executive Officer, determines whether each of the named executive officers satisfied their KPIs. The compensation committee determined that each of the named executive officers (except Daniel Calvert) satisfied all of their KPIs for the 2009 calendar year performance period. Consequently, during fiscal 2010, all of the named executive officers (except Daniel Calvert) received payout, at target level, of their cash incentive award for the six-month period ending December 31, 2009.

Long-Term Incentive Compensation

As described above, stock-based incentives are a key component of our executive compensation program. Employee ownership is a core value of our operating culture, and management and the compensation committee believe that stock ownership encourages our executives to create value for our Company over the long term and promotes retention and affiliation with the Company by allowing our executives to share in our long-term success while aligning executive interests with those of our stockholders. Our long-term incentive compensation has been in the form of grants of stock options and stock awards under our Employee Share Option Plan, or ESOP, and our 2009 Stock Incentive Plan, or SIP.

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We view stock options as an important element of performance-based compensation because a stock option provides no realizable value to a recipient until the vesting requirements have been met and will increase in value only as the trading price of our shares increases following the grant of the stock options. With the exception of the stock options granted to our Chief Executive Officer and Chief Financial Officer during fiscal 2010, stock options held by our named executive officers generally have an approximate four-year term and vest over a two year period, contingent upon continued employment with us. Vesting also accelerates if there is a change of control of Unilife (as defined in the applicable stock option agreement) or if the named executive officer’s employment terminates due to total disability or death.

Vesting of the stock option granted to our Chief Executive Officer during fiscal 2010 is contingent upon the attainment of specified market prices for our common stock over a sustained period of time, as more fully described below. Vesting of the stock option granted to our Chief Financial Officer during fiscal 2010 will occur in four equal installments, if and when our market capitalization is sustained for at least 20 consecutive trading days on the Nasdaq Stock Market at the following levels: $500 million, $750 million, $1,250 million and $1,500 million. Our stock options are granted at an exercise price equal to the closing price of our common stock on the date of grant. Accordingly, the actual value a named executive officer will realize is tied to future stock appreciation and is therefore aligned with corporate performance and stockholder returns.

Restricted stock grants incent named executive officers to achieve Unilife’s strategic goals and drive stockholder value by aligning the named executive officers’ compensation with stockholder interests. Vesting periods are intended to enhance retention of the named executive officer and incentivize a long-term focus by the named executive officer on overall Company performance. With the exception of the restricted stock award granted to our Chief Executive Officer during fiscal 2010, described below, the restricted stock awards held by our named executive officers vest over a three year period, 25% in each of the first and second year after the date of grant and 50% in the third year after the date of grant, contingent upon continued employment with us. Vesting also accelerates if there is a change of control of Unilife (as defined in the applicable stock option agreement) or if the named executive officer’s employment terminates due to total disability or death.

Long-term incentive target compensation of each named executive officer is set by our compensation committee based on the named executive officer’s level of responsibility, peer group data for similar positions and the named executive officer’s previous long-term incentive compensation. The total long-term incentive target multiplier of base salary for each of our named executive officers is targeted at the 50th percentile of the Comparison Group that we identified with the assistance of Strategic Apex, aligning with our philosophy of driving wealth accumulation through long-term incentives, and consistent with a business emphasizing high growth and innovation.

In fiscal 2010, we granted stock options and restricted stock to our named executive officers as reflected in the Grants of Plan-Based Awards Table at page 94 of this Annual Report. These stock option grants were made in fulfillment of the terms of each named executive officer’s respective employment agreement and in the case of Mr. Iampietro, to address differences in long-term equity when compared to other named executive officers of Unilife. The amount of each stock option grant for the named executive officers specified in their employment agreements was determined by our Chief Executive Officer in his best judgment during arms’ length negotiation of the employment offer and was approved by our board of directors.

Chief Executive Officer Incentive Compensation Package for Fiscal 2010.  During fiscal 2010, the compensation committee, together with Strategic Apex, performed a comprehensive review of our Chief Executive Officer’s compensation relative to the compensation provided to chief executive officers at the Comparison Group companies. With respect to our Chief Executive Officer’s stock-based compensation, it was noted that the chief executive officers of the Comparison Group companies owned varying amounts of shares in their respective companies. Our board of directors believes that new incentives should primarily take the form of stock-based awards rather than cash because (1) Unilife is in a high growth stage (compared to more mature companies in its Comparison Group) where generating and preserving cash is of utmost importance, and (2) our board of directors believes that any incentives should be geared to total stockholder return (i.e., based on stock price performance) rather than on other metrics that are not as directly tied to stockholder interests.

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In determining the size of the equity award to be made for our Chief Executive Officer, the compensation committee considered his total compensation rather than simply looking at each separate element of pay. In comparison with its Comparison Group in 2009, the Company has performed at a level better than those of its competitors under the Chief Executive Officer’s leadership. One imperative of our board of directors is that the Chief Executive Officer’s compensation package should serve as both a motivation and a reward for performance rather than as a guaranteed amount. Prior to his most recent award, our Chief Executive Officer had already earned his previous incentive awards, with the final installment of his outstanding stock option due to vest on May 28, 2011 based solely on his continued employment through that date since the market price performance hurdle for that installment had already been met. Consequently, he had no incentive compensation tied to future performance. It was important to establish an incentive program in light of the new business targets and challenges facing the Company. Because the Company is still in a high-growth stage as well as based on its previous performance, it was decided to set a target of total Chief Executive Officer compensation between the 75th and 85th percentile among peer group company chief executive officers.

Unilife’s equity compensation program is intended to be a long-term program rather than an annual bonus arrangement, so it was decided by our compensation committee and the board of directors to make a one-time grant of equity to our Chief Executive Officer to be earned over a multi-year performance period rather than making smaller annual grants over that performance period. At a five-year performance period, this decision set total long-term equity incentives for our Chief Executive Officer at a target of approximately $9.5 million. Recent volatility in the stock price suggested that the grant of a single share of Unilife common stock had a value similar to a grant of two options having an exercise price equal to the closing price on the date of grant, based on recent market prices. The new long-term incentive compensation package for our Chief Executive Officer is comprised of a performance-based restricted stock award that vests upon achievement of specified strategic milestones and a market-based stock option award that vests upon the market price of our common stock sustaining specified target levels, as described below. The new long-term incentive compensation package for our Chief Executive Officer required approval by Unilife’s stockholders under applicable listing rules of the Australian Securities Exchange. This approval was obtained at a stockholders meeting held on January 8, 2010.

On February 3, 2010, we granted to our Chief Executive Officer an award of 1,166,000 restricted shares of common stock. One-fifth of these shares will become vested upon each achievement of one of the following five performance milestones provided that the achievement occurs on or before the fifth anniversary of the date of grant and either his service with the Company is continuous from the date of grant through the applicable date upon which such achievement occurs or his service with the Company was terminated by the Company without cause (as defined in his employment agreement) prior to the achievement of the performance milestone:

•  Signing supply agreements with sanofi-aventis for 100 million or more Unifill Ready to Fill Syringes;

•  First new agreement for Unifill Ready to Fill Syringe with pharmaceutical company other than sanofi-aventis or its affiliates;

•  Agreement with any pharmaceutical company, including sanofi-aventis, for a new product (other than the Unifill Ready to Fill Syringe);

•  Expand business capability by installing the first Unifill Ready to Fill Syringe production line in a clean room in Unilife’s new Pennsylvania facility, including the successful operation qualification (OQ) of the line;

•  First shipment of production quality (PQ), sterile Unifill Ready to Fill Syringes to sanofi-aventis from commercial production line.

All of the restricted shares, to the extent not earlier forfeited, will become vested upon the occurrence of a change in control of Unilife (as defined under the applicable award agreement). Vesting also accelerates if our Chief Executive Officer dies or his employment terminates due to total disability. Any restricted shares that have not become vested by February 3, 2015, will be forfeited on that date.

On February 3, 2010, we granted to our Chief Executive Officer an award of 834,000 stock options for the purchase of our common stock. These stock options will vest and become exercisable as reflected in the table below

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upon achievement of specified market price performance milestones, provided that the achievement occurs on or before the fifth anniversary of the date of grant and either his service with the Company is continuous from the date of grant through the applicable date upon which such achievement occurs or his service with the Company was terminated by the Company without Cause (as defined in his employment agreement) prior to the achievement of the performance milestone:

	Number of
	Options		Percent-
	Eligible to		age of
Performance Milestones	Vest		Options
Fair Market Value of one Share of Unilife Corporation common stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the stock may be trading at the time, is $9.45 or more for a minimum of 20 out of any 30 consecutive trading days		250,000 Options		30	%
Fair Market Value of one Share of Unilife Corporation common stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the stock may be trading at the time, is $12.15 or more for a minimum of 20 out of any 30 consecutive trading days		250,000 Options		30	%
Fair Market Value of one Share of Unilife Corporation common stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the stock may be trading at the time, is $17.82 or more for a minimum of 20 out of any 30 consecutive trading days		334,000 Options		40	%
Total		834,000 Options		100	%

If we achieve the performance milestones set forth above, they would yield an approximate annualized five year rate of return of 7.3% (if the stock price reaches $9.45), 12.8% (if the stock price reaches $12.15), and 21.8% (if the stock price reaches $17.82). If these performance milestones are reached before five years from the grant date, the effective rates of return may be significantly higher. All of these stock options, to the extent not earlier forfeited, will become vested upon the occurrence of a change in control of Unilife (as defined under the applicable award agreement). Vesting also accelerates if our Chief Executive Officer dies or his employment terminates due to total disability.

Savings Plans

We do not provide for wealth accumulation for retirement through defined benefit pension plans; however, our U.S. subsidiary, Unilife Medical Solutions, Inc., has a 401(k) plan, which permits named executive officers and other employees to accumulate wealth on a tax-deferred basis. We do not anticipate providing for wealth accumulation for retirement through defined benefit pensions or supplemental executive retirement plans. In addition, while our U.S. subsidiary does not currently make matching or fixed contributions to the balances of employees, including the named executive officers, under the 401(k) plan, we do expect to adopt a company match in future years.

Other Benefits and Perquisites

The named executive officers are eligible to participate in employee benefit programs generally offered to our other employees. In addition, we provide certain other perquisites to the named executive officers that are not generally available to other employees. Our compensation committee reviews these benefits and perquisites. We also provide temporary housing and other relocation assistance when a named executive officer is hired or relocated for business reasons. We anticipate continuing to offer newly hired or relocated employees relocation benefits which are competitive and appropriate for their level of responsibility. For more detailed information regarding benefits and perquisites provided to the named executive officers, see — “Compensation of Named Executive Officers.”

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Employment Agreements

Each of our named executive officers is employed with us under the terms of an employment agreement for a term of years. With the exceptions of the employment agreements with our Chief Executive Officer, our Chief Financial Officer and our former Chief Financial Officer, who resigned on June 10, 2010, the employment term under the applicable agreement is three years with annual one-year renewal periods after the initial term. Our Chief Executive Officer’s employment term under his employment agreement expires on July 1, 2011. The employment agreements establish the named executive officer’s initial base salary, which is subject to review and adjustment annually, and his annual cash incentive award opportunity. All cash incentive award payments are discretionary and subject to achievement of key performance indicators. The employment agreements with Messrs. Wieland, Opitz and Iampietro provide for reimbursement of relocation and temporary living expenses. The employment agreements for each of our named executive officers also contain restrictive covenants under which the executive must refrain from disclosing our confidential information, and must refrain from becoming involved in any business which is a competitor of the Company or attempting to entice away any employee, customer or supplier of the Company for a specified period of time after his employment with us terminates. The employment agreements provide for certain payments and benefits upon the named executive officer’s termination of employment with us under certain circumstances. Further information regarding those payments and benefits and the circumstances under which they are payable is described under — “Potential Payments Upon Termination or Changes in Control”.

Severance

We must comply with Australian legal requirements regarding obtaining stockholder approval of certain severance payments. Severance provisions are set forth in the employment agreements with our named executive officers. Further information regarding the severance benefits of our named executive officers is described under — “Potential Payments Upon Termination or Changes in Control”.

Our compensation committee considers and develops policies, guidelines or programs with respect to severance benefits. We will continue the severance obligations under existing employment agreements. We believe that severance benefits allow us to attract and retain talented executives, and to entice other potential employees to accept positions with us and to relocate to our central Pennsylvania headquarters. In establishing these arrangements, we consider that we do not provide defined benefit pension or supplemental executive retirement plan benefits. The employment agreements currently in place with the named executive officers have a “double-trigger” feature, mandating cash severance payments on a change in control of the Company only if employment terminates in connection with or following the change in control.

Policies, Guidelines and Practices Related to Executive Compensation

The Compensation Committee

Our compensation committee makes executive compensation determinations for the named executive officers, and our senior management provides recommendations and support to our compensation committee. In addition, the board of directors retains Strategic Apex to provide expert executive compensation advice and guidance to the compensation committee. The compensation committee operates in accordance with a written charter and is composed of at least three independent directors who report their findings and recommendations to our board of directors. Our compensation committee’s responsibilities include the following actions:

•  develop and implement an executive compensation policy to support overall business strategies and objectives, attract and retain key executives, link compensation with business objectives and organizational performance, and provide competitive compensation;

•  approve compensation for the Chief Executive Officer, including relevant performance goals and objectives, review and approve compensation for other named executive officers, and oversee their evaluations;

•  make recommendations to our board of directors with respect to the adoption of equity-based compensation plans and incentive compensation plans;

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•  review the outside directors’ compensation program for competitiveness and plan design, and recommend changes to our board of directors, as appropriate;

•  oversee the management succession process for our Chief Executive Officer and selected senior executives;

•  oversee general compensation plans and initiatives; and

•  consult with senior management on major policies affecting employee relations and benefits.

Guidelines for Share Ownership and Holding Periods for Equity Awards

Our Chief Executive Officer is also currently our largest stockholder. Even though we have not had formal stock ownership requirements for our named executive officers, our Chief Executive Officer’s ownership position assists in ensuring that management decisions are aligned with stockholder interests. On November 28, 2008, pursuant to the terms of his employment agreement, our Chief Executive Officer was granted a stockholder-approved stock award for 1,666,667 fully vested shares. His employment agreement provides that he may not dispose of any of the shares received under that award until at least 12 months after the award was granted, and that he may dispose of no more than 50 percent of those shares until at least 24 months after the award was granted. If, before these holding periods expire, our Chief Executive Officer retires, dies or becomes totally and permanently disabled or there is a change of control of Unilife, the holding periods will terminate. Similarly, for the stock option and restricted stock awards that our Chief Executive Officer received in fiscal 2010, he may not dispose of the shares received under those awards before the first anniversary on which the awards became vested with respect to such shares.

Our compensation committee anticipates adopting stock ownership guidelines to require our named executive officers and directors to accumulate and hold a minimum number of shares of our common stock in order to ensure that their interests are aligned with stockholder interests. Decisions about the number of shares and time to accumulate will be made after consideration of best practices in the United States and the advice of our compensation consultant.

Potential Impact on Compensation from Executive Misconduct

Under our incentive plans, our board of directors has the authority to revoke equity grants of employees who commit misconduct. These provisions are designed to deter and prevent detrimental behavior and permit us to prevent such employees from exercising stock options or retaining restricted stock, which would lapse if that employee has engaged in certain misconduct.

Our compensation committee will evaluate various “claw-back” alternatives and consider the advisability of adopting such policies as will protect our investors from financial misconduct and satisfy the requirements of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act.

Tax Matters

Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, places a limit of $1,000,000 on the amount of compensation that certain publicly held corporations may deduct for U.S. federal tax purposes in any one year with respect to certain named executive officers.

To the extent that Section 162(m) of the Code applies to Unilife’s compensation program for its named executive officers, our compensation committee follows a general practice of considering the adverse effect of Section 162(m) of the Code on the deductibility of compensation when designing annual and long-term compensation programs and approving payouts under these programs. While the tax treatment of compensation is important, the primary factor influencing program design is the support of business objectives. Consequently, our compensation committee reserves the right to design and administer compensation programs in a manner that does not satisfy the requirements of Section 162(m) of the Code and to approve the payment of nondeductible compensation, if the compensation committee believes doing so is in Unilife’s best interest.

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Accounting Matters

We record compensation expenses from our stock-based incentive compensation awards in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model, with the exception of market-based grants, which are valued based on Barrier and Monte Carlo pricing models. The fair value of restricted stock is measured on the date of grant using the closing price of the Company’s common stock on that date.

Compensation Committee Interlocks and Insider Participation

In November 2009, Unilife established a compensation committee, which is currently composed of three independent directors; namely, Slavko James Joseph Bosnjak, John Lund and William Galle. None of the members of the compensation committee has ever been an executive officer or employee of Unilife or any of its subsidiaries, or has any relationship with Unilife or its executives, other than their directorship and equity interests in Unilife as disclosed in “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

Compensation Committee Report

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis appearing above with management. Based on such review and discussions, the compensation committee recommended to the board that the Compensation Discussion and Analysis be included in this annual report on Form 10-K and the proxy statement on Schedule 14A for the Company’s 2010 annual meeting of stockholders.

THE COMPENSATION COMMITTEE

Slavko James Joseph Bosnjak

John Lund

William Galle

Compensation of Named Executive Officers

Summary Compensation Table

The following table provides information regarding total compensation awarded to, earned by, or paid to our named executive officers:

													Non-Equity
													Incentive
							Stock			Option			Plan		All Other
			Salary		Bonus		Awards			Awards			Compensation		Compensation			Total
Name and Position	Year		($)		($)		($)			($)			($)(3)		($)			($)
Alan Shortall(4)		2010		428,019		—		7,742,240			2,652,120			200,000		64,805	(5)	$	11,087,184
Chief Executive Officer		2009		321,991		144,540		1,541,025	(1)		1,408,400	(2)		166,908		142,035			3,724,899
R. Richard Wieland II(6)		2010		4,712		—		422,400			570,000			8,167		3,858			1,009,137
Chief Financial Officer
Daniel Calvert(7)		2010		160,612		—		—			—			24,000		80,530	(8)		265,142
Former Chief Financial Officer		2009		86,154		—		—			277,656	(2)		37,333		7,722			408,865
Eugene Shortall(9)		2010		223,437		—		1,214,000			—			112,269		168,435	(10)		1,718,141
Senior Vice President of Business Development		2009		185,760		—		—			—			41,941		8,225			235,926
Bernhard Opitz(11)		2010		210,000		—		—			—			63,000		185,785	(12)		458,785
Senior Vice President of Operations		2009		121,154		—		—			277,656	(2)		36,750		22,374			457,934
Mark V. Iampietro(13)		2010		185,000		—		303,500			—			46,250		30,459	(14)		565,209
Vice President of Quality and Regulatory Affairs

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(1)	This restricted stock grant was issued with a fair value determined in Australian dollars. Amounts were converted using the exchange rate on the date of grant. The amount referenced is equal to the grant date fair value recognized under FASB ASC Topic 718. See Note 4 of our consolidated financial statements contained elsewhere in this report for information regarding assumptions used in determining grant date fair value.
(2)	These option awards were issued with exercise prices in Australian dollars. Amounts were converted using the exchange rate at June 30, 2009 of A$1.00 = US$0.8048. The amount referenced is equal to the grant date fair value of the stock options using the Black-Scholes and Barrier option-pricing models. See Note 4 of our consolidated financial statements contained elsewhere in this report for information regarding assumptions used in determining grant date fair value.
(3)	We provide more detailed information about non-equity incentive plan compensation in the footnotes to the Grants of Plan-Based Awards Table below. The amounts in this column reflect the annual cash incentive awards earned for services performed during fiscal year 2010.
(4)	Prior to his relocation from Australia to the United States in February 2009 and until April 2009, Mr. A. Shortall had been receiving his cash compensation in Australian dollars, which, for purposes of the 2009 amounts in this Summary Compensation Table, were converted into U.S. dollars using the average exchange rate during the applicable period.
(5)	Includes payments of $28,189 related to the purchase and maintenance of an automobile. Also includes $33,350 related to travel expenses of family members accompanying Mr. A. Shortall on business trips and $3,266 of other expenses.
(6)	Mr. Wieland has been serving as our Chief Financial Officer since June 8, 2010. The amounts disclosed in the table above reflect amounts earned from June 8, 2010 to June 30, 2010.
(7)	Mr. Calvert served as our Chief Financial Officer from December 2, 2008 to June 8, 2010. The amounts disclosed in the table above reflect amounts earned from December 2, 2008 to June 8, 2010.
(8)	Includes $80,000 related to severance payments.
(9)	Mr. E. Shortall had been receiving his cash compensation primarily in Australian dollars, which, for purposes of the 2009 amounts in this summary compensation table, were converted into U.S. dollars using the average exchange rate during the applicable period.
(10)	Includes $157,359 in connection with relocation and $11,076 in connection with the purchase of an automobile.
(11)	Mr. Opitz has served as our Senior Vice President of Operations since December 2008. The 2009 amounts disclosed in the table above reflect amounts earned from December 2008 to June 2009.
(12)	Represents amounts related to relocation; $40,530 of the amount indicated is a reimbursement for taxes incurred by the named executive officer on the relocation payments.
(13)	Mr. Iampietro has served as our Vice President of Quality and Regulatory Affairs since October 2008. Only 2010 data is provided because Mr. Iampietro was not one of our named executive officers for fiscal 2009.
(14)	Represents amounts related to relocation.

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Grants of Plan-Based Awards

The following table provides information regarding all plan-based awards made to our named executive officers during the fiscal year ended June 30, 2010:

Grants of Plan-Based Awards in Fiscal Year 2010*

					Estimated
					Future Payouts					All Option				Grant Date
					Under			All Other		Awards:		Exercise or		Fair Value
					Non-Equity			Stock Awards:		Number of		Base Price of		of Stock and
					Incentive Plan			Number of		Securities		Option		Option
	Award				Awards Target			Shares of		Underlying		Awards		Awards
Name	Type(1)		Grant Date		($)			Stock or Units		Options		($)		($)
Alan Shortall		RS		2/3/10		—			1,166,000		—		—		7,742,240
		OP		2/3/10		—			—		834,000		6.64		2,652,120
		AIC		—		200,000	(2)		—		—		—		—
R. Richard Wieland II		RS		6/8/10		—			80,000		—		—		422,400
		OP		6/8/10							240,000		5.28		570,000
		AIC		—		57,167	(3)		—				—		—
Daniel Calvert		AIC		—		64,000	(4)		—		—		—		—
Eugene Shortall		RS		3/26/10					200,000		—		—		1,214,000
		AIC		—		120,000	(5)		—		—		—		—
Bernhard Opitz		AIC		—		63,000	(6)		—		—		—		—
Mark V. Iampietro		RS		3/26/10		—			50,000		—		—		303,500
		AIC		—		46,250	(7)		—		—		—		—

*	Includes only those columns relating to grants awarded to the named executive officers in fiscal 2010. All other columns have been omitted.
(1)	Award Type: OP = stock option RS = restricted stock award AIC = annual incentive cash award
(2)	Pursuant to Mr. A. Shortall’s employment agreement, he is eligible to receive, subject to satisfaction of specified KPIs, an incentive compensation payment of up to $200,000 per calendar year for his services. The incentive compensation payment for services performed in calendar year 2010 is payable during the first quarter of calendar year 2011.
(3)	Mr. Wieland has served as our Chief Financial Officer since June 8, 2010. Pursuant to Mr. Wieland’s employment agreement, he is eligible to receive, subject to satisfaction of specified KPIs, an incentive compensation payment of up to 40% of his base salary per calendar year for his services. The incentive compensation payment for services performed in calendar year 2010 is payable during the first quarter of calendar year 2011.
(4)	Mr. Calvert served as our Chief Financial Officer through June 8, 2010. Pursuant to Mr. Calvert’s employment agreement, he was eligible to receive, subject to satisfaction of specified KPIs, an incentive compensation payment of up to 40% of his base salary per calendar year for his services. Mr. Calvert will not receive an incentive compensation payment for calendar year 2010 as he is no longer employed by Unilife.
(5)	Pursuant to Mr. E. Shortall’s employment agreement, he is eligible to receive, subject to satisfaction of specified KPIs, an incentive compensation payment of up to 50% of his base salary per calendar year for his services. The incentive compensation payment for services performed in calendar year 2010 is payable during the first quarter of calendar year 2011.
(6)	Pursuant to Mr. Opitz’s employment agreement, he is eligible to receive, subject to satisfaction of specified KPIs, an incentive compensation payment of up to 30% of his base salary per calendar year for his services. The incentive compensation payment for services performed in calendar year 2010 is payable during the first quarter of calendar year 2011.

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(7) Pursuant to Mr. Iampietro’s employment agreement, he is eligible to receive, subject to satisfaction of specified KPIs, an incentive compensation payment of up to 25% of his base salary per calendar year for his services. The incentive compensation payment for services performed in calendar year 2010 is payable during the first quarter of calendar year 2011.

Outstanding Equity Awards Table*

The following table provides information regarding all outstanding equity awards for our named executive officers as of June 30, 2010:

	Option Awards										Stock Awards
	Number of		Number of											Market Value
	Securities		Securities								Number of			of Shares or
	Underlying		Underlying								Shares or			Units of
	Unexercised		Unexercised			Option					Units of Stock			Stock That
	Options		Options			Exercise			Option		That Have			Have Not
Name	(# Exercisable)		(# Unexercisable)			Price ($)			Expiration Date		Not Vested			Vested(1)
Alan Shortall		—		834,000	(2)		6.64			02/03/15		—			—
		833,333		416,667	(3)		1.70	(4)		09/30/13		—			—
				—			—					1,166,000	(5)		6,786,120
R. Richard Wieland II		—		240,000	(6)		5.28			06/08/15		—			—
				—			—			—		80,000	(7)		465,600
Daniel Calvert		156,367		83,333			1.70	(4)		06/30/12		—			—
Eugene Shortall		—		—			—			—		—			—
		—		—			—			—		200,000	(8)		1,164,000
Bernhard Opitz		166,667		83,333	(9)		1.70	(4)		06/30/12		—			—
Mark V. Iampietro		66,667		33,333	(10)		1.70	(4)		06/30/12		—			—
		—		—			—			—		50,000	(11)		291,000

*	Includes only those columns which are applicable.
(1)	The market value of all stock awards is based upon the closing price of our common stock of $5.82 at June 30, 2010.
(2)	The options will vest as follows: 250,000 options will vest upon our share price reaching $9.45 or more for a minimum of 20 out of any 30 consecutive trading days, 250,000 options will vest upon our share price reaching $12.15 or more for a minimum of 20 out of any 30 consecutive trading days and 334,000 options will vest upon our share price reaching $17.82 or more for a minimum of 20 out of any 30 consecutive trading days. The options will also vest upon a change in control of Unilife or upon Mr. A. Shortall’s death or termination of employment due to total disability.
(3)	The options will vest on May 28, 2011.
(4)	Option awards were issued with an exercise price in Australian dollars. Amounts were converted using the exchange rate at June 30, 2010 of A$1.00 = US$0.8567.
(5)	Mr. A. Shortall’s shares of restricted stock are subject to vesting based on the achievement of the following performance milestones: 233,200 restricted shares will vest upon the signing of supply agreements with sanofi-aventis for 100 million or more Unifill syringes. 233,200 restricted shares will vest upon the signing of the first new agreement for the Unifill syringe with a pharmaceutical company other than sanofi-aventis or its affiliates. 233,200 restricted shares will vest upon the signing of an agreement with any pharmaceutical company, including sanofi-aventis, for a new product (other than the Unifill syringe). 233,200 restricted shares will vest upon the installation of the first Unifill syringe production line into a clean room in our new facility, including the successful operational qualification of the line. 233,200 restricted shares will vest upon the first shipment of production quality sterile Unifill syringes to sanofi-aventis from a commercial production line. The shares of restricted stock will also vest upon a change in control of Unilife or upon Mr. A. Shortall’s death or termination of employment due to total disability.

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(6)	The options will vest as follows provided that Mr. Wieland remains employed with us through the relevant vesting date: 60,000 options will vest upon our market capitalization reaching $500 million or more for 20 consecutive trading days; 60,000 options will vest upon our market capitalization reaching $750 million or more for 20 consecutive trading days; 60,000 options will vest upon our market capitalization reaching $1,250 million or more for 20 consecutive trading days; and 60,000 options will vest upon our market capitalization reaching $1,500 million or more for 20 consecutive trading days. The options will also vest upon a change in control of Unilife, upon Mr. Wieland’s resignation within 180 days after Alan Shortall ceases to be our Chief Executive Officer for any reason, or upon Mr. Wieland’s death or termination of employment due to total disability.
(7)	The shares of restricted stock will vest as follows provided that Mr. Wieland remains employed with us through the relevant vesting date: 20,000 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the first anniversary of the date of grant, 20,000 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the second anniversary of the date of grant, and 40,000 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the third anniversary of the date of grant. The shares of restricted stock will also vest upon a change in control of Unilife, upon Mr. Wieland’s resignation within 180 days after Alan Shortall ceases to be our Chief Executive Officer for any reason, or upon Mr. Wieland’s death or termination of employment due to total disability.
(8)	The shares of restricted stock will vest as follows provided that Mr. E. Shortall remains employed with us through the relevant vesting date: 50,000 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the first anniversary of the date of grant, 50,000 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the second anniversary of the date of grant, and 100,000 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the third anniversary of the date of grant. The shares of restricted stock will also vest upon a change in control of Unilife, or upon Mr. E. Shortall’s death or termination of employment due to total disability.
(9)	The options will vest on December 2, 2010 provided that Mr. Opitz remains employed with us through that date. The options will also vest upon a change in control of Unilife or upon Mr. Opitz’ death or termination of employment due to total disability.
(10)	The options will vest on October 17, 2010 provided that Mr. Iampietro remains employed with us through that date. The options will also vest upon a change in control of Unilife or upon Mr. Iampietro’s death or termination of employment due to total disability.
(11)	The shares of restricted stock will vest as follows provided that Mr. Iampietro remains employed with us through the relevant vesting date: 12,500 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the first anniversary of the date of grant, 12,500 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the second anniversary of the date of grant, and 25,000 shares will vest on the third trading day after the Company’s release of earnings for the fiscal quarter which includes the third anniversary of the date of grant. The shares of restricted stock will also vest upon a change in control of Unilife, or upon Mr. Iampietro’s death or termination of employment due to total disability.

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Option Exercises and Stock Vested

The following table contains information relating to the exercise of stock options and vesting of restricted stock during fiscal year 2010.

Option Exercises and Stock Vested in Fiscal Year 2010

	Option Awards
			Value
	Number of		Realized on
	Shares Acquired		Exercise(1)
Name	on Exercise		($)
Alan Shortall		—		—
R. Richard Wieland II		—		—
Daniel Calvert		10,300		8,688
Eugene Shortall		—		—
Bernhard Opitz		—		—
Mark. V. Iampietro		—		—

(1)	Represents the difference between the exercise price of the stock options and the fair market value of Unilife common stock at exercise. Amount was converted using the exchange rate on the date of exercise.
(2)	No stock awards vested during the fiscal year ended June 30, 2010 for any of our named executive officers.

Potential Payments Upon Termination or Changes in Control

We have entered into employment agreements with our named executive officers which provide for certain payments and benefits upon the named executive officer’s termination of employment with us under certain circumstances. In addition, stock-based awards granted to our named executive officers contain provisions for the acceleration of vesting under certain circumstances.

The table below reflects the compensation and benefits, if any, due to each of the named executive officers upon a voluntary termination; a termination for cause; an involuntary termination other than for cause or resignation for good reason, both before and after a change of control; the occurrence of a change of control; or a termination due to death, disability or retirement. The amounts shown assume that each termination of employment or the change of control, as applicable, was effective as of June 30, 2010, and the fair market value of a share of our common stock as of June 30, 2010 was $5.82, which was the closing price of our shares on that date. The amounts shown in the table are estimates of the amounts which would be payable upon termination of employment or change of control as applicable. The actual amounts to be paid can only be determined at the time of the actual termination of employment or change of control, as applicable.

The value of the accelerated vesting of options was calculated by multiplying the number of unvested shares subject to each option by the excess, if any, between $5.82, the closing price of a share of our common stock on June 30, 2010, over the per share exercise price of the option. The value of the accelerated vesting of restricted stock was calculated by multiplying the aggregate number of unvested shares of restricted stock by $5.82, the closing

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price of a share of our common stock on June 30, 2010. More details concerning these values are set forth in the footnotes below.

		Voluntary			Termination						Termination
		Resignation			Without Cause						Without Cause
		or			Prior to						After
		Termination			Change in			Change in			Change in			Death or
Name	Benefit	for Cause			Control(1)			Control(2)			Control			Disability(2)
Alan Shortall	Cash severance		—		$	315,000	(3)		—		$	315,000	(3)		—
	Options		—		$	1,716,668	(4)	$	1,716,668	(4)	$	(4	)	$	1,716,668	(4)
	Restricted Stock		—		$	6,786,120	(5)	$	6,786,120	(5)	$	(5	)	$	6,786,120	(5)
	Health Benefits		—			—			—			—			—
	Relocation	$	100,000	(6)	$	100,000	(6)	$	100,000	(6)	$	100,000	(6)	$	100,000	(6)
	Total value	$	100,000		$	8,917,788		$	8,602,788		$	415,000		$	8,602,788
Daniel Calvert(7)	Cash severance		—			—			—			—			—
	Options		—			—			—			—			—
	Restricted Stock		—			—			—			—			—
	Health Benefits		—			—			—			—			—
	Relocation		—			—			—			—			—
	Total value		—			—			—			—			—
Eugene Shortall	Cash severance		—		$	120,000	(8)		—		$	401,941	(11)		—
	Options		—			—			—			—			—
	Restricted Stock		—			—			1,164,000	(12)		—			1,164,000	(12)
	Health Benefits		—		$	3,115	(9)		—		$	9,345	(13)		—
	Relocation	$	110,000	(10)	$	110,000	(10)	$	110,000	(10)	$	110,000	(10)	$	110,000	(10)
	Total value	$	110,000		$	233,115		$	1,274,000		$	521,286		$	1,274,000
Bernhard Opitz	Cash severance		—		$	157,500	(14)		—		$	378,000	(16)		—
	Options		—			—		$	343,332	(17)				$	343,332	(17)
	Restricted Stock		—			—			—			—			—
	Health Benefits		—		$	4,672	(15)		—		$	9,345	(18)		—
	Relocation		—			—			—			—			—
	Total value		—		$	162,172		$	343,332		$	387,345		$	343,332
Mark V. Iampietro	Cash severance		—		$	92,500	(19)		—		$	333,000	(23)		—
	Options		—			—		$	137,332	(21)				$	137,332	(21)
	Restricted Stock		—			—		$	291,000	(22)				$	291,000	(22)
	Health Benefits		—		$	3,115	(20)		—		$	9,345	(24)		—
	Relocation		—			—			—			—			—
	Total value		—		$	95,615		$	428,332		$	342,345		$	428,332
R. Richard Wieland II(25)	Cash severance		—		$	245,000	(26)		—		$	367,500	(30)		—
	Options		—		$	129,600	(27)	$	129,600	(27)				$	129,600	(27)
	Restricted Stock		—		$	465,600	(28)	$	465,600	(28)				$	465,600	(28)
	Health Benefits		—		$	3,115	(29)		—		$	9,345	(29)		—
	Relocation		—			—			—			—			—
	Total value		—		$	843,315		$	595,200		$	376,845		$	595,200

(1)	Except with respect to Mr. Alan Shortall, Termination Without Cause includes termination due to our decision not to renew a named executive officer’s employment agreement if the named executive officer was willing and able to continue performing services under the terms of the employment agreement.
(2)	Upon a change of control or in the case of termination of employment due to death or total disability, all outstanding options and shares of restricted stock vest.
(3)	The cash severance payment to Mr. A. Shortall is calculated based on an amount equal to nine months of his total salary compensation for the fiscal year in which employment is terminated.

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(4)	This amount represents the accelerated vesting of 416,667 options based on the excess, if any,,between $5.82, the closing price of our shares on June 30, 2010, and the option exercise price of $1.70. The option exercise price was converted from Australian dollars to US dollars using the exchange rate at June 30, 2010 of A$1.00 = US$0.8567.
(5)	This amount represents the value of the accelerated vesting of 1,166,000 shares of restricted stock based on a value per share as of June 30, 2010 of $5.82, the closing price of our shares on June 30, 2010.
(6)	Upon the end of Mr. A. Shortall’s employment with us in the United States we have the obligation to pay for the relocation of Mr. A. Shortall and his family from the United States to Australia, including moving his personal and household effects. The amount above represents the estimated expenses associated with such relocation as of June 30, 2010.
(7)	Mr. Calvert resigned from his position as Chief Financial Officer effective June 8, 2010. In return for a general release of claims, we agreed to provide Mr. Calvert with receive severance benefits consisting of $80,000, which is an amount equal to six months of his annual salary, paid in installments, and payments of $6,623 for the cost of his COBRA health care continuation coverage for six months.
(8)	This amount represents an amount equal to six months of Mr. E. Shortall’s total salary compensation for the fiscal year in which employment is terminated.
(9)	This amount represents the cost of six months of Mr. E. Shortall’s COBRA health care continuation coverage.
(10)	Upon the end of Mr. E. Shortall’s employment with us in the United States we have the obligation to pay for the relocation of Mr. E. Shortall and his family from the United States to Kuwait, including moving his personal and household effects. The amount above represents the estimated expenses associated with such relocation as of June 30, 2010.
(11)	This amount represents an amount equal to eighteen months of Mr. E. Shortall’s total salary compensation for the fiscal year in which employment is terminated ($360,000) plus the amount of the bonus paid to Mr. E. Shortall in our fiscal year ended June 30, 2009 ($41,941).
(12)	This amount represents the value of the accelerated vesting of 200,000 shares of restricted stock based on a value per share as of June 30, 2010 of $5.82, the closing price of our shares on June 30, 2010.
(13)	This amount represents the cost of 18 months of Mr. E. Shortall’s COBRA health care continuation coverage.
(14)	This amount represents an amount equal to nine months of Mr. Opitz’s total salary compensation for the fiscal year in which employment is terminated.
(15)	This amount represents the cost of nine months of Mr. Opitz’s COBRA health care continuation coverage.
(16)	This amount represents an amount equal to eighteen months of Mr. Opitz’s total salary compensation for the fiscal year in which employment is terminated ($315,000) plus the amount of the bonus paid to Mr. Opitz in our fiscal year ended June 30, 2009 ($63,000).
(17)	This amount represents the value of the accelerated vesting of 83,333 options based on the excess, if any, between $5.82, the closing price of our shares on June 30, 2010, and the option exercise price of $1.70. The option exercise price was converted from Australian dollars to US dollars using the exchange rate at June 30, 2010 of A$1.00 = US$0.8567.
(18)	This amount represents the cost of 18 months of Mr. Opitz’s COBRA health care continuation coverage.
(19)	This amount represents an amount equal to six months of Mr. Iampietro’s total salary compensation for the fiscal year in which employment is terminated.
(20)	This amount represents the cost of six months of Mr. Iampietro’s COBRA health care continuation coverage.
(21)	This amount represents the accelerated vesting of 33,333 options based on the excess, if any, between $5.82, the closing price of our shares on June 30, 2010, and the option exercise price of $1.70. The option exercise price was converted from Australian dollars to US dollars using the exchange rate at June 30, 2010 of A$1.00 = US$0.8567.
(22)	This amount represents the value of the accelerated vesting of 50,000 shares of restricted stock based on a value per share as of June 30, 2010 of $5.82, the closing price of our shares on June 30, 2010.

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(23)	This amount represents an amount equal to 18 months of Mr. Iampietro’s total salary compensation for the financial year in which employment is terminated ($277,500) plus the amount of the bonus paid to Mr. Iampietro in our fiscal year ended June 30, 2009 ($55,500).
(24)	This amount represents the cost of 18 months of Mr. Iampietro’s COBRA health care continuation coverage.
(25)	If Mr. Wieland resigns his employment with us within 180 days after Alan Shortall ceases to be our chief executive officer for any reason, Mr. Wieland is entitled to receive the payments set forth under “Termination Without Cause After a Change in Control.”
(26)	This amount represents an amount equal to 12 months of Mr. Wieland’s total salary compensation for the fiscal year in which employment is terminated.
(27)	This amount represents the accelerated vesting of 240,000 options based on the excess, if any between $5.82, the closing price of our shares on June 30, 2010, and the option exercise price of $5.28.
(28)	This amount represents the value of the accelerated vesting of 80,000 shares of restricted stock based on a value per share as of June 30, 2010 of $5.82, the closing price of our shares on June 30, 2010.
(29)	This amount represents the cost of 18 months of Mr. Wieland’s COBRA health care continuation coverage.
(30)	This amount represents an amount equal to eighteen months of Mr. Wieland’s total salary compensation for the financial year in which employment is terminated ($367,500) plus the amount of the bonus paid to Mr. Wieland’s in our fiscal year ended June 30, 2009 ($0).

DIRECTOR COMPENSATION

The following table provides information regarding the total compensation that Unilife paid or awarded to its non-employee directors during the year ended June 30, 2010. Directors of Unilife who are also employees do not receive compensation for their services as directors.

Director Compensation
								Nonqualified
	Fees Earned							Deferred
	or Paid			Stock		Option		Compensation		All Other
Name	in Cash			Awards		Awards		Earnings		Compensation			Total
	($)			($)		($) (1)		($)(2)		($)			($)
Slavko James Joseph Bosnjak		105,863	(3)		—		—		9,528		—			115,391
William Galle		45,750			—		240,961		—		307			287,018
Jeff Carter		47,638	(4)		—		240,961		4,287		405,515	(5)		698,401
John Lund(6)		47,542			—		240,961		—		6,487			294,990
Mary Katherine Wold(7)		9,333			—		—		—		—			9,333

(1)	All option awards were issued with an exercise price in Australian dollars. Amounts were converted using the exchange rate on the date of grant of A$1.00 = US$0.9197. The amount referenced is calculated using the grant date fair value of the stock options using the Black-Scholes option-pricing model. See Note 4 of our consolidated financial statements contained elsewhere in this report.
(2)	Statutory contributions of 9% of fees to a superannuation fund (i.e., pension) for Australian directors only.
(3)	Mr. Bosnjak’s fees represent A$120,000 paid in Australian dollars. Amounts were converted using the average exchange rate during the applicable period.
(4)	Mr. Carter’s fees represent A$54,000 paid in Australian dollars. Amounts were converted using the average exchange rate during the applicable period. This amount represents fees earned solely for serving as a director.
(5)	Mr. Carter’s other compensation includes amounts paid for accounting, company secretarial, ASX liaison and other consulting services provided to the Company as well as bonuses. During the previous fiscal year, Mr. Carter achieved a bonus milestone of $66,164 which was paid in the current fiscal year and included in this amount. An additional bonus milestone of $63,517 was paid in the current fiscal year in relation to the successful capitalization and redomiciliation of the Company. Mr. Carter has direct responsibility for the management of the Australian representative office and compliance with Australian listing rules. These fees

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	were paid in Australian dollars and were converted using the average exchange rate during the applicable period.
(6)	Mr. Lund was appointed to the board of directors in November 2009.
(7)	Ms. Wold was appointed to the board of directors in May 2010.

During fiscal 2010, we paid each of our four non-employee directors different amounts of cash compensation. The levels of cash compensation were based on what our board believed was appropriate for a company of our size, with recognition given to the amount of time a particular director was required to spend on Company matters and the director’s length of board service. We paid Mr. Bosjnak an annual cash fee for all of his services as a director, including his service as chairman of the board. We did not compensate him separately for attendance at meetings or for service on board committees. Mr. Bosjnak received the highest level of cash compensation in recognition of his long standing board service and the significant amount of time he spent on the Company’s affairs.

Mr. Galle was also paid an annual fee with no separate meeting or committee fees. His level of compensation was determined by negotiation between our Chief Executive Officer and Mr. Galle at the time he joined the board.

Mr. Lund and Ms. Wold were also paid annual cash fees with no separate meeting fees. Ms. Wold joined our board of directors on May 11, 2010. Ms. Wold will receive an annual cash fee of $25,000 for her service on the board of directors, an annual cash fee of $7,500 for her service on the audit committee, an annual cash fee of $17,500 for chairing the newly formed strategic partnerships committee of the board of directors (which consists of Ms. Wold, Alan Shortall and John Lund and is responsible for overseeing the establishment and maintenance of the strategic partnership relationships between Unilife and its strategic partners), and a cash fee of $1,500 for attending each board or board committee meeting (up to an annual maximum of $6,000).

In addition, on May 11, 2010, the board of directors approved, subject to approval by the stockholders of Unilife as required by the listing rules of the Australian Securities Exchange, a grant of options for Ms. Wold to purchase 100,000 shares of common stock of Unilife under the Unilife Corporation 2009 Stock Incentive Plan. The options, if approved by the stockholders of Unilife, will be exercisable at $6.83 per share (the closing price of the common stock of Unilife on May 11, 2010, the date of grant) for a period of five years from the date of grant, and will vest as follows: 16,667 options vest immediately upon issue which will occur within three business days of the Company obtaining stockholder approval of the issue, 25,000 options vest on the 12 month anniversary from the date of grant, 25,000 options vest on the 24 month anniversary from the date of grant and 33,333 options vest on the 36 month anniversary from the date of grant.

In January 2010, Unilife issued stock options to three members of the board of directors: Jeff Carter, John Lund and William Galle. Each of these board members received 100,000 options exercisable at A$7.20 per share for a period of five years from the date of grant. The options will vest as follows: 16,667 options vested on the date of grant, 25,000 options will vest on the 12 month anniversary from the date of grant, 25,000 options will vest on the 24 month anniversary from the date of grant and 33,333 options will vest on the 36 month anniversary from the date of grant. The issuance of these options was approved by Unilife stockholders on January 8, 2010.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information regarding ownership of our common stock by (i) each person, or group of affiliated persons who is known by us to beneficially own 5% or more of our common stock, (ii) each of our directors, (iii) each of our named executive officers and (iv) all current directors and executive officers as a group. All of this information gives effect to the redomiciliation and the share consolidation effected in connection therewith.

Beneficial ownership is determined according to the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. The beneficial ownership percentages set forth below are based on 55,230,454 shares of common stock outstanding as of September 15, 2010. All shares of common stock owned by such person, including shares of common stock underlying stock options that are currently exercisable or exercisable within 60 days after September 15, 2010 (all of which we refer to as being currently exercisable) are deemed to be outstanding and beneficially owned by that person for the purpose of computing the ownership percentage of that person, but are not considered outstanding for the purpose of computing the

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percentage ownership of any other person. Except as otherwise indicated, to our knowledge, each person listed in the table below has sole voting and investment power with respect to the shares shown to be beneficially owned by such person, except to the extent that applicable law gives spouses shared authority.

	Number of Shares			Percentage of Shares
Name and Address of Beneficial Owner	Beneficially Owned			Beneficially Owned
Directors and Named Executive Officers(1)
Slavko James Joseph Bosnjak		595,784	(2)		1.1	%
Alan Shortall		4,574,963	(3)		8.2	%
John Lund		36,667	(4)		*
William Galle		108,333	(5)		*
Jeff Carter		133,378	(6)		*
Mary Katherine Wold		—	(7)		*
Marc S. Firestone		—	(7)		*
R. Richard Wieland II		80,000	(8)		*
Daniel Calvert		101,082			*
Eugene Shortall		200,000			*
Bernhard Opitz		167,332	(9)		*
Mark V. Iampietro		150,665	(10)		*
All directors and executive officers as a group (14 persons)		6,373,930			11.4	%

*	Indicates less than 1%
(1)	The address of each director and executive officer listed above is c/o Unilife Corporation, 633 Lowther Road, Lewisberry, Pennsylvania 17339.
(2)	Includes options to purchase 108,333 shares of common stock which are currently exercisable. Does not include options to purchase 58,333 shares of common stock which are not currently exercisable.
(3)	Includes (i) 833,333 shares of common stock subject to certain transfer restrictions set forth in Mr. A. Shortall’s employment agreement dated October 26, 2008 and (ii) options to purchase 833,333 shares of common stock which are currently exercisable. Does not include options to purchase 1,250,667 shares of common stock which are not currently exercisable.
(4)	Includes options to purchase 16,667 shares of common stock which are currently exercisable. Does not include options to purchase 83,333 shares of common stock which are not currently exercisable.
(5)	Represents options to purchase 108,333 shares of common stock which are currently exercisable. Does not include options to purchase 83,333 shares of common stock which are not currently exercisable.
(6)	Includes options to purchase 16,667 shares of common stock which are currently exercisable. Does not include options to purchase 83,333 shares of common stock which are not currently exercisable.
(7)	Does not include options to purchase 100,000 shares of common stock, the issuance of which is subject to shareholder approval pursuant to the ASX listing rules.
(8)	Does not include options to purchase 240,000 shares of common stock which are not currently exercisable.
(9)	Includes options to purchase 166,667 shares of common stock which are currently exercisable. Does not include options to purchase 83,333 shares of common stock which are not currently exercisable.
(10)	Includes options to purchase 100,000 shares of common stock which are currently exercisable.

Item 13.   Certain Relationships and Related Transactions, and Director Independence

During the last three fiscal years, we have been a party to the following transaction in which the amount involved exceeded $120,000 and in which any director, executive officer, holder of more than 5% of our capital stock, or their immediate family members, had a material interest.

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On January 22, 2009, we entered into a consulting agreement with Jeff Carter, a member of our board of directors and former Chief Financial Officer. Under the terms of the agreement, Mr. Carter will perform finance, accounting and secretarial consulting services in Australia. The agreement had an initial term of seven months that expired on September 30, 2009 and was extended for a six month term expiring on March 31, 2010. The Company currently pays Mr. Carter on a month to month basis for these services. Under the agreement, we will pay Mr. Carter a fee for the consulting services of A$20,000 per month.

On October 26, 2008, we entered into a Deed of Settlement and Release with Alan Shortall, our director and Chief Executive Officer, and certain other individuals (collectively, the “Founding Shareholders”), pursuant to which, as a final settlement of our obligations under the agreement for our acquisition of Unitract, we agreed to issue 1,666,667 shares of common stock to the Founding Shareholders if we reported net income of at least A$6.5 million during any fiscal year prior to October 31, 2014 and to issue an additional 1,666,667 shares of common stock if we reported net income of at least A$12 million during any fiscal year prior to October 31, 2014. Pursuant to a subsequent notification from the Founding Shareholders to us dated as of October 27, 2009, three of the four Founding Shareholders (Alan Shortall, Joseph Kaal and Craig Thorley) each relinquished, for no consideration, all of the shares he would have received pursuant to the Deed of Settlement and Release and directed us to issue all his founder shares to the fourth Founding Shareholder, Roger Williamson, in recognition of the fact that Mr. Williamson provided seed capital in connection with the founding of the company. During the year ended June 30, 2009, we met both of the net income requirements and therefore, in November 2009, we issued 3,333,333 shares of common stock to Mr. Williamson, which were in full satisfaction of our obligation to all of the Founding Shareholders.

We review all relationships and transactions in which we and our directors and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. Our Chief Executive Officer and Chief Financial Officer are primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related party transactions. Our audit committee reviews and approves or ratifies any related party transaction pursuant to the authority given under the charter of the audit committee.

Director Independence

Our board of directors currently consists of seven members: Slavko James Joseph Bosnjak, Alan Shortall, John Lund, William Galle, Jeff Carter, Mary Katherine Wold and Marc S. Firestone. Our board of directors has an audit committee, a compensation committee, a nominating and corporate governance committee and a strategic partnerships committee. The audit committee consists of Slavko James Joseph Bosnjak, John Lund and Mary Katherine Wold. The compensation committee consists of Slavko James Joseph Bosnjak, John Lund and William Galle. The nominating and governance committee consists of Slavko James Joseph Bosnjak, John Lund, William Galle and Marc S. Firestone. The strategic partnerships committee consists of Alan Shortall, John Lund, Mary Katherine Wold and Marc S. Firestone. Our board of directors has determined that each of Slavko James Joseph Bosnjak, John Lund, William Galle, Mary Katherine Wold and Marc S. Firestone is ’independent” within the meaning of Rule 10A-3 under the Exchange Act and the Nasdaq listing standards and that John Lund is an “audit committee financial expert” as defined under the SEC rules.

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On July 20, 2010, Unilife standardized the fees for all independent board members as follows:

Board of Directors:
Annual retainer per director	$	25,000
Fee per meeting for a full board meeting (limit 4 per year)		1,500
Incremental fee for out of town meeting		1,000
Audit Committee:
Annual retainer for chairperson		20,000
Annual retainer for other members		10,000
Fee per meeting (limit four per year)		500
Compensation Committee:
Annual retainer for chairperson		15,000
Annual retainer for other members		7,500
Fee per meeting (limit four per year)		250
Nominating and Governance Committee:
Annual retainer for chairperson		10,000
Annual retainer for other members		5,000
Fee per meeting		250
Strategic Partnership Committee:
Annual retainer for chairperson		17,500
Annual retainer for other members		7,500
Fee per meeting (limit four per year)		500

Item 14.   Principal Accountant Fees and Services

Fees Paid to Our Independent Registered Public Accounting Firm

The following table sets forth the fees for services provided by KPMG LLP and BDO Kendalls Audit & Assurance (WA) Pty Ltd (“BDO”) during the years ended June 30, 2010 and 2009. The Company appointed KPMG LLP as its principal accountant in March 2010.

	2010		2009
Audit Fees(1)	$	281,488	$	118,758
Audit-Related Fees(2)		188,780		7,854
Tax Fees(3)		16,728		25,403
All Other Fees		—		—
Total Fees	$	486,996	$	152,015

(1)	Audit fees include amounts for professional services in connection with the annual audit of our consolidated financial statements and the review of our financial statements included in our Quarterly Reports on Form 10-Q. For 2010 audit fees includes $95,488 paid to BDO.
(2)	Audit-related fees include amounts for professional services in connection with the review of our registration statements on Forms 10 and S-1. For 2010 audit-related fees include $181,780 paid to BDO.
(3)	Tax fees include amounts for professional services in connection with tax compliance, tax advice and tax planning paid to BDO.

Audit Committee’s Pre-Approval Policy

It is the audit committee’s policy to approve in advance the engagement of the independent auditor for all audit services and non-audit services. The audit committee may delegate authority to pre-approve audit or non-audit services to one or more of its members. Any pre-approval authorized by a member of the audit committee to whom

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authority has been delegated must specify clearly in writing the services and fees approved by such member. Any member to whom such authority is delegated shall report any pre-approval decisions made under such delegated authority to the audit committee at its next scheduled meeting.

PART IV

Item 15.   Exhibits and Financial Statement Schedules

(a) Documents files as part of this report:

(1) Financial Statements

The financial statements required by this Item 15 are set forth in Part II, Item 8 of this report.

(b) Exhibits. The following Exhibits are filed as a part of this report

Exhibit				Included	Incorporated by Reference Herein
No.			Description of Exhibit	Herewith	Form	Exhibit			Filing Date
	2	.1	Amended and Restated Merger Implementation Agreement dated as of September 1, 2009 between Unilife Medical Solutions Limited and Unilife Corporation		10		2	.1	February 11, 2010
	2	.2	Share Purchase Agreement among Unilife Medical Solutions Limited, Edward Paukovits, Jr., Keith Bocchicchio, and Daniel Adlon dated as of October 25, 2006 and amended as of September 26, 2007		10		2	.2	January 6, 2010
	3	.1	Certificate of Incorporation of Unilife Corporation		10		3	.1	November 12, 2009
	3	.2	Amended and Restated Bylaws of Unilife Corporation		8-K		3	.1	August 17, 2010
	4	.1	Form of Common Stock Certificate		10		4	.1	November 12, 2009
	10	.1	Exclusive Agreement dated as of June 30, 2008 between Unilife Medical Solutions Limited and Sanofi Winthrop Industrie		10		10	.1	November 12, 2009
	10	.2*	First Amendment dated as of June 29, 2009 to Exclusive Agreement dated as of June 30, 2008 between Unilife Medical Solutions Limited and Sanofi Winthrop Industrie		10		10	.2	November 12, 2009
	10	.3*	Industrialization Agreement dated as of June 30, 2009 between Unilife Medical Solutions Limited and Sanofi Winthrop Industrie		10		10	.3	February 6, 2010
	10	.4	Business Lease, dated as of August 17, 2005, between Integrated BioSciences, Inc. and AMC Delancey Heartland Partners, L.P.		10		10	.4	November 12, 2009
	10	.5	Agreement dated as of September 15, 2003 between Integrated BioSciences, Inc. and B. Braun Medical, Inc. and amendments thereto		10		10	.5	February 1, 2010
	10	.6	Promissory Note, dated as of December 30, 2005 between Integrated BioSciences, Inc. and Commerce Bank		10		10	.6	November 12, 2009
	10	.7	Promissory Note, dated as of August 25, 2006 between Integrated BioSciences, Inc. and Commerce Bank		10		10	.7	November 12, 2009

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Exhibit				Included	Incorporated by Reference Herein
No.			Description of Exhibit	Herewith	Form	Exhibit			Filing Date
	10	.8	Employment Agreement, dated as of October 26, 2008 between Unilife Medical Solutions Limited and Alan Shortall		10		10	.8	November 12, 2009
	10	.9	Employment Agreement, dated as of February 15, 2005 between Unilife Medical Solutions Limited and Jeff Carter		10		10	.9	November 12, 2009
	10	.10	Employment Agreement, dated as of November 10, 2009 between Unilife Medical Solutions, Inc. and Daniel Calvert		10		10	.10	November 12, 2009
	10	.11	Employment Agreement, dated as of November 10, 2009 between Unilife Medical Solutions, Inc. and Bernhard Opitz		10		10	.11	November 12, 2009
	10	.12	Employment Agreement, dated as of November 10, 2009 between Unilife Medical Solutions, Inc. and Mark Iampietro		10		10	.12	November 12, 2009
	10	.13	Employment Agreement, dated as of November 10, 2009 between Unilife Medical Solutions, Inc. and Stephen Allan		10		10	.13	November 12, 2009
	10	.14	Employment Agreement, dated as of November 10, 2009 between Unilife Medical Solutions, Inc. and Eugene Shortall		10		10	.14	November 12, 2009
	10	.15	Consulting Agreement, dated as of January 22, 2009 between Unilife Medical Solutions Limited and Joblak Pty Ltd		10		10	.15	November 12, 2009
	10	.16	Deed of Mutual Release, dated January 12, 2009 between Unilife Medical Solutions Limited and Jeff Carter		10		10	.16	November 12, 2009
	10	.17	Unilife Corporation Employee Stock Option Plan		10		10	.17	November 12, 2009
	10	.18	Unilife Corporation 2009 Stock Incentive Plan		10		10	.18	November 12, 2009
	10	.19	Unilife Medical Solutions Limited Exempt Employee Share Plan		10		10	.19	November 12, 2009
	10	.20	Agreement dated November 12, 2009 between Unilife Medical Solutions, Inc. and Mikron Assembly Technology		10		10	.20	February 10, 2010
	10	.21	Purchase and Mutual Indemnification Agreement dated November 16, 2009 between Unilife Cross Farm LLC and Greenspring Partners, LP		10		10	.21	January 6, 2010
	10	.22	Offer of assistance dated October 16, 2009 from the Commonwealth of Pennsylvania to Unilife Medical Solutions and acceptance of the offer		10		10	.22	January 6, 2010
	10	.23	Agreement Between Unilife Cross Farm LLC and L2 Architecture dated as of December 29, 2009, as amended		10		10	.23	January 6, 2010
	10	.24	Agreement between Unilife Cross Farm LLC and HSC Builders & Construction Managers dated as of December 14, 2009, as amended		10		10	.24	January 6, 2010
	10	.25	Development Agreement, dated December 14, 2009 between Unilife Cross Farm LLC and Keystone Redevelopment Group LLC		10		10	.25	February 1, 2010

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Exhibit				Included	Incorporated by Reference Herein
No.			Description of Exhibit	Herewith	Form	Exhibit			Filing Date
	10	.26	Amended and Restated Operating Agreement dated December 14, 2009 of Unilife Cross Farm LLC		10		10	.26	January 6, 2010
	10	.27	Form of Share Purchase Agreement between Unilife Medical Solutions Limited and each of the US investors in the October and November 2009 private placement		10		10	.27	January 6, 2010
	10	.28	Form of Subscription Agreement between Unilife Medical Solutions Limited and each of the Australian investors in the October and November 2009 private placement		10		10	.28	January 6, 2010
	10	.29	2009 Share Purchase Plan Terms and Conditions		10		10	.29	January 6, 2010
	10	.30	Offer Letter dated November 12, 2008 from Unilife Medical Solutions Limited to Daniel Calvert		10		10	.30	February 1, 2010
	10	.31	Offer Letter dated November 20, 2008 from the Coelyn Group, on behalf of Unilife Medical Solutions Limited to Bernhard Opitz		10		10	.31	February 1, 2010
	10	.32	Consulting Agreement between Unilife Medical Solutions Limited and Medical Middle East Limited		10		10	.32	February 1, 2010
	10	.33	Option Deed, dated January 21, 2010 between Unilife Medical Solutions Limited and Edward Fine		10		10	.33	February 1, 2010
	10	.34	Deed of Settlement and Release dated October 26, 2008 among Unilife Medical Solutions Limited and Craig Thorley, Joseph Kaal, Alan Shortall and Roger Williamson and notification related thereto dated October 27, 2009		10		10	.34	February 10, 2010
	10	.35	Deed of Confirmation of Intellectual Property Rights and Confidentiality among Unilife Medical Solutions Limited, Unitract Syringe Pty Limited, Craig Thorley and Joseph Kaal		10		10	.35	February 10, 2010
	10	.36	Form of Restricted Stock Agreement under the Unilife Corporation 2009 Stock Incentive Plan between Unilife Corporation and Alan Shortall		10		10	.36	February 1, 2010
	10	.37	Form of Unilife Corporation Nonstatutory Stock Option Agreement between Unilife Corporation and Alan Shortall		10		10	.37	February 1, 2010
	10	.38	Membership Interest Purchase Agreement, dated December 14, 2009 between Unilife Cross Farm LLC and Cross Farm, LLC.		10		10	.38	February 1, 2010
	10	.39	Letter Agreement dated January 29, 2010 between sanofi-aventis and Unilife Medical Solutions.		10		10	.39	February 1, 2010
	10	.40	Form of Restricted Stock Agreement Under the Unilife Corporation 2009 Stock Incentive Plan		10-Q		10	.1	March 24, 2010
	10	.41	Form of Unilife Corporation Nonstatutory Stock Option Notice		10-Q		10	.2	March 24, 2010
	10	.42*	Letter Agreement dated February 25, 2010 between sanofi-aventis and Unilife Medical Solutions Limited		10-Q		10	.1	May 17, 2010
	10	.43	Employment Agreement, dated as of June 8, 2010 between Unilife Corporation and R Richard Wieland		8-K		10	.1	June 14, 2010

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Exhibit				Included	Incorporated by Reference Herein
No.			Description of Exhibit	Herewith	Form	Exhibit			Filing Date
	10	.44	Separation Agreement and General Release, dated as of June 28, 2010 between Unilife Corporation and Daniel Calvert		8-K		10	.1	July 2, 2010
	10	.45	Employment Agreement, dated as of July 6, 2010 between Unilife Corporation and J. Christopher Naftzger	X
	10	.46	Employment Agreement, dated as of July 27, 2010 between Unilife Corporation and Dennis P. Pyers	X
	10	.47	Non-revolving Credit Agreement dated August 13, 2010 between Unilife Cross Farm LLC and Univest National Bank and Trust Co.	X
	10	.48	Non-revolving Promissory Note dated August 13, 2010 between Unilife Cross Farm LLC and Univest National Bank and Trust Co.	X
	10	.49	Surety dated August 13, 2010 between Unilife Corporation and Univest National Bank and Trust Co.	X
	10	.50	Security and Control Agreement Regarding Reserve Account dated August 13, 2010 between Unilife Corporation and Univest National Bank and Trust Co.	X
	21		List of subsidiaries of Unilife Corporation		10		21		January 6, 2010
	23	.1	Consent of KPMG LLP	X
	23	.2	Consent of BDO Kendalls Audit & Assurance (WA) Pty Ltd	X
	31	.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	X
	31	.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	X
	32	.1	Section 1350 Certification	X
	32	.2	Section 1350 Certification	X

108

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

UNILIFE CORPORATION

By:  /s/  Alan Shortall

Name:     Alan Shortall

Title:  Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/  Alan Shortall Alan Shortall	Director and Chief Executive Officer (Principal Executive Officer)	September 28, 2010
/s/  R. Richard Wieland II R. Richard Wieland	Chief Financial Officer and Executive Vice President (Principal Financial Officer)	September 28, 2010
/s/  Dennis P. Pyers Dennis P. Pyers	Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)	September 28, 2010
/s/  John Lund John Lund	Director	September 28, 2010
/s/  William Galle William Galle	Director	September 28, 2010
/s/  Jeff Carter Jeff Carter	Director	September 28, 2010
/s/  Slavko James Joseph Bosnjak Slavko James Joseph Bosnjak	Chairman and Director	September 28, 2010
/s/  Mary Katherine Wold Mary Katherine Wold	Director	September 28, 2010
/s/  Marc S. Firestone Marc S. Firestone	Director	September 28, 2010

109

EX-10.45

Exhibit 10.45

EMPLOYMENT AGREEMENT

This employment agreement is made and entered into as of this 6 day of July, 2010, by and between Unilife Corporation (“Unilife”) and J. Christopher Naftzger (“Naftzger”). The term “Unilife” shall include its subsidiaries, affiliates, assigns and successors in interest under Sections 7, 8, and 13.

WHEREAS, Unilife wishes to employ Naftzger as General Counsel, Corporate Secretary and Chief Compliance Officer, and Naftzger wishes to enter into this agreement to formalize his employment agreement; and

WHEREAS, Unilife is engaged in the business of designing, developing, manufacturing and supplying innovative healthcare safety products for medical device and pharmaceutical industries; and

WHEREAS, Naftzger will develop valuable relationships by virtue of his employment with Unilife, and Naftzger will have access to valuable confidential and proprietary information and trade secrets belonging to Unilife; and

WHEREAS, Unilife and Naftzger desire to set forth the terms of their employment relationship in this agreement;

NOW, THEREFORE, in consideration of the promises and covenants set forth herein, and intending to be legally bound hereby, the parties agree as follows:

1. Term. This agreement shall be effective upon the counter-execution of this agreement and is for an initial multi-year term commencing on the effective date and expiring on June 30, 2012. This agreement will automatically renew for one-year periods annually thereafter, unless either party gives the other party thirty (30) days written notice in advance of the relevant expiration date of its intention not to renew the agreement. Upon expiration or earlier termination of this employment relationship, the parties will be relieved of their duties and obligations under this agreement, except that the rights and obligations of Unilife under Section 6 below shall remain in full force and effect until all appropriate payments have been made to Naftzger and the rights and obligations of Naftzger set forth in Sections 7 and 8 below shall remain in full force and effect and shall survive the expiration or termination of this agreement, regardless of the reason(s) for termination.

2. Position and Duties.

     (a) Unilife will employ Naftzger as General Counsel, Corporate Secretary, and Chief Compliance Officer and Naftzger agrees to serve in such capacity for Unilife with responsibility for Unilife’s Legal and Corporate Secretarial function and such other duties as are assigned to him by the Chief Executive Officer of Unilife, and shall have vested in him the authority and duties typically held by an employee in such position. Naftzger shall report to the Chief Executive Officer, with respect to the performance of

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these duties, and shall be a member of the Executive Team. In the performance of these duties, Naftzger shall devote his knowledge, skill, attention, energies and all of his business time, and shall comply with all of Unilife’s policies, rules, and procedures, as they may be amended from time to time. Naftzger shall not engage in any endeavor that would conflict with the rendition of his services to Unilife, either directly or indirectly, without the prior written consent of Unilife; provided, however, Naftzger may participate in civic, charitable, educational, industry and professional organizations, to the extent that such participation does not interfere with the performance of his duties hereunder; and Naftzger may also serve on corporate boards and committees, but only with the prior written consent of Unilife.

     (b) Notwithstanding the responsibilities and duties contained in Section 2(a) above, Naftzger acknowledges that all material decisions relating to the management of Unilife’s business will be made by the Board of Directors of Unilife. In addition, any decisions which have the capacity to affect significantly the financial standing of Unilife must be referred to the Board of Directors of Unilife which will have ultimate control in respect of these matters.

3. Compensation.

     (a) Base Salary. Naftzger shall be paid an annual base salary of Two Hundred Thousand Dollars ($200,000.00) payable in accordance with Unilife’s standard payroll practices. Naftzger’s base salary will be subject to the customary withholding and employment taxes, as required by law, with respect to compensation paid by an employer to an employee. At the discretion of the Board of Directors of Unilife, Naftzger shall be eligible for increases in base salary. Further, Unilife will not reduce Naftzger’s base salary to less than what is agreed to herein.

     (b) Bonus. Naftzger shall be eligible to participate in Unilife’s Incentive Bonus Plan in amounts and percentages as annually determined by Unilife’s Board of Directors and Chief Executive Officer. For calendar year 2010, the potential cash bonus amount will be thirty percent (30%) of base salary, prorated based on the number of days employed in 2010. For calendar years 2011 and 2012, Naftzger’s annual target cash bonus shall be a minimum of thirty percent (30%) of base salary. Bonuses are subject to achievement of such goals and objectives as the Compensation Committee of the Board of Directors, upon recommendation of the Chief Executive Officer, determines in a set of Key Performance Indicators. Any bonus payable for a calendar year shall be paid in a lump-sum payment in the following calendar year on or before March 15. Naftzger’s bonuses will be subject to the customary withholding and employment taxes, as required by law, with respect to compensation paid by an employer to an employee.

4. Benefits.

     (a) Benefits Generally Available to Unilife Employees. Naftzger shall be eligible to participate in Unilife’s benefits programs (including any equity incentive plan of Unilife or its affiliates), as they may change from time to time. The benefits provided

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to Naftzger will be the same as the benefits provided to other similarly situated Unilife employees, and may be changed upon expiration or other termination of the current benefits contracts. For further information, Naftzger should review any applicable benefit plan documents, which will govern the terms of the benefits. Notwithstanding the above, Unilife agrees to request a waiver of the waiting period for health benefits for Naftzger and his spouse and will repay Naftzger for any negative tax consequences of such waiver. Alternatively, Unilife will pay Naftzger’s current COBRA payment until such time as he is eligible for benefits.

     (b) Vacation. Naftzger shall also receive four (4) weeks of paid vacation per calendar year. Any unused vacation days may be carried over or paid in lieu thereof, to the extent allowed by Unilife’s policy for similarly situated employees.

     (c) Equity Plans. All incentive compensation and stock-based compensation that Naftzger may receive from Unilife shall be subject to any policy adopted by Unilife, now or hereafter existing, that imposes on Naftzger stock ownership requirements, stock holding requirements, stock liquidation restrictions or recoupment provisions provided that such requirements, restrictions and recoupment provisions also apply to similarly situated members of senior management. Any stock options and other stock-based awards that Naftzger may receive from Unilife shall be governed by the applicable, underlying award agreement.

     (d) Expenses. Unilife shall reimburse Naftzger for all reasonable and necessary expenses incurred by him in carrying out his duties under this Agreement in accordance with Unilife’s business expense policies, including without limitation, requirements with respect to reporting, documentation and payment of such expenses. All such expenses shall be paid no later than December 31^st of the calendar year following the year in which such expenses were incurred.

5. Indemnification. Unilife agrees to provide Naftzger with indemnification equivalent to that provided to other members of senior management and pursuant to Unilife’s Directors and Officers insurance policies, as amended from time to time.

6. Termination and Pay upon Termination.

     (a) General Rule. In the event that Unilife terminates this agreement and Naftzger’s employment without Cause as defined herein, including employment termination due to Unilife’s election not to renew this agreement where Naftzger was willing and able to continue performing services under the terms of this agreement, Unilife will pay Naftzger:

     (i) his base salary, at the rate in effect immediately before the date that Naftzger’s employment terminates, for twelve (12) months, in accordance with Unilife’s standard payroll practices then in effect, commencing on the fifteenth (15^th) day after the date that Naftzger’s employment terminates and the

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General Release provided for in Section 10 of this Agreement becomes irrevocable; and

     (ii) provided that Naftzger is eligible for and timely elects to receive COBRA health care continuation coverage, the cost of Naftzger’s COBRA health care continuation coverage premiums for twelve (12) months, commencing on the first of the month immediately after the month which includes the date that Naftzger’s employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable.

In the event that Naftzger terminates this agreement for any reason, including Naftzger’s election not to renew the agreement, Naftzger shall not receive any compensation or benefits from the time that he ceases to devote full time and attention to Unilife’s business, and, if Naftzger terminates this agreement prior to June 30, 2012, Naftzger shall repay Unilife an amount equal to the aggregate cost incurred by Unilife under Section 9 of this Agreement in connection with Naftzger’s relocation to Pennsylvania, unless such termination is due to Naftzger’s death, total disability or termination of employment under the terms of Section 6(b) of this Agreement in connection with a Change in Control , as defined below. The obligation to repay the expense of relocation may be waived by the Compensation Committee of the Board of Directors in its sole discretion. In addition, Naftzger agrees to provide Unilife with thirty (30) days advance written notice of his intent to terminate his employment, whether during the initial term or any renewal thereof. Upon termination of this agreement, the parties will be relieved of their duties and obligations, except that the rights and obligations of Unilife under this Section 6(a) shall remain in full force and effect until all appropriate payments have been made to Naftzger and the rights and obligations of Naftzger set forth in Sections 7 and 8 below shall remain in full force and effect and shall survive the expiration or termination of this agreement, regardless of the reason(s) for termination. Upon termination of this agreement, Naftzger shall not have any further contact with any customers of Unilife until the expiration of the conditions of Section 8 of this Agreement.

     (b) Termination Following a Change in Control.

     (i) Termination Pay. Notwithstanding paragraph (a) immediately above, in the event that Naftzger’s employment is terminated coincident with a Change in Control as defined in subparagraph (iii) immediately below, then Unilife in lieu of and not in duplication of the severance compensation provided for in paragraph (a) immediately above, shall pay Naftzger:

     (A) his base salary, at the rate in effect immediately before the date that Naftzger’s employment terminates, for eighteen (18) months, in accordance with Unilife’s standard payroll practices then in effect, commencing on the fifteenth (15^th) day after the date that Naftzger’s employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable,

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     (B) provided that Naftzger is eligible for and timely elects to receive COBRA health care continuation coverage, the cost of Naftzger’s COBRA health care continuation coverage premiums for eighteen (18) months, commencing on with the first of the month immediately after the month which includes the date that Naftzger’s employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable,

     (C) payment of a lump-sum amount, equal to the amount of the bonus, if any, earned by and paid to Naftzger for the last completed fiscal year prior to the year in which his employment terminates, which will be payable on the fifteenth (15^th) day after the date that Naftzger’s employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable, and

     (D) notwithstanding anything to the contrary, all of his outstanding and unvested options and other stock-based awards shall vest immediately upon such termination of employment following the Change in Control.

Notwithstanding anything to the contrary, if the Change in Control trigger is a change in Alan Shortall no longer being Chief Executive Officer of Unilife, Naftzger shall have the option to voluntarily resign in the event of such a Change in Control, and receive the severance benefits set forth in this Section 6(b)(i), however, Naftzger must exercise such resignation right in writing within one hundred and eighty (180) days of such Change in Control event or, in the absence of such written resignation, he shall be deemed to have acknowledged that no Change in Control has occurred for purposes of this Section 6(b)(i).

     (ii) Definition of “Cause”. “Cause” will mean any one or more of the following:

     (A) material neglect of assigned duties, willful misconduct in connection with the performance of duties, or refusal to perform assigned duties (other than by reason of disability) which continues uncured for thirty (30) days following receipt of written notice of such deficiency from the Chief Executive Officer, specifying the scope and nature of the deficiency;

     (B) an act of dishonesty;

     (C) engaging in illegal conduct or committing a crime;

     (D) being the subject of disciplinary action by any disciplinary body governing attorneys, losing his license to practice law or otherwise

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becoming disqualified to practice law or represent Unilife as counsel in Pennsylvania or any other jurisdiction in which Naftzger is currently authorized to practice law or becomes authorized to practice law while employed by Unilife;

     (E) engaging in any act of moral turpitude that causes material harm to Unilife or its reputation;

     (F) breaching, in any material respect, the terms of any agreement with Unilife; or

     (G) commencement of employment with any other employer while an employee of Unilife without the prior written consent of the Chief Executive Officer.

Any determination of “Cause” as used herein will be made in good faith by the Chief Executive Officer.

     (iii) Definition of “Change in Control”. “Change in Control” means a: (i) Change in Ownership of Unilife Corporation, (ii) Change in Effective Control of Unilife Corporation, (iii) Change in the Ownership of Assets of Unilife Corporation, all as described herein and construed in accordance with section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), or (iv) a change in the Chief Executive Officer whereby the position is no longer held by Alan Shortall.

     (A) A Change in Ownership of Unilife Corporation shall occur on the date that any one Person acquires, or Persons Acting as a Group (or Group) acquire, ownership of the capital stock of Unilife Corporation that, together with the stock held by such Person or Group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the capital stock of Unilife Corporation. However, if any one Person is, or Persons Acting as a Group are, considered to own more than fifty percent (50%) of the total fair market value or total voting power of the capital stock of Unilife Corporation, the acquisition of additional stock by the same Person or Persons Acting as a Group is not considered to cause a Change in Ownership of Unilife Corporation or to cause a Change in Effective Control of Unilife Corporation. An increase in the percentage of capital stock owned by any one Person, or Persons Acting as a Group, as a result of a transaction in which Unilife Corporation acquires its stock in exchange for property will be treated as an acquisition of stock.

     (B) A Change in Effective Control of Unilife Corporation shall occur on the date a majority of members of the Board of Directors of Unilife Corporation is replaced during any twelve (12)-month period by directors whose appointment or election is not endorsed by a majority of

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the members of the Board of Directors of Unilife Corporation before the date of the appointment or election.

     (C) A Change in the Ownership of Assets of Unilife Corporation shall occur on the date that any one Person acquires, or Persons Acting as a Group acquire (or has or have acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such Person or Persons), assets (including tangible/real property and intangible property (such as goodwill)) from Unilife Corporation the total gross fair market value of which is more than fifty percent (50%) of the total gross fair market value of all of the assets of Unilife Corporation immediately before such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of Unilife Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

     (D) The following rules of construction apply in interpreting the definition of Change in Control:

     (I) A Person means any individual, entity or group within the meaning of Section 13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934, as amended, other than employee benefit plans sponsored or maintained by Unilife Corporation and by entities controlled by Unilife Corporation or an underwriter of the capital stock of Unilife Corporation in a registered public offering.

     (II) Persons will be considered to be Persons Acting as a Group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation. If a Person owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a Group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. Persons will not be considered to be acting as a Group solely because they purchase assets of the same corporation at the same time or purchase or own stock of the same corporation at the same time, or as a result of the same public offering.

     (III) For purposes of this Section 6(b), fair market value shall be determined in accordance with Code Section 409A.

     (IV) A Change in Control shall not include a transfer to a related person as described in Code section 409A or a public offering of capital stock of Unilife Corporation.

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     (E) For purposes of this Section 6(b), Code section 318(a) applies to determine stock ownership. Stock underlying a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). For purposes of the preceding sentence, however, if a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulation §1.83-3(b) and (j)), the stock underlying the option is not treated as owned by the individual who holds the option.

7. Confidential Information.

     (a) Naftzger acknowledges that Unilife has a valuable property interest in all aspects of its business relationships with its customers, clients, vendors and suppliers. In the course of Naftzger’s work with Unilife, Naftzger will become aware of and familiar with secret and confidential information of Unilife relating to its customers, clients, vendors and suppliers, and its internal business operations. Secret and confidential information includes, but is not limited to, Unilife’s business plans, customer lists, customer data, marketing plans, supplier and vendor lists and cost information, software and computer programs, data processing systems and information contained therein, financial statements, financial data, acquisition and divestiture plans, and any other trade secrets or confidential or proprietary information, documents, reports, plans, or data, of or about Unilife that is not already available to the public.

     (b) Naftzger agrees that he will not, without the written consent of Unilife, during the term of this agreement or thereafter, disclose or make any use of secret and confidential information, except as may be required in the performance of his duties under Section 2 of this agreement. Naftzger agrees that, following the termination of his employment with Unilife for any reason, he will never use secret and confidential information to compete with Unilife in any manner, and he will never disclose any secret and confidential information to any other business or individual, unless such secret or confidential information is: (i) publicly known through no breach of the provisions of this Section 7 by either party, (ii) lawfully disclosed by a third party, or (iii) disclosed pursuant to legal requirement or court order. In no event shall any disclosure made to investment banking firms or private equity firms at the request of Unilife and as part of Naftzger’s duties ever be considered a violation of this Section 7.

     (c) Upon termination of this agreement, Naftzger shall surrender to Unilife all records and all paper and/or electronic copies made of those records that pertain to any aspect of the business of Unilife, including all secret and confidential information.

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8. Agreement Not To Compete.

     (a) In consideration for continued employment by Unilife and the benefits of this agreement, Naftzger agrees to be bound by the covenant not to compete as set forth in Section 8 of this agreement below.

     (b) Naftzger agrees that during the term of this agreement and for a period of two (2) years following the termination of this agreement for any reason, he will not, directly or indirectly:

     (i) render services to, become employed by, be engaged as a consultant by, own, or have a financial or other interest in (either as an individual, partner, joint venture, owner, manager, employee, partner, officer, director, independent contractor, or other similar role) any business that is engaged in any business activity that is in competition with the activities of Unilife, as of the date of the termination of this agreement.

     (ii) induce, offer, assist, encourage, or suggest that another business or enterprise offer employment to or enter into a consulting arrangement with any individual who is employed by Unilife, or induce, offer, assist, encourage, or suggest that any Unilife employee terminate her or her employment with Unilife, or accept employment with any other business or enterprise.

     (c) In the event that Naftzger commits any breach of Section 8(b) above, Naftzger acknowledges that Unilife would suffer substantial and irreparable harm and damages. Accordingly, Naftzger hereby agrees that in such event, Unilife shall be entitled to temporary and/or permanent injunctive relief, without the necessity of proving damage, to enforce the provisions of this Section, all without prejudice to any and all other remedies that Unilife may have at law or in equity and that Unilife may elect or invoke. Naftzger agrees that if any of the provisions of this Section are or become unenforceable, the remainder hereof shall nevertheless remain binding upon him to the fullest extent possible, taking into consideration the purposes and spirit of this agreement. Any invalid or unenforceable provision is to be reformed to the maximum time, geographic and/or business limitations permitted by applicable laws, so as to be valid and enforceable.

     (d) Naftzger expressly acknowledges and agrees that the restrictive covenants set forth in Sections 7 and 8 above are absolutely necessary to protect the legitimate business interests of Unilife, because he is employed in a position of trust and confidence and is provided with extensive access to Unilife’s most confidential and proprietary trade secrets, and has significant involvement in important business relationships, which constitute the goodwill of Unilife. Naftzger further agrees and acknowledges that these restrictive covenants are reasonable, will not restrict him from earning a livelihood following the termination of employment, and are intended by the parties to be enforceable following termination of employment for any reason.

     (e) In the event that Unilife must bring legal action to enforce or seek a remedy for any breach of the provisions of Sections 7 or 8 of this agreement and

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Naftzger is found by a court to have breached any of these provisions, Naftzger agrees to reimburse Unilife for any and all expenses, including attorneys’ fees and court costs, incurred by it in enforcing the terms of these Sections of the agreement.

9. Relocation and Temporary Housing Expenses.

(a) Unilife shall pay Naftzger $75,000 (the “Relocation Payment”), to assist Naftzger in paying Naftzger’s relocation expenses associated with his move to Pennsylvania in connection with his employment by Unilife. The Relocation Payment will be paid in a lump sum to him on or before July 16, 2010. If Naftzger incurs actual, reasonable and customary relocation expenses during the first year of his employment that exceed $75,000 (for items such as closing costs relating to the sale of Naftzger’s current house, payment for moving Naftzger’s household goods to Pennsylvania, including packing, unpacking, and insurance, storage of Naftzger’s household goods for a maximum of six months while Naftzger and his family are in temporary housing, and the cost of moving up to two vehicles) (“Excess Relocation Expenses”), he may provide the Chief Executive Officer with documentation of such Excess Relocation Expenses, and the Chief Executive Officer may elect, in his discretion, to reimburse Naftzger for all or part of such Excess Relocation Expenses. In addition to the Relocation Payment and Excess Relocation Expenses, Unilife will reimburse Naftzger for the reasonable cost of temporary housing in Pennsylvania for up to six months and will reimburse Naftzger and for the reasonable expenses associated with two house-hunting trips by Naftzger and his spouse. Reimbursement of such costs and expenses will be made upon the request of Naftzger, subject to Naftzger’s providing reasonable documentation of the reimbursable costs and expenses.

(b) Any taxes payable with respect to the payments made by Unilife to Naftzger pursuant to this Section 9, including without limitation the Relocation Payment, shall be the sole responsibility of Naftzger, and Unilife will follow federal, state and local tax regulations with regard to the reporting of such payments. Unilife shall withhold applicable federal, state and local taxes using the percentage method for supplemental income (i.e., flat tax of 25% for federal income taxes and the applicable flat rate for FICA, state and local taxes).

10. General Release. As a condition of receiving the severance compensation and benefits described in Section 6, Unilife and Naftzger will execute a mutual general release of claims (which is in a form acceptable to Unilife). Such general release would not include rights to previously vested options or claims for any compensation earned (including, without limitation, accrued vacation), or reimbursement of expenses incurred, through the date of termination. Such release must be agreed to, executed and irrevocable no later than 30 days following Naftzger’s termination date.

11. Dispute Resolution. Any controversy, claim or dispute involving the parties (or their affiliated persons) directly or indirectly concerning this agreement shall be finally settled by binding arbitration held in Harrisburg, Pennsylvania by one arbitrator (who is mutually

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acceptable to both parties as well as licensed to practice law in the Commonwealth of Pennsylvania) in accordance with the rules of employment arbitration then followed by the American Arbitration Association or any successor to the functions thereof. The arbitrator shall apply Pennsylvania law in the resolution of all controversies, claims and disputes and shall have the right and authority to determine how his or her decision or determination as to each issue or matter in dispute may be implemented or enforced. Any decision or award of the arbitrator shall be final and conclusive for both Naftzger and Unilife (and its affiliates), and there shall be no appeal there from other than causes of appeal allowed by the Federal Arbitration Act. Unilife shall bear all costs of the arbitrator in any action brought under this agreement. The arbitrator shall have the power to award attorney’s fees and arbitration costs to the prevailing party, if the award of attorney’s fees and litigation costs would be permitted by a court. The parties hereto agree that any action to compel arbitration may be brought in the appropriate Pennsylvania state or federal court, and in connection with such action to compel, the laws of the Commonwealth of Pennsylvania and the Federal Arbitration Act shall control. Application may also be made to such court for confirmation of any decision or award of the arbitrator, for an order of the enforcement and for any other remedies, which may be necessary to effectuate such decision or award. The parties hereto hereby consent to the jurisdiction of the arbitrator and of such court and waive any objection to the jurisdiction of such arbitrator and court.

12. Non-waiver. A waiver of any provision of this agreement by either party shall not prevent either party from enforcing that provision or any other provision hereof.

13. Assignment. This agreement is personal and may not be assigned by Naftzger. Any assignment of this agreement between Unilife (or its successor) and its affiliates (and their successors) shall not constitute a termination of Naftzger’s employment hereunder. This agreement (including the Restrictive Covenants set forth in Sections 7 and 8) shall inure to the benefit of and be binding upon any successor to Unilife. The parties specifically understand and agree that the non-compete provisions of Section 8 will inure to the benefit of a successor and that Naftzger will remain bound by these provisions in the event of a sale or corporate reorganization of Unilife.

14. Severability. Each provision of this agreement is severable and distinct from, and independent of, every other provision hereof. If one provision hereof is declared void, the remaining provisions shall remain in effect. Any provision of this agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

15. Entire Agreement. This agreement contains the entire agreement of the parties concerning the employment relationship and supersedes any prior agreements or understandings between the parties concerning the terms and conditions of Naftzger’s employment, whether oral or written; provided, however, that Naftzger’s equity grants

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shall be governed by the equity grant documents; provided further, that any stock options or other stock-based awards provided to Naftzger shall be governed by Unilife’s stock incentive plans as they are amended from time to time, except as provided herein. The parties acknowledge, in entering into this agreement that they have not relied upon any promise or inducement not specifically set forth herein. Any changes to this agreement must be in writing and signed by both parties.

16. Section 409A.

     (a) This agreement is intended to comply with, or otherwise be exempt from, Code section 409A and any regulations and Treasury guidance promulgated thereunder, and Unilife shall be required to interpret the terms of this agreement as necessary to comply with the requirements of Code section 409A.

     (b) Unilife shall undertake to administer, interpret, and construe this agreement in a manner that does not result in the imposition on Naftzger of any additional tax, penalty, or interest under Code section 409A.

     (c) Unilife and Naftzger agree that they will execute any and all amendments to this agreement permitted under applicable law as they mutually agree in good faith may be necessary to ensure compliance with the distribution provisions of Code section 409A or as otherwise needed to ensure that this agreement complies with that section.

     (d) The preceding provisions, however, shall not be construed as a guarantee by Unilife of any particular tax effect to Naftzger under this agreement. Unilife shall not be liable to Naftzger for any payment made under this agreement that is determined to result in an additional tax, penalty, or interest under Code section 409A, nor for reporting in good faith any payment made under this agreement as an amount includible in gross income under that section.

     (e) For purposes of Code section 409A, the right to a series of installment payments under this agreement shall be treated as a right to a series of separate payments.

     (f) With respect to any reimbursement of future expenses of, or any provision of in-kind benefits to, Naftzger, as specified under this agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (i) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Code section 105(b); (ii) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or

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exchange for another benefit. Any tax gross-up payment shall be made by no later than the end of the calendar year following the year in which Naftzger remits the taxes.

     (g) “Termination of employment,” “resignation,” or words of similar import, as used in this agreement means, for purposes of any payments under this agreement that are payments of deferred compensation subject to Code section 409A, Naftzger’s “separation from service” as defined in that section.

     (h) If a payment obligation under this agreement arises on account of Naftzger’s separation from service while Naftzger is a “specified employee” (as defined under Code section 409A and determined in good faith by the Unilife), any payment of “deferred compensation” (as defined under Treasury regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury regulation sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six (6) months after such separation from service shall accrue without interest and shall be paid within 15 days after the end of the six-month period beginning on the date of such separation from service or, if earlier, within 15 days after the appointment of the personal representative or executor of Naftzger’s estate following his death.

17. Excise Tax on Parachute Payments. Naftzger shall bear all expense of, and be solely responsible for, all federal, state, local or foreign taxes due with respect to any payment received hereunder, including, without limitation, any excise tax imposed by Code section 4999; provided, however, that any payment or benefit received or to be received by Naftzger in connection with a Change in Control or the termination of Naftzger’s employment (whether payable pursuant to the terms of this Agreement (“Contract Payments”) or any other plan, arrangements or agreement with Unilife or any affiliate (collectively with the Contract Payments, the “Total Payments”) shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Code section 4999 but only if, by reason of such reduction, the net after-tax benefit received by Naftzger shall exceed the net after-tax benefit that would be received by Naftzger if no such reduction was made.

     For purposes of this Section 17, “net after-tax benefit” shall mean (i) the total of all payments and the value of all benefits which Naftzger receives or is then entitled to receive from Unilife that would constitute “excess parachute payments” within the meaning of Code section 280G, less (ii) the amount of all federal, state, local and foreign income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Naftzger (based on the rate in effect for such year as set forth in the Code or other applicable tax law as in effect at the time of the first payment of the foregoing), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described in (i) above by Code section 4999.

     The foregoing determination shall be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by Unilife and reasonably acceptable to Naftzger (which may be, but will not be required to be, Unilife’s independent auditors). The

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Accounting Firm shall submit its determination and detailed supporting calculations to both Naftzger and Unilife within fifteen (15) days after receipt of a notice from either Unilife or Naftzger that Naftzger may receive payments which may be “parachute payments.” If the Accounting Firm determines that a reduction is required by this Section 17, the Contract Payments consisting of cash severance shall be reduced to the extent necessary so that no portion of the Total Payments shall be subject to the excise tax imposed by Code section 4999, and Unilife shall pay such reduced amount to Naftzger in accordance with the terms of this agreement. If the Accounting Firm determines that none of the Total Payments, after taking into account any reduction required by this Section 17, constitutes a “parachute payment” within the meaning of Code section 280G, it will, at the same time as it makes such determination, furnish Naftzger and Unilife an opinion that Naftzger has substantial authority not to report any excise tax under Code section 4999 on his federal income tax return.

     Naftzger and Unilife shall each provide the Accounting Firm access to and copies of any books, records, and documents in the possession of Naftzger or Unilife, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Section 17. The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by this Section 17 shall be borne by Unilife.

18. Counterparts. This agreement may be executed on separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

19. Interpretation. The captions and headings of this agreement are not part of the provisions hereof and shall have no force or effect.

20. Notices. Any notices, requests, demands and other communications provided for by this agreement shall be sufficient if in writing and if hand delivered, sent by overnight courier, or sent by registered or certified mail to Naftzger at the last address he has filed in writing with Unilife or, in the case of Unilife, to Unilife’s Chief Executive Officer at Unilife’s principal executive offices.

21. Governing Law. The terms of this agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to provisions thereof regarding conflict of laws.

22. Continuing Legal Education and Bar Membership Reimbursement. Unilife agrees to reimburse Naftzger for all the costs associated with maintaining his license to practice law, including but not limited to licensing fees, bar membership fees, the cost of continuing legal education (and time off with pay to attend such seminars).

23. Naftzger represents and warrants to Unilife that he is not bound by any restrictive covenants and has no prior or other obligations or commitments of any kind that

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would in any way prevent, restrict, hinder or interfere with Naftzger’s acceptance of employment or the performance of all duties and services hereunder to the fullest extent of Naftzger’s ability and knowledge.

     IN WITNESS WHEREOF, and wishing to be legally bound, the parties have executed this agreement as of the date first above written.

UNILIFE CORPORATION:		J. Christopher Naftzger:
By:	/s/ Alan Shortall	/s/ J. Christopher Naftzger
	Name: Alan Shortall
	Title: Chief Executive Officer

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EX-10.46

Exhibit 10.46

EMPLOYMENT AGREEMENT

This employment agreement is made and entered into as of this 26 day of July, 2010, by and between Unilife Corporation (“Unilife”) and Dennis Pyers (“Pyers”). The term “Unilife” shall include its subsidiaries, affiliates, assigns and successors in interest under Sections 7, 8, and 13.

WHEREAS, Unilife wishes to employ Pyers as Vice President and Controller, and Pyers wishes to enter into this agreement to formalize his employment agreement; and

WHEREAS, Unilife is engaged in the business of designing, developing, manufacturing and supplying innovative healthcare safety products for medical device and pharmaceutical industries; and

WHEREAS, Pyers will develop valuable relationships by virtue of his employment with Unilife, and Pyers will have access to valuable confidential and proprietary information and trade secrets belonging to Unilife; and

WHEREAS, Unilife and Pyers desire to set forth the terms of their employment relationship in this agreement;

NOW, THEREFORE, in consideration of the promises and covenants set forth herein, and intending to be legally bound hereby, the parties agree as follows:

1. Term. This agreement shall be effective upon the counter-execution of this agreement and is for an initial multi-year term commencing on the effective date and expiring on June 30, 2012. This agreement will automatically renew for one-year periods annually thereafter, unless either party gives the other party thirty (30) days written notice in advance of the relevant expiration date of its intention not to renew the agreement. Upon expiration or earlier termination of this employment relationship, the parties will be relieved of their duties and obligations under this agreement, except that the rights and obligations of Unilife under Section 6 below shall remain in full force and effect until all appropriate payments have been made to Pyers and the rights and obligations of Pyers set forth in Sections 7 and 8 below shall remain in full force and effect and shall survive the expiration or termination of this agreement, regardless of the reason(s) for termination.

2. Position and Duties.

     (a) Unilife will employ Pyers as Vice President and Controller, and Pyers agrees to serve in such capacity for Unilife with responsibility for Unilife’s accounting department and such other duties as are assigned to him by the Chief Financial Officer of Unilife, and shall have vested in him the authority and duties typically held by an employee in such position. Pyers shall report to the Chief Financial Officer, with respect to the performance of these duties. In the performance of these duties, Pyers shall devote his knowledge, skill, attention, energies and all of his business time, and shall

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comply with all of Unilife’s policies, rules, and procedures, as they may be amended from time to time. Pyers shall not engage in any endeavor that would conflict with the rendition of his services to Unilife, either directly or indirectly, without the prior written consent of Unilife; provided, however, Pyers may participate in civic, charitable, educational, industry and professional organizations, to the extent that such participation does not interfere with the performance of his duties hereunder; and Pyers may also serve on corporate boards and committees, but only with the prior written consent of Unilife.

     (b) Notwithstanding the responsibilities and duties contained in Section 2(a) above, Pyers acknowledges that all material decisions relating to the management of Unilife’s business will be made by the Board of Directors of Unilife. In addition, any decisions which have the capacity to affect significantly the financial standing of Unilife must be referred to the Board of Directors of Unilife which will have ultimate control in respect of these matters.

3. Compensation.

     (a) Base Salary. Pyers shall be paid an annual base salary of One Hundred Eighty-Five Thousand Dollars ($185,000.00) payable in accordance with Unilife’s standard payroll practices. Pyers’ base salary will be subject to the customary withholding and employment taxes, as required by law, with respect to compensation paid by an employer to an employee. At the discretion of the Board of Directors of Unilife, Pyers shall be eligible for increases in base salary. Further, Unilife will not reduce Pyers’ base salary to less than what is agreed to herein.

     (b) Bonus. Pyers shall be eligible to participate in Unilife’s Incentive Bonus Plan in amounts and percentages as annually determined by Unilife’s Board of Directors and Chief Executive Officer. For calendar year 2010, the potential cash bonus amount will be twenty-five percent (25%) of base salary, prorated based on the number of days employed in 2010. For calendar years 2011 and 2012, Pyers’ annual target cash bonus shall be a minimum of twenty-five percent (25%) of base salary. Bonuses are subject to achievement of such goals and objectives as the Compensation Committee of the Board of Directors, upon recommendation of the Chief Executive Officer, determines in a set of Key Performance Indicators. Any bonus payable for a calendar year shall be paid in a lump-sum payment in the following calendar year on or before March 15. Pyers’ bonuses will be subject to the customary withholding and employment taxes, as required by law, with respect to compensation paid by an employer to an employee.

4. Benefits.

     (a) Benefits Generally Available to Unilife Employees. Pyers shall be eligible to participate in Unilife’s benefits programs (including any equity incentive plan of Unilife or its affiliates), as they may change from time to time. The benefits provided to Pyers will be the same as the benefits provided to other similarly situated Unilife employees, and may be changed upon expiration or other termination of the current benefits

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contracts. For further information, Pyers should review any applicable benefit plan documents, which will govern the terms of the benefits.

     (b) Vacation. Pyers shall also receive four (4) weeks of paid vacation per calendar year. Any unused vacation days may be carried over or paid in lieu thereof, to the extent allowed by Unilife’s policy for similarly situated employees.

     (c) Equity Plans. All incentive compensation and stock-based compensation that Pyers may receive from Unilife shall be subject to any policy adopted by Unilife, now or hereafter existing, that imposes on Pyers’ stock ownership requirements, stock holding requirements, stock liquidation restrictions or recoupment provisions provided that such requirements, restrictions and recoupment provisions also apply to similarly situated members of senior management. Any stock options and other stock-based awards that Pyers may receive from Unilife shall be governed by the applicable, underlying award agreement.

     (d) Expenses. Unilife shall reimburse Pyers for all reasonable and necessary expenses incurred by him in carrying out his duties under this Agreement in accordance with Unilife’s business expense policies, including without limitation, requirements with respect to reporting, documentation and payment of such expenses. All such expenses shall be paid no later than December 31^st of the calendar year following the year in which such expenses were incurred.

5. Indemnification. Unilife agrees to provide Pyers with indemnification equivalent to that provided to other members of senior management and pursuant to Unilife’s Directors and Officers insurance policies, as amended from time to time.

6. Termination and Pay Upon Termination.

     (a) General Rule. In the event that Unilife terminates this agreement and Pyers’ employment without Cause as defined herein, including employment termination due to Unilife’s election not to renew this agreement where Pyers was willing and able to continue performing services under the terms of this agreement, Unilife will pay Pyers:

     (i) his base salary, at the rate in effect immediately before the date that Pyers’ employment terminates, for six (6) months, in accordance with Unilife’s standard payroll practices then in effect, commencing on the fifteenth (15^th) day after the date that Pyers’ employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable; and

     (ii) provided that Pyers is eligible for and timely elects to receive COBRA health care continuation coverage, the cost of Pyers’ COBRA health care continuation coverage premiums for six (6) months, commencing on the first of the month immediately after the month which includes the date that Pyers’

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employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable.

In the event that Pyers terminates this agreement for any reason, including Pyers’ election not to renew the agreement, Pyers shall not receive any compensation or benefits from the time that he ceases to devote full time and attention to Unilife’s business. In addition, Pyers agrees to provide Unilife with thirty (30) days advance written notice of his intent to terminate his employment, whether during the initial term or any renewal thereof. Upon termination of this agreement, the parties will be relieved of their duties and obligations, except that the rights and obligations of Unilife under this Section 6(a) shall remain in full force and effect until all appropriate payments have been made to Pyers and the rights and obligations of Pyers set forth in Sections 7 and 8 below shall remain in full force and effect and shall survive the expiration or termination of this agreement, regardless of the reason(s) for termination. Upon termination of this agreement, Pyers shall not have any further contact with any customers of Unilife until the expiration of the conditions of Section 8 of this Agreement.

     (b) Termination Following a Change in Control.

     (i) Termination Pay. Notwithstanding paragraph (a) immediately above, in the event that Pyers’ employment is terminated coincident with a Change in Control as defined in subparagraph (iii) immediately below, then Unilife in lieu of and not in duplication of the severance compensation provided for in paragraph (a) immediately above, shall pay Pyers:

     (A) his base salary, at the rate in effect immediately before the date that Pyers’ employment terminates, for eighteen (18) months, in accordance with Unilife’s standard payroll practices then in effect, commencing on the fifteenth (15^th) day after the date that Pyers’ employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable,

     (B) provided that Pyers is eligible for and timely elects to receive COBRA health care continuation coverage, the cost of Pyers’ COBRA health care continuation coverage premiums for eighteen (18) months, commencing on with the first of the month immediately after the month which includes the date that Pyers’ employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable,

     (C) payment of a lump-sum amount, equal to the amount of the bonus, if any, earned by and paid to Pyers for the last completed fiscal year prior to the year in which his employment terminates, which will be payable on the fifteenth (15^th) day after the date that Pyers’ employment terminates and the General Release provided for in Section 10 of this Agreement becomes irrevocable, and

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     (D) notwithstanding anything to the contrary, all of his outstanding and unvested options and other stock-based awards shall vest immediately upon such termination of employment following the Change in Control.

     (ii) Definition of “Cause”. “Cause” will mean any one or more of the following:

     (A) material neglect of assigned duties, willful misconduct in connection with the performance of duties, or refusal to perform assigned duties (other than by reason of disability) which continues uncured for thirty (30) days following receipt of written notice of such deficiency from the Chief Financial Officer, specifying the scope and nature of the deficiency;

     (B) an act of dishonesty or any act that results in the loss of status as a Certified Public Accountant;

     (C) engaging in illegal conduct;

     (D) committing a crime relating to an act of dishonesty or fraud;

     (E) engaging in any act of moral turpitude that causes material harm to Unilife or its reputation;

     (F) breaching, in any material respect, the terms of any agreement with Unilife; or

     (G) commencement of employment with any other employer while an employee of Unilife without the prior written consent of the Chief Executive Officer.

Any determination of “Cause” as used herein will be made in good faith by the Chief Executive Officer.

     (iii) Definition of “Change in Control”. “Change in Control” means a: (i) Change in Ownership of Unilife Corporation, (ii) Change in Effective Control of Unilife Corporation, or (iii) Change in the Ownership of Assets of Unilife Corporation, all as described herein and construed in accordance with section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     (A) A Change in Ownership of Unilife Corporation shall occur on the date that any one Person acquires, or Persons Acting as a Group (or Group) acquire, ownership of the capital stock of Unilife Corporation that, together with the stock held by such Person or Group, constitutes more

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than fifty percent (50%) of the total fair market value or total voting power of the capital stock of Unilife Corporation. However, if any one Person is, or Persons Acting as a Group are, considered to own more than fifty percent (50%) of the total fair market value or total voting power of the capital stock of Unilife Corporation, the acquisition of additional stock by the same Person or Persons Acting as a Group is not considered to cause a Change in Ownership of Unilife Corporation or to cause a Change in Effective Control of Unilife Corporation. An increase in the percentage of capital stock owned by any one Person, or Persons Acting as a Group, as a result of a transaction in which Unilife Corporation acquires its stock in exchange for property will be treated as an acquisition of stock.

     (B) A Change in Effective Control of Unilife Corporation shall occur on the date a majority of members of the Board of Directors of Unilife Corporation is replaced during any twelve (12)-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors of Unilife Corporation before the date of the appointment or election.

     (C) A Change in the Ownership of Assets of Unilife Corporation shall occur on the date that any one Person acquires, or Persons Acting as a Group acquire (or has or have acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such Person or Persons), assets (including tangible/real property and intangible property (such as goodwill)) from Unilife Corporation the total gross fair market value of which is more than fifty percent (50%) of the total gross fair market value of all of the assets of Unilife Corporation immediately before such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of Unilife Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

     (D) The following rules of construction apply in interpreting the definition of Change in Control:

     (I) A Person means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than employee benefit plans sponsored or maintained by Unilife Corporation and by entities controlled by Unilife Corporation or an underwriter of the capital stock of Unilife Corporation in a registered public offering.

     (II) Persons will be considered to be Persons Acting as a Group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation. If a Person owns stock in both

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corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a Group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. Persons will not be considered to be acting as a Group solely because they purchase assets of the same corporation at the same time or purchase or own stock of the same corporation at the same time, or as a result of the same public offering.

     (III) For purposes of this Section 6(b), fair market value shall be determined in accordance with Code Section 409A.

     (IV) A Change in Control shall not include a transfer to a related person as described in Code section 409A or a public offering of capital stock of Unilife Corporation.

     (E) For purposes of this Section 6(b), Code section 318(a) applies to determine stock ownership. Stock underlying a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). For purposes of the preceding sentence, however, if a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulation §1.83-3(b) and (j), the stock underlying the option is not treated as owned by the individual who holds the option.

7. Confidential Information.

     (a) Pyers acknowledges that Unilife has a valuable property interest in all aspects of its business relationships with its customers, clients, vendors and suppliers. In the course of Pyers’ work with Unilife, Pyers has become aware of and familiar with secret and confidential information of Unilife relating to its customers, clients, vendors and suppliers, and its internal business operations. Secret and confidential information includes, but is not limited to, Unilife’s business plans, customer lists, customer data, marketing plans, supplier and vendor lists and cost information, software and computer programs, data processing systems and information contained therein, financial statements, financial data, acquisition and divestiture plans, and any other trade secrets or confidential or proprietary information, documents, reports, plans, or data, of or about Unilife that is not already available to the public.

     (b) Pyers agrees that he will not, without the written consent of Unilife, during the term of this agreement or thereafter, disclose or make any use of secret and confidential information, except as may be required in the performance of his duties under Section 2 of this agreement. Pyers agrees that, following the termination of his

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employment with Unilife for any reason, he will never use secret and confidential information to compete with Unilife in any manner, and he will never disclose any secret and confidential information to any other business or individual, unless such secret or confidential information is: (i) publicly known through no breach of the provisions of this Section 7 by either party, (ii) lawfully disclosed by a third party, or (iii) disclosed pursuant to legal requirement or court order. In no event shall any disclosure made to investment banking firms or private equity firms at the request of Unilife and as part of Pyers’ duties ever be considered a violation of this Section 7.

     (c) Upon termination of this agreement, Pyers shall surrender to Unilife all records and all paper and/or electronic copies made of those records that pertain to any aspect of the business of Unilife, including all secret and confidential information.

8. Agreement Not To Compete.

     (a) In consideration for continued employment by Unilife and the benefits of this agreement, Pyers agrees to be bound by the covenant not to compete as set forth in Section 8 of this agreement below.

     (b) Pyers agrees that during the term of this agreement and for a period of two (2) years following the termination of this agreement for any reason, he will not, directly or indirectly:

     (i) render services to, become employed by, be engaged as a consultant by, own, or have a financial or other interest in (either as an individual, partner, joint venture, owner, manager, employee, partner, officer, director, independent contractor, or other similar role) any business that is engaged in any business activity that is in competition with the activities of Unilife.

     (ii) induce, offer, assist, encourage, or suggest that another business or enterprise offer employment to or enter into a consulting arrangement with any individual who is employed by Unilife, or induce, offer, assist, encourage, or suggest that any Unilife employee terminate her or her employment with Unilife, or accept employment with any other business or enterprise.

     (c) In the event that Pyers commits any breach of Section 8(b) above, Pyers acknowledges that Unilife would suffer substantial and irreparable harm and damages. Accordingly, Pyers hereby agrees that in such event, Unilife shall be entitled to temporary and/or permanent injunctive relief, without the necessity of proving damage, to enforce the provisions of this Section, all without prejudice to any and all other remedies that Unilife may have at law or in equity and that Unilife may elect or invoke. Pyers agrees that if any of the provisions of this Section are or become unenforceable, the remainder hereof shall nevertheless remain binding upon him to the fullest extent possible, taking into consideration the purposes and spirit of this agreement. Any invalid or unenforceable provision is to be reformed to the maximum time, geographic

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and/or business limitations permitted by applicable laws, so as to be valid and enforceable.

     (d) Pyers expressly acknowledges and agrees that the restrictive covenants set forth in Sections 7 and 8 above are absolutely necessary to protect the legitimate business interests of Unilife, because he is employed in a position of trust and confidence and is provided with extensive access to Unilife’s most confidential and proprietary trade secrets, and has significant involvement in important business relationships, which constitute the goodwill of Unilife. Pyers further agrees and acknowledges that these restrictive covenants are reasonable, will not restrict him from earning a livelihood following the termination of employment, and are intended by the parties to be enforceable following termination of employment for any reason.

     (e) In the event that Unilife must bring legal action to enforce or seek a remedy for any breach of the provisions of Sections 7 or 8 of this agreement and Pyers is found by a court to have breached any of these provisions, Pyers agrees to reimburse Unilife for any and all expenses, including attorneys’ fees and court costs, incurred by it in enforcing the terms of these Sections of the agreement.

9. Continuing Education and Membership Reimbursement. Unilife agrees to reimburse Pyers for all the costs associated with maintaining his Certification as a Certified Public Accountant, including but not limited to licensing fees, membership fees, the cost of continuing education (and time off with pay to attend such seminars).

10. General Release. As a condition of receiving the severance compensation and benefits described in Section 6, Unilife and Pyers will execute a mutual general release of claims (which is in a form acceptable to Unilife). Such general release would not include rights to previously vested options or claims for any compensation earned (including, without limitation, accrued vacation), or reimbursement of expenses incurred, through the date of termination. Such release must be agreed to, executed and irrevocable no later than 30 days following Pyers’ termination date.

11. Dispute Resolution. Any controversy, claim or dispute involving the parties (or their affiliated persons) directly or indirectly concerning this agreement shall be finally settled by binding arbitration held in Harrisburg, Pennsylvania by one arbitrator (who is mutually acceptable to both parties, as well as licensed to practice law in the Commonwealth of Pennsylvania) in accordance with the rules of employment arbitration then followed by the American Arbitration Association or any successor to the functions thereof. The arbitrator shall apply Pennsylvania law in the resolution of all controversies, claims and disputes and shall have the right and authority to determine how his or her decision or determination as to each issue or matter in dispute may be implemented or enforced. Any decision or award of the arbitrator shall be final and conclusive for both Pyers and Unilife (and its affiliates), and there shall be no appeal there from other than causes of appeal allowed by the Federal Arbitration Act. Unilife shall bear all costs of the arbitrator in any action brought under this agreement. The arbitrator shall have the power to award attorney’s fees and arbitration costs to the prevailing party, if the award

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of attorney’s fees and litigation costs would be permitted by a court. The parties hereto agree that any action to compel arbitration may be brought in the appropriate Pennsylvania state or federal court, and in connection with such action to compel, the laws of the Commonwealth of Pennsylvania and the Federal Arbitration Act shall control. Application may also be made to such court for confirmation of any decision or award of the arbitrator, for an order of the enforcement and for any other remedies, which may be necessary to effectuate such decision or award. The parties hereto hereby consent to the jurisdiction of the arbitrator and of such court and waive any objection to the jurisdiction of such arbitrator and court.

12. Non-waiver. A waiver of any provision of this agreement by either party shall not prevent either party from enforcing that provision or any other provision hereof.

13. Assignment. This agreement is personal and may not be assigned by Pyers. Any assignment of this agreement between Unilife (or its successor) and its affiliates (and their successors) shall not constitute a termination of Pyers’ employment hereunder. This agreement (including the Restrictive Covenants set forth in Sections 7 and 8) shall inure to the benefit of and be binding upon any successor to Unilife. The parties specifically understand and agree that the non-compete provisions of Section 8 will inure to the benefit of a successor and that Pyers will remain bound by these provisions in the event of a sale or corporate reorganization of Unilife.

14. Severability. Each provision of this agreement is severable and distinct from, and independent of, every other provision hereof. If one provision hereof is declared void, the remaining provisions shall remain in effect. Any provision of this agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

15. Entire Agreement. This agreement contains the entire agreement of the parties concerning the employment relationship and supersedes any prior agreements or understandings between the parties concerning the terms and conditions of Pyers’ employment, whether oral or written; provided, however, that Pyers’ equity grants shall be governed by the equity grant documents and will be in such amounts as stated in Pyers’ offer letter dated July 14, 2010; provided further, that any stock options or other stock-based awards provided to Pyers shall be governed by Unilife’s stock incentive plans as they are amended from time to time, except as provided herein. The parties acknowledge, in entering into this agreement that they have not relied upon any promise or inducement not specifically set forth herein. Any changes to this agreement must be in writing and signed by both parties.

16. Section 409A.

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     (a) This agreement is intended to comply with, or otherwise be exempt from, Code section 409A and any regulations and Treasury guidance promulgated thereunder, and Unilife shall be required to interpret the terms of this agreement as necessary to comply with the requirements of Code section 409A.

     (b) Unilife shall undertake to administer, interpret, and construe this agreement in a manner that does not result in the imposition on Pyers of any additional tax, penalty, or interest under Code section 409A.

     (c) Unilife and Pyers agree that they will execute any and all amendments to this agreement permitted under applicable law as they mutually agree in good faith may be necessary to ensure compliance with the distribution provisions of Code section 409A or as otherwise needed to ensure that this agreement complies with that section.

     (d) The preceding provisions, however, shall not be construed as a guarantee by Unilife of any particular tax effect to Pyers under this agreement. Unilife shall not be liable to Pyers for any payment made under this agreement that is determined to result in an additional tax, penalty, or interest under Code section 409A, nor for reporting in good faith any payment made under this agreement as an amount includible in gross income under that section.

     (e) For purposes of Code section 409A, the right to a series of installment payments under this agreement shall be treated as a right to a series of separate payments.

     (f) With respect to any reimbursement of future expenses of, or any provision of in-kind benefits to, Pyers, as specified under this agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (i) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Code section 105(b); (ii) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. Any tax gross-up payment shall be made by no later than the end of the calendar year following the year in which Pyers remits the taxes.

     (g) “Termination of employment,” “resignation,” or words of similar import, as used in this agreement means, for purposes of any payments under this agreement that are payments of deferred compensation subject to Code section 409A, Pyers’ “separation from service” as defined in that section.

     (h) If a payment obligation under this agreement arises on account of Pyers’ separation from service while Pyers is a “specified employee” (as defined under Code

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section 409A and determined in good faith by the Unilife), any payment of “deferred compensation” (as defined under Treasury regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury regulation sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six (6) months after such separation from service shall accrue without interest and shall be paid within 15 days after the end of the six-month period beginning on the date of such separation from service or, if earlier, within 15 days after the appointment of the personal representative or executor of Pyers’ estate following his death.

17. Excise Tax on Parachute Payments. Pyers shall bear all expense of, and be solely responsible for, all federal, state, local or foreign taxes due with respect to any payment received hereunder, including, without limitation, any excise tax imposed by Code section 4999; provided, however, that any payment or benefit received or to be received by Pyers in connection with a Change in Control or the termination of Pyers’ employment (whether payable pursuant to the terms of this Agreement (“Contract Payments”) or any other plan, arrangements or agreement with Unilife or any affiliate (collectively with the Contract Payments, the “Total Payments”) shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Code section 4999 but only if, by reason of such reduction, the net after-tax benefit received by Pyers shall exceed the net after-tax benefit that would be received by Pyers if no such reduction was made.

     For purposes of this Section 17, “net after-tax benefit” shall mean (i) the total of all payments and the value of all benefits which Pyers receives or is then entitled to receive from Unilife that would constitute “excess parachute payments” within the meaning of Code section 280G, less (ii) the amount of all federal, state, local and foreign income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Pyers (based on the rate in effect for such year as set forth in the Code or other applicable tax law as in effect at the time of the first payment of the foregoing), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described in (i) above by Code section 4999.

     The foregoing determination shall be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by Unilife and reasonably acceptable to Pyers (which may be, but will not be required to be, Unilife’s independent auditors). The Accounting Firm shall submit its determination and detailed supporting calculations to both Pyers and Unilife within fifteen (15) days after receipt of a notice from either Unilife or Pyers that Pyers may receive payments which may be “parachute payments.” If the Accounting Firm determines that a reduction is required by this Section 17, the Contract Payments consisting of cash severance shall be reduced to the extent necessary so that no portion of the Total Payments shall be subject to the excise tax imposed by Code section 4999, and Unilife shall pay such reduced amount to Pyers in accordance with the terms of this agreement. If the Accounting Firm determines that none of the Total Payments, after taking into account any reduction required by this Section 17, constitutes a “parachute payment” within the meaning of Code section 280G, it will, at

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the same time as it makes such determination, furnish Pyers and Unilife an opinion that Pyers has substantial authority not to report any excise tax under Code section 4999 on his federal income tax return.

     Pyers and Unilife shall each provide the Accounting Firm access to and copies of any books, records, and documents in the possession of Pyers or Unilife, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Section 17. The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by this Section 17 shall be borne by Unilife.

18. Counterparts. This agreement may be executed on separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

19. Interpretation. The captions and headings of this agreement are not part of the provisions hereof and shall have no force or effect.

20. Notices. Any notices, requests, demands and other communications provided for by this agreement shall be sufficient if in writing and if hand delivered, sent by overnight courier, or sent by registered or certified mail to Pyers at the last address he has filed in writing with Unilife or, in the case of Unilife, to Unilife’s Chief Financial Officer at Unilife’s principal executive offices.

21. Governing Law. The terms of this agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to provisions thereof regarding conflict of laws.

22. Representation. Pyers represents and warrants to Unilife that he is not bound by any restrictive covenants and has no prior or other obligations or commitments of any kind that would in any way prevent, restrict, hinder or interfere with Pyers’ acceptance of employment or the performance of all duties and services hereunder to the fullest extent of Pyers’ ability and knowledge.

     IN WITNESS WHEREOF, and wishing to be legally bound, the parties have executed this agreement as of the date first above written.

UNILIFE CORPORATION:		Dennis Pyers:
By: Name:	/s/ Alan Shortall Alan Shortall	/s/ Dennis P. Pyers
Title:	Chief Executive Officer

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EX-10.47

Exhibit 10.47

NON-REVOLVING CREDIT AND SECURITY AGREEMENT

THIS NON-REVOLVING CREDIT AND SECURITY AGREEMENT (the “Agreement”), dated as of August 13, 2010, is by and between UNILIFE CROSS FARM LLC, a Pennsylvania limited liability company (“Borrower”), and UNIVEST NATIONAL BANK AND TRUST CO. (“Bank”);

NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants herein contained, and to induce Bank to extend credit to Borrower, the parties hereby agree as follows:

1. Definitions. Capitalized terms that are not otherwise defined herein shall have the meanings set forth in Exhibit 1 hereto.

2. The Loan.

2.1. Non-Revolving Loan. Bank agrees, on the terms and conditions set forth in this Agreement, to make Advances to Borrower from time to time during the Credit Period in amounts such that the aggregate principal amount of Advances at any one time outstanding will not exceed the lesser of (i) the Maximum Loan Amount or (ii) the Borrowing Base (the “Loan”). Within the foregoing limit, Borrower may borrow and prepay Advances at any time during the Credit Period. Amounts may not be reborrowed once prepaid.

2.2. Note. The Loan shall be evidenced by a non-revolving promissory note in the face amount of Seven Million Dollars ($7,000,000.00) of even date herewith (the “Note”) and shall be payable in accordance with the terms of the Note and this Agreement. Notwithstanding anything contained herein or in the Note to the contrary, the principal amount outstanding under the Note shall not exceed an aggregate amount equal to the Maximum Loan Amount.

2.3. Intentionally Omitted.

2.4. Advances.

(a) Each request for an Advance shall be made on telephonic notice or written request from the Borrower to the Bank no later than 2:00 P.M. (local time in Philadelphia, Pennsylvania) on the date of the requested Advance. Bank’s acceptance of such a request shall be indicated by its making the Advance requested. Such an Advance shall be made available to Borrower in immediately available funds at Bank’s address referred to in Section 10.4.

(b) Notwithstanding the foregoing, Bank may, in its sole and absolute discretion, make or permit to remain outstanding Advances under the Loan in excess of the original principal amount of the Note, and all such amounts shall (i) be part of the Indebtedness evidenced by the Note, (ii) bear interest as provided herein, (iii) be payable upon demand by Bank, and (iv) be entitled to all rights and security as provided under the Loan Documents.

2.5. Repayment of Loan.

(a) Borrower shall make monthly payments of all interest accrued on the Loan as provided in the Note. The Loan shall mature, and the principal amount thereof and all unpaid interest, fees, expenses and other amounts payable under the Loan Documents shall be due and payable as provided in the Note.

(b) Bank may make Advances to Borrower (whether or not in excess of the lesser of the Maximum Loan Amount and the Borrowing Base) and apply such amounts to the payment of interest, fees, expenses and other amounts to which Bank may be entitled from time to time and Bank is hereby irrevocably authorized to do so without the consent of Borrower.

(c) Borrower shall make each payment of principal of and interest on the Loan and fees hereunder not later than 12:00 noon (local time Philadelphia, PA) on the date when due, without set off, counterclaim or other deduction, in immediately available funds to Bank at its address referred to in Section 10.4. Whenever any payment of principal of, or interest on, the Loan or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.

(d) To the extent that the aggregate amount of all Advances exceeds the lesser of the Maximum Loan Amount or the Borrowing Base, the amount of such excess will be paid immediately to Bank upon Bank’s demand.

2.6. Overdue Amounts. Any payments not made as and when due shall bear interest from the date due until paid at the Default Rate, in Bank’s discretion. In addition, in the event any payments are fifteen (15) days or more beyond their due date, Borrower shall pay Bank a “late charge” equal to $500.00 or five percent (5.00%) of the amount due on the due date, whichever is less.

2.7. Calculation of Interest. All interest under the Note or hereunder shall be calculated on the basis of the Actual/360 Computation, as defined in the Note.

2.8 Sales Tax. Borrower shall notify Bank if any Account includes any sales or other similar tax and Bank may, but shall not be obligated to, remit any such taxes directly to the taxing authority and make Advances therefor. In no event shall Bank be liable for any such taxes.

2.9 Fees. Borrower shall remit to Bank a commitment fee of Seventy Thousand Dollars ($70,000.00) on the date hereof.

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2.10 Statement of Account. If Bank provides Borrower with a statement of account on a periodic basis, such statement will be presumed complete and accurate and will be definitive and binding on Borrower, unless objected to with specificity by Borrower in writing within forty-five (45) days after receipt.

3. Conditions Precedent to Borrowing. Prior to any Advance, the following conditions shall have been satisfied, in the sole opinion of Bank and its counsel:

3.1. Conditions Precedent to Initial Advance. In addition to any other requirement set forth in this Agreement, Bank will not make the initial Advance under the Loan unless and until the following conditions shall have been satisfied:

(a) Loan Documents. Borrower and each other party to any Loan Document, as applicable, shall have executed and delivered this Agreement, the Note, and other required Loan Documents, all in form and substance satisfactory to Bank.

(b) Supporting Documents. Borrower shall cause to be delivered to Bank the following documents:

(i) A copy of the governing instruments of Borrower and the Surety, and a good standing certificate of Borrower the Surety, certified by the appropriate official of its state of incorporation and the State of Pennsylvania, if different;

(ii) Certified resolutions of the board of directors (or other appropriate Persons) of Borrower and each other Person executing any Loan Documents, including, without limitation, the Surety, signed by the Secretary or another authorized officer of Borrower or such other Person, including, without limitation, the Surety, authorizing the execution, delivery and performance of the Loan Documents;

(iii) Satisfactory evidence of payment of all fees due and reimbursement of all costs incurred by Bank, and evidence of payment to other parties of all fees or costs which Borrower is required under this Agreement to pay by the date of the initial Advance;

(iv) UCC searches and other Lien searches showing no existing security interests in or Liens on the Collateral.

(c) Reserve Account. The Reserve Account, as defined in the Security and Control Agreement Regarding Reserve Account executed by the Surety in favor of the Bank of even date herewith, shall have been established and funded in a manner acceptable to the Bank.

(d) Perfection of Liens. UCC-1 financing statements and, if applicable, certificates of title covering the Collateral shall duly have been recorded or filed in the manner and places required by law to establish, preserve, protect and perfect the interests and rights created or intended to be created by the Security Agreement; and all taxes, fees and other charges in connection with the execution, delivery and filing of the Security Agreement and the financing statements shall duly have been paid.

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(e) Additional Documents. Borrower shall have delivered to Bank all additional opinions, documents, certificates and other assurances that Bank or its counsel may require.

(f) Payment of Fees. Borrower shall have paid all fees, costs and expenses as required by the Loan Documents in connection with the Closing.

3.2. Conditions Precedent to Each Advance. The following conditions, in addition to any other requirements set forth in this Agreement, shall have been met or performed by the Advance Date with respect to any Advance Request and each Advance Request (whether or not a written Advance Request is required) shall be deemed to be a representation that all such conditions have been satisfied:

(a) Advance Request. Borrower shall have delivered to Bank an Advance Request and other information, as required under Section 2.4(a).

(b) No Default. No Default shall have occurred and be continuing or could occur upon the making of the Advance in question and, if Borrower is required to deliver a written Advance Request, Borrower shall have delivered to Bank an officer’s certificate to such effect, which may be incorporated in the Advance Request.

(c) Correctness of Representations. All representations and warranties made by Borrower and any Surety herein or otherwise in writing in connection herewith shall be true and correct in all material respects with the same effect as though the representations and warranties had been made on and as of the proposed Advance Date, and, if Borrower is required to deliver a written Advance Request, Borrower shall have delivered to Bank an officer’s certificate to such effect, which may be incorporated in the Advance Request.

(d) No Adverse Change. There shall have been no change which could have a Material Adverse Effect on the condition, financial or otherwise, of Borrower, any Subsidiary or any Surety from such condition as it existed on the date of the most recent financial statements of such Person delivered prior to date hereof.

(e) Limitations Not Exceeded. The proposed Advance shall not cause the outstanding principal balance of the Loan to exceed the lesser of the Maximum Loan Amount or the Borrowing Base.

(f) No Termination. Bank shall not have received notice from any Surety or any surety terminating or repudiating such Person’s guaranty of the Indebtedness incurred by Borrower.

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(g) Further Assurances. Borrower shall have delivered such further documentation or assurances as Bank may reasonably require.

4. Representations and Warranties. In order to induce Bank to enter into this Agreement and to make the Loan provided for herein, Borrower makes the following representations and warranties, all of which shall survive the execution and delivery of the Loan Documents. Unless otherwise specified, such representations and warranties shall be deemed made as of the date hereof and as of the Advance Date of any Advance by Bank to Borrower:

4.1. Valid Existence and Power. Each of Borrower and the Surety is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is duly qualified or licensed to transact business in all places where the failure to be so qualified would have a Material Adverse Effect on it. Each of Borrower and each other Person which is a party to any Loan Document (other than Bank) has the power to make and perform the Loan Documents executed by it and all such instruments will constitute the legal, valid and binding obligations of such Person, enforceable in accordance with their respective terms, subject only to bankruptcy and similar laws affecting creditors’ rights generally.

4.2. Authority. The execution, delivery and performance thereof by Borrower and each other Person (other than Bank) executing any Loan Document have been duly authorized by all necessary action of such Person, and do not and will not violate any provision of law or regulation, or any writ, order or decree of any court or governmental or regulatory authority or agency or any provision of the governing instruments of such Person, and do not and will not, with the passage of time or the giving of notice, result in a breach of, or constitute a default or require any consent under, or result in the creation of any Lien upon any property or assets of such Person pursuant to, any law, regulation, instrument or agreement to which any such Person is a party or by which any such Person or its respective properties may be subject, bound or affected.

4.3. Financial Condition. Other than as disclosed in financial statements delivered on or prior to the date hereof to Bank, neither Borrower nor any Subsidiary nor (to the knowledge of Borrower) any Surety has any direct or contingent obligations or liabilities (including any guarantees or leases) or any material unrealized or anticipated losses from any commitments of such Person. All such financial statements have been prepared in accordance with GAAP and fairly present the financial condition of Borrower, Subsidiary or Surety, as the case may be, as of the date thereof. Borrower is not aware of any material adverse fact (other than facts which are generally available to the public and not particular to Borrower, such as general economic or industry trends) concerning the conditions or future prospects of Borrower or any Subsidiary or any Surety which has not been fully disclosed to Bank, including any adverse change in the operations or financial condition of such Person since the date of the most recent financial statements delivered to Bank. Each of Borrower and the Surety is Solvent, and after consummation of the transactions set forth in this Agreement and the other Loan documents, Borrower and the Surety will be Solvent.

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4.4. Litigation. There are no suits or proceedings pending, or to the knowledge of Borrower threatened, before any court or by or before any governmental or regulatory authority, commission, bureau or agency or public regulatory body against or affecting Borrower, any Subsidiary or any Surety, or their assets, which if adversely determined would have a Material Adverse Effect on the financial condition or business of Borrower, such Subsidiary or such Surety.

4.5. Agreements, Etc. Neither Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any court order, governmental decree or any charter or other corporate restriction, adversely affecting its business, assets, operations or condition (financial or otherwise), nor is any such Person in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party, or any law, regulation, decree, order or the like.

4.6. Authorizations. All authorizations, consents, approvals and licenses required under applicable law or regulation for the ownership or operation of the property owned or operated by Borrower or any Subsidiary or for the conduct of any business in which it is engaged have been duly issued and are in full force and effect, and it is not in default, nor has any event occurred which with the passage of time or the giving of notice, or both, would constitute a default, under any of the terms or provisions of any part thereof, or under any order, decree, ruling, regulation, closing agreement or other decision or instrument of any governmental commission, bureau or other administrative agency or public regulatory body having jurisdiction over such Person, which default would have a material adverse effect on such Person. Except as noted herein, no approval, consent or authorization of, or filing or registration with, any governmental commission, bureau or other regulatory authority or agency is required with respect to the execution, delivery or performance of any Loan Document.

4.7. Intentionally Omitted.

4.8. Collateral. The security interests granted to Bank herein and pursuant to any other Security Agreement (a) constitute and, as to subsequently acquired property included in the Collateral covered by the Security Agreement, will constitute, security interests under the Code entitled to all of the rights, benefits and priorities provided by the Code and (b) are, and as to such subsequently acquired Collateral will be, fully perfected, superior and prior to the rights of all third persons, now existing or hereafter arising.

4.9. Taxes. Borrower, Surety and each Subsidiary have filed all federal and state income and other tax returns which are required to be filed, and have paid all taxes as shown on said returns and all taxes, including withholding, FICA and ad valorem taxes, shown on all assessments received by it to the extent that such taxes have become due. None of Borrower, Surety, nor any Subsidiary is subject to any federal, state or local tax Liens nor has such Person received any notice of deficiency or other official notice to pay any taxes. Borrower, Surety and each Subsidiary have paid all sales and excise taxes payable by it.

4.10. Intentionally Omitted.

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4.11. Intentionally Omitted.

4.12. Judgment Liens. Neither Borrower, nor Surety, nor any Subsidiary, nor any of their assets, are subject to any unpaid judgments (whether or not stayed) or any judgment liens in any jurisdiction.

4.13. Subsidiaries. Borrower has provided Bank with a list of its Subsidiaries.

4.14. Intentionally Omitted.

4.15. Intentionally Omitted.

4.16. Investment Company Act. Neither Borrower nor any Subsidiary is an “investment company” as defined in the Investment Company Act of 1940, as amended.

4.17. Insider. Borrower is not, and no Person having “control” (as that term is defined in 12 U.S.C.. 375(b)(5) or in regulations promulgated pursuant thereto) of Borrower is, an “executive officer,” “director,” or “principal shareholder” (as those terms are defined in 12 U.S.C.. 375(b) or in regulations promulgated pursuant thereto) of Bank, of a bank holding company of which Bank is a subsidiary, or of any subsidiary of a bank holding company of which Bank is a subsidiary.

4.18. Compliance with Covenants; No Default. Borrower is, and upon funding of the Loan will be, in compliance with all of the covenants hereof. No Default has occurred, and the execution, delivery and performance of the Loan Documents and the funding of the Loan will not cause a Default.

4.19. Full Disclosure. There is no material fact which is known or which should be known by Borrower that Borrower has not disclosed to Bank which could have a Material Adverse Effect. No Loan Document, nor any agreement, document, certificate or statement delivered by Borrower to Bank, contains any untrue statement of a material fact or omits to state any material fact which is known or which should be known by Borrower necessary to keep the other statements from being misleading.

5. Affirmative Covenants of Borrower. Borrower covenants and agrees that from the date hereof and until payment in full of the Indebtedness and the formal termination of this Agreement, Borrower, Surety and each Subsidiary:

5.1. Use of Loan Proceeds. Shall use the proceeds of the Loan only to provide interim funding for construction at its new global headquarters in York, Pennsylvania, and shall furnish Bank all evidence that it may reasonably require with respect to such use.

5.2. Intentionally Omitted.

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5.3. Insurance. Shall maintain such liability insurance, workers’ compensation insurance, business interruption insurance and casualty insurance as may be required by law.

5.4. Notice of Default. Shall provide to Bank immediate notice of (a) the occurrence of a Default and what action (if any) Borrower is taking to correct the same, (b) any material litigation or material changes in existing litigation or any judgment against it or its assets, or Surety or Surety’s assets, (c) any material damage or loss to property, and (d) any notice from taxing authorities as to claimed deficiencies or any tax lien with respect to Borrower or Surety.

5.5. Intentionally Omitted.

5.6. Additional Information. Shall furnish to Bank the following periodic information:

(a) No Default Certificates. Together with each request for an Advance, a certificate of an authorized officer of Borrower that no Default or event of default then exists or if a Default or event of default exists, the nature and duration thereof and Borrower’s intention with respect thereto; and

(b) Other Information. Such other information reasonably requested by Bank from time to time concerning the business, properties or financial condition of Borrower, Surety and any Subsidiaries.

5.7. Maintenance of Existence and Rights. Shall preserve and maintain its corporate existence, authorities to transact business, rights and franchises, trade names, patents, trademarks and permits necessary to the conduct of its business.

5.8. Payment of Taxes, Etc. Shall pay before delinquent all of its debts and taxes, except that Bank shall not unreasonably withhold its consent to nonpayment of taxes being actively contested in accordance with law (provided that Bank may require bonding or other assurances).

5.9. Further Assurances. Shall take such further action and provide to Bank such further assurances as may be reasonably requested to ensure compliance with the intent of this Agreement and the other Loan Documents.

6. Negative Covenants of Borrower. Borrower covenants and agrees that from the date hereof and until payment in full of the Indebtedness and the formal termination of this Agreement, Borrower and each Subsidiary:

6.1. No Change in Name, Offices. Shall not, unless it shall have given 60 days’ advance written notice thereof to Bank, change its name or the location of its chief executive office or other office where books or records are kept.

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6.2. Margin Stock. Shall not use any proceeds of the Loan to purchase or carry any margin stock (within the meaning of Regulation U of the Board of Governors of Federal Reserve System) or extend credit to others for the purpose of purchasing or carrying any margin stock.

6.3. Change of Trade or Fictitious Name. Shall give Bank thirty (30) days prior written notice of any new trade or fictitious name. Borrower’s use of any trade or fictitious name shall be in compliance with all laws regarding the use of such names.

6.4. Liquidation, Mergers, Consolidations and Dispositions of Substantial Assets. Shall not dissolve or liquidate, or become a party to any merger or consolidation, or acquire by purchase, lease or otherwise, all or a substantial part (more than 10% in the aggregate during the term hereof) of the assets of any Person, or sell, transfer, lease or otherwise dispose of all or a substantial part (more than 10% in the aggregate during the term hereof) of its property or assets, or sell or dispose of any equity ownership interests in any Subsidiary.

7. Intentionally Omitted.

8. Default.

8.1. Events of Default. Each of the following shall constitute an Event of Default:

(a) There shall occur any default by Borrower in the payment, when due, of any principal of or interest on the Note, any amounts due hereunder or any other Loan Document, or any other Indebtedness; or

(b) There shall occur any default by Borrower or any other party to any Loan Document or other loan document or agreement between Borrower or any Surety and the Bank (other than Bank) in the performance of any agreement, covenant or obligation contained in this Agreement or such Loan Document or other document or agreement not provided for elsewhere in this Section 8; or

(c) Any representation or warranty made by Borrower or any other party to any Loan Document (other than Bank) herein or therein or in any certificate or report furnished in connection herewith or therewith shall prove to have been untrue or incorrect in any material respect when made; or

(d) Any other obligation now or hereafter owed by Borrower or any Subsidiary or Surety to Bank shall be in default and not cured within the grace period, if any, which default entitles the obligee to accelerate any such obligations or exercise other remedies with respect thereto; or

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(e) Borrower or any Subsidiary or Surety shall (A) voluntarily dissolve, liquidate or terminate operations or apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of such Person or of all or of a substantial part of its assets, (B) admit in writing its inability, or be generally unable, to pay its debts as the debts become due, (C) make a general assignment for the benefit of its creditors, (D) commence a voluntary case under the federal Bankruptcy Code (as now or hereafter in effect), (E) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, (F) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under Bankruptcy Code, or (G) take any corporate action for the purpose of effecting any of the foregoing; or

(f) An involuntary petition or complaint shall be filed against Borrower or any Subsidiary or any Surety seeking bankruptcy relief or reorganization or the appointment of a receiver, custodian, trustee, intervenor or liquidator of Borrower or any Subsidiary or any Surety, of all or substantially all of its assets, and such petition or complaint shall not have been dismissed within sixty (60) days of the filing thereof; or an order, order for relief, judgment or decree shall be entered by any court of competent jurisdiction or other competent authority approving or ordering any of the foregoing actions; or

(g) A judgment in excess of $10,000 shall be rendered against the Borrower or any Subsidiary or Surety and shall remain undischarged, undismissed and unstayed for more than ten days (except judgments validly covered by insurance with a deductible of not more than $10,000) or there shall occur any levy upon, or attachment, garnishment or other seizure of, any material portion of the Collateral or other assets of Borrower, any Subsidiary or any Surety by reason of the issuance of any tax levy, judicial attachment or garnishment or levy of execution; or

(h) Borrower, any Subsidiary or any Surety shall fail to pay, on demand, any returned or dishonored draft, check, or other item which has been presented to Bank and for which Borrower has received provisional credit; or

(i) Any Surety shall repudiate or revoke any Surety Agreement; or

(j) The making of any levy, seizure or attachment upon any assets of the Borrower or Surety; or

(k) There shall occur any change in the condition (financial or otherwise) of Borrower and/or any Surety which, in the reasonable opinion of Bank, could have a Material Adverse Effect.

8.2. Remedies. If any Default shall occur, Bank may, without notice to Borrower, at its option, withhold further Advances to Borrower. If an Event of Default shall have occurred and be continuing, Bank may at its option, declare any or all Indebtedness to be immediately due and payable (if not earlier demanded), terminate its obligation to make Advances to Borrower, bring suit against Borrower to collect the Indebtedness, exercise any remedy available to Bank hereunder or at law and take any action or exercise any remedy provided herein or in any other Loan Document or under applicable law. No remedy shall be exclusive of other remedies or impair the right of Bank to exercise any other remedies.

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8.3. Receiver. In addition to any other remedy available to it, Bank shall have the absolute right, upon the occurrence of an Event of Default, to seek and obtain the appointment of a receiver to take possession of and operate and/or dispose of the business and assets of Borrower and any costs and expenses incurred by Bank in connection with such receivership shall bear interest at the Default Rate, at Bank’s option.

8.4 Deposits; Insurance. After the occurrence of an Event of Default, Borrower authorizes Bank to collect and apply against the Indebtedness when due any cash or deposit accounts in its possession, and irrevocably appoints Bank as its attorney-in-fact to endorse any check or draft or take other action necessary to obtain such funds.

9. Intentionally Omitted.

10. Miscellaneous.

10.1. No Waiver, Remedies Cumulative. No failure on the part of Bank to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and are in addition to any other remedies provided by law, any Loan Document or otherwise.

10.2. Survival of Representations. All representations and warranties made herein shall survive the making of the Loan hereunder and the delivery of the Note, and shall continue in full force and effect so long as any Indebtedness is outstanding, there exists any commitment by Bank to Borrower, and until this Agreement is formally terminated in writing.

10.3. Indemnity By Borrower; Expenses. In addition to all other Indebtedness, Borrower agrees to defend, protect, indemnify and hold harmless Bank and its Affiliates and all of their respective officers, directors, employees, attorneys, consultants and agents from and against any and all losses, damages, liabilities, obligations, penalties, fees, costs and expenses (including, without limitation, attorneys’ and paralegals’ fees, costs and expenses) incurred by such indemnitees, whether prior to or from and after the date hereof, as a result of or arising from or relating to (i) the due diligence effort (including, without limitation, public record search, recording fees, examinations and investigations of the properties of Borrower and Borrower’s operations), negotiation, preparation, execution and/or performance of any of the Loan Documents or of any document executed in connection with the transactions contemplated thereby, maintenance of the Loan by Bank, and any and all amendments, modifications, and supplements of any of the Loan Documents or restructuring of the Indebtedness, (ii) any suit, investigation, action or proceeding by any Person (other than Borrower), whether threatened or initiated, asserting a claim for any legal or

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equitable remedy against any Person under any statute, regulation or common law principle, arising from or in connection with Bank’s furnishing of funds to Borrower under this Agreement, (iii) Bank’s preservation, administration and enforcement of its rights under the Loan Documents and applicable law, including fifteen percent (15%) of the outstanding Indebtedness as attorneys fees if collected by or through an attorney at law and disbursements of counsel for Bank in connection therewith, whether suit be brought or not and whether incurred at trial or on appeal; and/or (iv) any matter relating to the financing transactions contemplated by the Loan Documents or by any document execution in connection with the transactions contemplated thereby, other than for such loss, damage, liability, obligation, penalty, fee, cost or expense arising from such indemnitee’s gross negligence or willful misconduct. In addition, Borrower agrees to pay and save Bank harmless against any liability for payment of any state documentary stamp taxes, intangible taxes or similar taxes (including interest or penalties, if any) which may now or hereafter be determined to be payable in respect to the execution, delivery or recording of any Loan Document or the making of any Advance, whether originally thought to be due or not, and regardless of any mistake of fact or law on the part of Bank or Borrower with respect to the applicability of such tax. Borrower’s obligation for indemnification for all of the foregoing losses, damages, liabilities, obligations, penalties, fees, costs and expenses of Bank shall be part of the Indebtedness, chargeable against Borrower’s loan account, and shall survive termination of this Agreement.

10.4. Notices. Any notice or other communication hereunder under the Note to any party hereto or thereto shall be by hand delivery, overnight delivery, facsimile, telegram, telex or registered or certified mail and unless otherwise provided herein shall be deemed to have been given or made when delivered, telegraphed, telexed, faxed or three (3) Business Days after having been deposited in the mails, postage prepaid, addressed to the party at its address specified below (or at any other address that the party may hereafter specify to the other parties in writing):

Bank:	Univest National Bank and Trust Co.
	14 N. Main Street
	P.O. Box 64197
	Souderton, PA 18964-0197
	Attn: William D. Maeglin, Executive Vice President

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with a copy to:
	Fox Rothschild LLP
	10 Sentry Parkway, suite 200
	P.O. Box 3001
	Blue Bell, PA 19422-3001
	Attn: Marc B. Davis, Esquire
Borrower:	Unilife Cross Farm LLC
	637 Lowther Road
	Lewisberry, PA 17339
	Attn: Chief Financial Officer

10.5. Governing Law. This Agreement and the Loan Documents shall be deemed contracts made under the laws of the Commonwealth of Pennsylvania and shall be governed by and construed in accordance with the laws of said state (excluding its conflict of laws provisions if such provisions would require application of the laws of another jurisdiction).

10.6. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of Borrower and Bank, and their respective successors and assigns; provided, that Borrower may not assign any of its rights hereunder without the prior written consent of Bank, and any such assignment made without such consent will be void.

10.7. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which when taken together shall constitute but one and the same instrument.

10.8. No Usury. Regardless of any other provision of this Agreement, the Note or in any other Loan Document, if for any reason the effective interest should exceed the maximum lawful interest, the effective interest shall be deemed reduced to, and shall be, such maximum lawful interest, and (i) the amount which would be excessive interest shall be deemed applied to the reduction of the principal balance of the Note and not to the payment of interest, and (ii) if the loan evidenced by the Note has been or is thereby paid in full, the excess shall be returned to the party paying same, such application to the principal balance of the Note or the refunding of excess to be a complete settlement and acquittance thereof.

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10.9. Powers. All powers of attorney granted to Bank are coupled with an interest and are irrevocable.

10.10. Approvals. If this Agreement calls for the approval or consent of Bank, such approval or consent may be given or withheld in the discretion of Bank unless otherwise specified herein.

10.11. Litigation. BORROWER CONSENTS TO THE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA AND THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA IN CONNECTION WITH ANY CLAIM OR DISPUTE ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. IF ANY ACTION IN CONNECTION WITH ANY SUCH CLAIM IS COMMENCED BY THE BANK AGAINST THE BORROWER IN ANY SUCH COURT, THE BORROWER ALSO AGREES THAT SERVICE OR PROCESS MAY BE MADE ON THE BORROWER BY CERTIFIED OR REGISTERED MAIL ADDRESSED TO THE BORROWER AT ITS ADDRESS SPECIFIED IN SECTION 10.4.

THE BORROWER WAIVES TRIAL BY JURY AND THE RIGHT TO INTERPOSE ANY DEFENSE BASED ON ANY STATUTE OF LIMITATIONS OR CLAIM OF LACHES IN ANY ACTION BY OR AGAINST THE BORROWER IN CONNECTION WITH ANY CLAIM OR DISPUTE ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

10.12. Participations. Bank shall have the right to enter into one or more participation with other lenders with respect to the Indebtedness. Upon prior notice to Borrower of such participation, Borrower shall thereafter furnish to such participant any information furnished by Borrower to Bank pursuant to the terms of the Loan Documents. Nothing in this Agreement or any other Loan Document shall prohibit Bank from pledging or assigning this Agreement and Bank’s rights under any of the other Loan Documents, including collateral therefor, to any Federal Reserve Bank in accordance with applicable law.

10.13. Multiple Borrowers. If more than one Person is named as Borrower hereunder, all Indebtedness, representations, warranties, covenants and indemnities set forth in the Loan Documents to which such Person is a party shall be joint and several. Bank shall have the right to deal with any individual of any Borrower with regard to all matters concerning the rights and obligations of Bank hereunder and pursuant to applicable law with regard to the transactions contemplated under the Loan Documents. All actions or inactions of the officers, managers, members and/or agents of any Borrower with regard to the transactions contemplated under the Loan Documents shall be deemed with full authority and binding upon all Borrowers hereunder. Each Borrower hereby appoints each other Borrower as its true and lawful attorney-in-fact, with full right and power, for purposes of exercising all rights of such Person hereunder and under applicable law with regard to the transactions contemplated under the Loan Documents. The foregoing is a material inducement to the agreement of Bank to enter into the terms hereof and to consummate the transactions contemplated hereby.

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10.14. Waiver of Certain Defenses. To the fullest extent permitted by applicable law, upon the occurrence of any Event of Default, neither Borrower nor anyone claiming by or under Borrower will claim or seek to take advantage of any law requiring Bank to attempt to realize upon any Collateral or collateral of any surety or guarantor, or any appraisement, evaluation, stay, extension, homestead, redemption or exemption laws now or hereafter in force in order to prevent or hinder the enforcement of this Agreement. Borrower, for itself and all who may at any time claim through or under Borrower, hereby expressly waives to the fullest extent permitted by law the benefit of all such laws. All rights of Bank and all obligations of Borrower hereunder shall be absolute and unconditional irrespective of (i) any change in the time, manner or place of payment of, or any other term of, all or any of the Indebtedness, or any other amendment or waiver of or any consent to any departure from any provision of the Loan Documents, (ii) any exchange, release or non-perfection of any other collateral given as security for the Indebtedness, or any release or amendment or waiver of or consent to departure from any guaranty for all or any of the Indebtedness, or (iii) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower or any third party, other than payment and performance in full of the Indebtedness.

10.15. Time of the Essence. Time is of the essence of this Agreement.

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

		UNIVEST NATIONAL BANK AND TRUST CO.
		By:	/s/ William D. Maeglin
			Name/Title: William D. Maeglin, Executive Vice President
		UNILIFE CROSS FARM LLC, by its sole member, UNILIFE CORPORATION
Attest:
By:	/s/ J. Christopher Naftzger	By:	/s/ R. Richard Wieland
	Name/Title: J. Christopher Naftzger                     Secretary		Name/Title: R. Richard Wieland                     Executive VP and CFO
(CORPORATE SEAL)

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SCHEDULE OF EXHIBITS

(If any exhibit is omitted, the information called for therein
shall be considered “None” or “Not Applicable”)

Exhibit	Section Reference	Title
1	1     (“Definitions”)	Definitions

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EXHIBIT 1

Definitions

1.1 Defined Terms:

“Advance” means an advance of proceeds of the Loan to Borrower pursuant to this Agreement.

“Advance Date” means the date on which an Advance is made.

“Advance Request” means the written request for an Advance under the Loan as identified in Subsection 2.5(a) hereof and shall also include presentments triggering an automatic Advance under the Services Agreement.

“Affiliate” of a Person means (a) any Person directly or indirectly owning 5% or more of the voting stock or rights of such named Person or of which the named Person owns 5% or more of such voting stock or rights; (b) any Person controlling, controlled by or under common control with such named Person; (c) any officer, director or employee of such named Person or any Affiliate of the named Person; and (d) any family member of the named Person or any Affiliate of such named Person.

“Borrowing Base” means, at any time, the sum held in the reserve account established by Surety with Bank and subject to the terms of a Security Agreement Regarding Reserve Account of even date herewith made by Surety in favor of Bank, less $100,000; provided, however, that only such monies as are otherwise available for withdrawal (and not subject to any hold) shall be included in the definition of Borrowing Base.

“Business Day” means a weekday on which commercial banks are open for business in Philadelphia, Pennsylvania.

“Code” means the Uniform Commercial Code, as in effect in Pennsylvania from time to time.

“Collateral” shall have the meaning given to it in the Security and Control Agreement Regarding Reserve Account executed by the Surety in favor of the Bank of even date herewith.

“Default Rate” means the highest lawful rate of interest per annum specified in any Note to apply after a default under such Note or, if no such rate is specified, a rate equal to the lesser of (a) the rate of interest provided under the Note plus two percent (2%) per annum and (b) the highest rate of interest allowed by law.

“Disputes” has the meaning set forth in Section 10.11.

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“Event of Default” means any event specified as such in Section 8.1 hereof (“Events of Default”), provided that there shall have been satisfied any requirement in connection with such event for the giving of notice or the lapse of time, or both; “Default” or “default” means any of such events, whether or not any such requirement for the giving of notice or the lapse of time or the happening of any further condition, event or act shall have been satisfied.

“GAAP” means generally accepted accounting principles as in effect in the United States from time to time.

“Indebtedness” means all obligations now or hereafter owed to Bank by Borrower or any Surety, whether related or unrelated to the Loan, including, without limitation, amounts owed or to be owed under the terms of the Loan Documents, or arising out of the transactions described therein, including, without limitation, the Loan, sums advanced to pay overdrafts on any account maintained by Borrower with Bank, together with all interest accruing thereon, all obligations under any swap agreements as defined in 11 U.S.C.. 101 between Bank and Borrower whenever executed, all fees, all costs of collection, attorneys’ fees and expenses of or advances by Bank which Bank pays or incurs in discharge of obligations of Borrower or to inspect, repossess, protect, preserve, store or dispose of any Collateral, whether such amounts are now due or hereafter become due, direct or indirect and whether such amounts due are from time to time reduced or entirely extinguished and thereafter re-incurred.

“Lien” means any mortgage, pledge, statutory lien or other lien arising by operation of law, security interest, trust arrangement, security deed, financing lease, collateral assignment or other encumbrance, conditional sale or title retention agreement, or any other interest in property designed to secure the repayment of Indebtedness, whether arising by agreement or under any statute or law or otherwise.

“Loan” means the non-revolving loan identified in Section 2.1 hereof.

“Loan Documents” means this Agreement, any Security Agreement, any Note, any Surety Agreement, the Advance Requests, UCC-1 financing statements and all other documents and instruments now or hereafter evidencing, describing, guaranteeing or securing the Indebtedness contemplated hereby or delivered in connection herewith or therewith, as they may be modified.

“Material Adverse Effect” means any (i) material adverse effect upon the validity, performance or enforceability of any of the Loan Documents or any of the transactions contemplated hereby or thereby, (ii) material adverse effect upon the properties, business, prospects or condition (financial or otherwise) of Borrower and/or any other Person obligated under any of the Loan Documents, or (iii) material adverse effect upon the ability of Borrower or any other Person to fulfill any obligation under any of the Loan Documents.

“Maximum Loan Amount” means $7,000,000.

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“Note” shall have the meaning set forth in Section 2.2 and any other promissory note now or hereafter evidencing any Indebtedness, and all modifications, extensions and renewals thereof.

“Person” means any natural person, corporation, unincorporated organization, trust, joint-stock company, joint venture, association, company, limited or general partnership, any government or any agency or political subdivision of any government, or any other entity or organization.

“Credit Period” means the period from and including the date of this Agreement to but not including the Termination Date.

“Security Agreement” means security agreement or similar instrument now or hereafter executed by Borrower or other Person granting Bank a security interest in any collateral to secure the Indebtedness.

“Solvent” means, as to any Person, that such Person has capital sufficient to carry on its business and transactions in which it is currently engaged and all business and transactions in which it is about to engage, is able to pay its debts as they mature, and has assets having a fair valuation greater than its liabilities, at fair valuation.

“Subsidiary” means any corporation, partnership or other entity in which Borrower, directly or indirectly, owns more than fifty percent (50%) of the stock, capital or income interests, or other beneficial interests, or which is effectively controlled by such Person.

“Surety” means Unilife Corporation and any other Person now or hereafter guaranteeing, endorsing or otherwise becoming liable for any Indebtedness.

“Surety Agreement” means any guaranty instrument now or hereafter executed and delivered by any Surety to Bank, as it may be modified.

“Termination Date” means February 13, 2011.

1.2. Financial Terms. All financial terms used herein shall have the meanings assigned to them under GAAP unless another meaning shall be specified.

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EX-10.48

Exhibit 10.48

NON-REVOLVING PROMISSORY NOTE

$7,000,000.00

August 13, 2010

Unilife Cross Farm LLC
637 Lowther Road
Lewisberry, PA 17339
(Hereinafter referred to as the “Borrower”)

Univest National Bank and Trust Co.
14 N. Main Street
P.O. Box 64197
Souderton, PA 18964-0197
(Hereinafter referred to as the “Bank”)

Borrower promises to pay to the order of Bank, in lawful money of the United States of America, at its office indicated above or wherever else Bank may specify, the sum of up to Seven Million and No/100 Dollars ($7,000,000.00) or such sum as may be advanced and outstanding from time to time, with interest on the unpaid principal balance at the rate and on the terms provided in this Promissory Note (including all renewals, extensions or modifications hereof, this “Note”).

INTEREST RATE DEFINITIONS.

PRIME RATE. The term “Prime Rate”, as provided herein, shall mean the rate announced by the Bank from time to time as its prime rate, which is not necessarily the lowest rate of interest charged by Lender.

INTEREST RATE TO BE APPLIED. Interest Rate. Interest shall accrue on the unpaid principal balance of this Note from the date hereof at a floating rate of interest, fixed on the first day of each month, at a rate equal to the greater of (i) the Prime Rate plus one-half percent (0.5%), or (ii) three and three quarters percent (3.75%), per annum (the “Interest Rate”).

DEFAULT RATE. In addition to all other rights contained in this Note, if a Default (defined herein) occurs and as long as a Default continues, all outstanding Obligations in Bank’s discretion shall bear interest at the Interest Rate plus 2% (“Default Rate”). The Default Rate shall also apply from acceleration until the Obligations or any judgment thereon are paid in full, except as otherwise required by law.

INTEREST COMPUTATION. (Actual/360). Interest shall be computed on the basis of a 360-day year for the actual number of days in the interest period (“Actual/360 Computation”). The Actual/360 Computation determines the annual effective interest yield by taking the stated (nominal) interest rate for a year’s period and then dividing said rate by 360 to determine the daily periodic rate to be applied for each day in the interest period. Application of the Actual/360 Computation produces an annualized effective interest rate exceeding that of the nominal rate.

REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly payments of accrued interest on the 15^th day of each month, beginning on September 15, 2010, until fully paid. Principal payments shall be due and payable upon receipt of proceeds (the “Proceeds”) received by Borrower and/or Unilife Corporation (the “Suretor”) in connection with a construction loan currently contemplated to be made by Metro Bank and guaranteed by the United Stated Department of Agriculture (USDA), such principal payments to be in an amount equal to the Proceeds received by Borrower and/or Suretor. In any event, and notwithstanding anything contained herein to the contrary, this Note shall be due and payable in full, including all principal and accrued interest, on February 13, 2011, the maturity date of this Note.

RESCISSION OF PAYMENTS. If any payment received by Bank under this Note or the other Loan Documents is rescinded, avoided or for any reason returned by Bank because of any adverse claim or threatened action, the returned payment shall remain payable as an obligation of all Persons liable under this Note or the other Loan Documents as though such payment had not been made.

LOAN AGREEMENT; LOAN DOCUMENTS; OBLIGATIONS. This Note is subject to the terms and conditions of that certain Non-Revolving Credit and Security Agreement between Bank and Borrower dated as of the date hereof, as the same may be modified and amended from time to time (the “Loan Agreement”). All capitalized terms not otherwise defined herein shall have such meaning as assigned to them in the Loan Agreement. The term “Obligations” used in this Note refers to any and all indebtedness and other obligations under this Note, all other obligations and Indebtedness as defined in the respective Loan Documents, all other obligations of Borrower or any guarantor of Borrower owed to Bank, and all obligations under any swap agreements as defined in 11 U.S.C. Section 101 between Bank and Borrower whenever executed.

LATE CHARGE. In the event any of payments of principal and interest in whole or in part are fifteen (15) days beyond their due date, Borrower shall pay Bank a “late charge” equal to $500.00 or five percent (5.00%) of the amount due on the due date, whichever is less. The Borrower acknowledges that the late charge imposed herein represents a reasonable estimate of the expenses of Bank incurred because of such lateness.

Acceptance by Bank of any late payment without an accompanying late charge shall not be deemed a waiver of Bank’s right to collect such late charge or to collect a late charge for any subsequent late payment received.

ATTORNEYS’ FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank’s reasonable expenses incurred to enforce or collect any of the Obligations, including, without limitation, reasonable arbitration, paralegals’, attorneys’ and experts’ fees and expenses, whether incurred without the commencement of a suit, in any trial, arbitration, or administrative proceeding, or in any appellate or bankruptcy proceeding.

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USURY. Regardless of any other provision of this Note or other Loan Documents, if for any reason the effective interest should exceed the maximum lawful interest, the effective interest shall be deemed reduced to, and shall be, such maximum lawful interest, and (i) the amount which would be excessive interest shall be deemed applied to the reduction of the principal balance of this Note and not to the payment of interest, and (ii) if the loan evidenced by this Note has been or is thereby paid in full, the excess shall be returned to the party paying same, such application to the principal balance of this Note or the refunding of excess to be a complete settlement and acquittance thereof.

BORROWER’S ACCOUNTS. Borrower grants Bank a security interest in all of Borrower’s existing or future deposit accounts with Bank and any of its affiliates to secure the Obligations.

EVENTS OF DEFAULT. An “Event of Default” shall exist if any one or more of the following events shall occur (individually, an “Event of Default,” and collectively, “Events of Default”): Nonpayment; Nonperformance. The failure of timely payment or performance of the Obligations under this Note. Event of Default Under Other Loan Documents. The occurrence of any Event of Default under any of the other Loan Documents. Expiration, Revocation or Termination of Commitment Letter. The expiration, termination or revocation of one or more of the commitment letters from Metro Bank to the Borrower dated March 19, 2010, as amended on May 10, 2010 and July 21, 2010.

REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of Default, Bank may at any time thereafter, take the following actions: Bank Lien and Set-off. Exercise its right of set-off or to foreclose its security interest or lien against any account of any nature or maturity of Borrower with Bank without notice. Acceleration Upon Default. Accelerate the maturity of this Note and all other Obligations, and all of the Obligations shall be immediately due and payable. Cumulative. Exercise any rights and remedies as provided under the Note and other Loan Documents, or as provided by law or equity.

CREDIT ADVANCES. This is a non-revolving credit note and the principal amount shall be advanced in accordance with the terms of the Loan Agreement.

CONFESSION OF JUDGMENT. THE FOLLOWING PARAGRAPH SETS FORTH A POWER OF AUTHORITY FOR ANY ATTORNEY TO CONFESS JUDGMENT AGAINST BORROWER. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST BORROWER, THE BORROWER, FOLLOWING CONSULTATION WITH (OR DECISION NOT TO CONSULT) SEPARATE COUNSEL FOR BORROWER AND WITH KNOWLEDGE OF THE LEGAL EFFECT HEREOF, HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE BORROWER HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES OF AMERICA, COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE INCLUDING, WITHOUT LIMITATION, A HEARING PRIOR TO GARNISHMENT AND ATTACHMENT OF THE BORROWER’S BANK ACCOUNT AND OTHER ASSETS. BORROWER ACKNOWLEDGES AND UNDERSTANDS THAT BY ENTERING INTO THIS NOTE CONTAINING A CONFESSION OF JUDGMENT CLAUSE THAT BORROWER IS VOLUNTARILY AND KNOWINGLY GIVING UP ANY AND ALL RIGHTS THAT BORROWER HAS OR MAY HAVE TO NOTICE AND A HEARING BEFORE JUDGMENT CAN BE ENTERED AGAINST BORROWER AND BEFORE THE BORROWER’S ASSETS, INCLUDING, WITHOUT LIMITATION, ITS BANK ACCOUNTS, MAY BE GARNISHED, LEVIED, EXECUTED UPON AND/OR ATTACHED. BORROWER UNDERSTANDS THAT ANY SUCH GARNISHMENT, LEVY, EXECUTION AND/OR ATTACHMENT SHALL RENDER THE PROPERTY GARNISHED, LEVIED, EXECUTED UPON OR ATTACHED IMMEDIATELY UNAVAILABLE TO BORROWER. IT IS SPECIFICALLY ACKNOWLEDGED BY BORROWER THAT THE BANK HAS RELIED ON THIS WARRANT OF ATTORNEY AND THE RIGHTS WAIVED BY BORROWER HEREIN IN RECEIVING THIS NOTE AND AS AN INDUCEMENT TO GRANT FINANCIAL ACCOMMODATIONS TO THE BORROWER.

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If an Event of Default occurs under this Note or any other Loan Documents, Borrower hereby authorizes and empowers any attorney of any court of record or the prothonotary or clerk of any county in the Commonwealth of Pennsylvania, or in any jurisdiction where permitted by law or the clerk of any United States District Court, to appear for Borrower in any and all actions which may be brought hereunder and enter and confess judgment against the Borrower or any of them in favor of the Bank for such sums as are due or may become due hereunder or under any other Loan Documents, together with costs of suit and actual collection costs including, without limitation, reasonable attorneys’ fees equal to 15% of the Obligations and Indebtedness then due and owing but in no event less than $5,000.00, with or without declaration, without prior notice, without stay of execution and with release of all procedural errors and the right to issue executions forthwith. To the extent permitted by law, Borrower waives the right of inquisition on any real estate levied on, voluntarily condemns the same, authorizes the prothonotary or clerk to enter upon the writ of execution this voluntary condemnation and agrees that such real estate may be sold on a writ of execution; and also waives any relief from any appraisement, stay or exemption law of any state now in force or hereafter enacted. Borrower further waives the right to any notice and hearing prior to the execution, levy, attachment or other type of enforcement of any judgment obtained hereunder, including, without limitation, the right to be notified and heard prior to the garnishment, levy, execution upon and attachment of Borrower’s bank accounts and other property. If a copy of this Note verified by affidavit of any officer of the Bank shall have been filed in such action, it shall not be necessary to file the original thereof as a warrant of attorney, any practice or usage to the contrary notwithstanding. The authority herein granted to confess judgment shall not be exhausted by any single exercise thereof, but shall continue and may be exercised from time to time as often as the Bank shall find it necessary and desirable and at all times until full payment of all amounts due hereunder and under any other Loan Documents. The Bank may confess one or more judgments in the same or different jurisdictions for all or any part of the obligations arising hereunder or under any other Loan Documents to which Borrower or any obligor for any reason, the Bank is hereby authorized and empowered to again appear for and confess judgment against Borrower for any part or all of the obligations owing under this Note and/or for any other liabilities, as herein provided.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and other Loan Documents shall be valid unless in writing and signed by an officer of Bank. No waiver by Bank of any Event of Default shall operate as a waiver of any other Event of Default or the same Event of Default on a future occasion. Neither the failure nor any delay on the part of Bank in exercising any right, power, or remedy under this Note and other Loan Documents shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

4

Each Borrower or any other Person liable under this Note waives presentment, protest, notice of dishonor, demand for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, notice of sale and all other notices of any kind. Further, each agrees that Bank may extend, modify or renew this Note or make a novation of the loan evidenced by this Note for any period and grant any releases, compromises or indulgences with respect to any collateral securing this Note, or with respect to any Borrower or any Person liable under this Note or other Loan Documents, all without notice to or consent of any Borrower or any Person who may be liable under this Note or other Loan Documents and without affecting the liability of Borrower or any Person who may be liable under this Note or other Loan Documents.

MISCELLANEOUS PROVISIONS. Assignment. This Note and other Loan Documents shall inure to the benefit of and be binding upon the parties and their respective heirs, legal representatives, successors and assigns. Bank’s interests in and rights under this Note and other Loan Documents are freely assignable, in whole or in part, by Bank. Borrower shall not assign its rights and interest hereunder without the prior written consent of Bank, and any attempt by Borrower to assign without Bank’s prior written consent is null and void. Any assignment shall not release Borrower from the Obligations. Applicable Law; Conflict Between Documents. This Note and other Loan Documents shall be governed by and construed under the laws of the state where Bank first shown above is located as shown in the heading of this Note without regard to that state’s conflict of laws principles. If the terms of this Note should conflict with the terms of the Loan Documents, the terms of this Note shall control. Severability. If any provision of this Note or of the other Loan Documents shall be prohibited or invalid under applicable law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note or other such document. Plural; Captions. All references in the Loan Documents to Borrower, Guarantor, Person, document or other nouns of reference mean both the singular and plural form, as the case may be. The captions contained in the Loan Documents are inserted for convenience only and shall not affect the meaning or interpretation of the Loan Documents. Binding Contract. Borrower by execution of and Bank by acceptance of this Note agree that each party is bound to all terms and provisions of this Note. Entirety. This Note and the other Loan Documents delivered in connection herewith and therewith embody the entire agreement between the parties and supersede all prior agreements and understandings relating to the subject matter hereof and thereof. Posting of Payments. All payments received during normal banking hours after 2:00 p.m. local time at the office of Bank first shown above shall be deemed received at the opening of the next banking day. Unless otherwise permitted by Bank, any repayments of this Note, other than immediately available U.S. currency, will not be credited to the outstanding loan balance until Bank receives collected funds. Fees and Taxes. Borrower shall promptly pay all documentary, intangible recordation and/or similar taxes on this transaction whether assessed at closing or arising from time to time, together with any interest and/or penalties relating thereto. Business Purpose. Borrower represents that the loan evidenced hereby is being obtained for business purposes.

5

IN WITNESS WHEREOF, Borrower, as of the day and year first above written, has caused this Note to be executed under seal.

		UNILIFE CROSS FARM LLC, by its sole member,
		UNILIFE CORPORATION
Attest:
Attest:	/s/ J. Christopher Naftzger	By:	/s/ R. Richard Wieland
	Name: J. Christopher Naftzger		Name: R. Richard Wieland
	Title:   Secretary		Title:   Executive VP and CFO

[Corporate Seal]

6

The undersigned surety acknowledges and agrees to the terms of this Note. Further, the undersigned acknowledges and agrees that, upon the occurrence of an Event of Default, including, without limitation, the failure to make any principal or interest payment when due, the Bank shall be permitted to set-off or to foreclose its security interest or lien against any account of any nature or maturity of the undersigned with Bank without notice.

		UNILIFE CORPORATION
Attest:
Attest:	/s/ J. Christopher Naftzger	By:	/s/ R. Richard Wieland
	Name: J. Christopher Naftzger		Name: R. Richard Wieland
	Title:   Secretary		Title:   President

[Corporate Seal]

7

EX-10.49

Exhibit 10.49

SURETY

1.	As used herein the following terms shall have the meanings indicated:
	“Person” includes an individual, partnership, corporation, unincorporated association and any other legal entity.
	“Undersigned” means the Person, or if more than one, all of the Persons by whom, or on whose behalf, this Surety is executed.
	“Bank” means UNIVEST NATIONAL BANK AND TRUST CO.
	“Principal Debtor” means UNILIFE CROSS FARM LLC, a Delaware limited liability company.
	“Principal Debtor’s Liabilities to Bank” means all existing and future liabilities of the Principal Debtor to the Bank of every nature whatsoever, including, but not being limited to, liabilities arising out of loans, discounts, advances or extensions of credit.

2. In consideration of $1.00 paid to the Undersigned by the Bank, the receipt of which is hereby acknowledged, the Undersigned hereby unconditionally agrees to act as surety to the Bank for the due performance, including, but not being limited to, the prompt payment when due, of the Principal Debtor’s Liabilities to Bank. This Surety is a continuing one and shall be effective and binding on the Undersigned regardless of how long before or after the date hereof any of the Principal Debtor’s Liabilities to Bank were or are incurred; provided, however, that the Undersigned shall not be liable hereunder for such of the Principal Debtor’s Liabilities to Bank as are incurred after the receipt by the Bank of written notice to that effect from the Undersigned, or if the Undersigned includes more than one Person, from any such Person, unless the same are renewals, extensions or modification of liabilities theretofore existing or unless the Bank is bound by agreement entered into before the receipt of such notice to permit the same to be incurred.

3. The amount of the Undersigned’s liability hereunder shall be unlimited. If subsequent to repayment by Principal Debtor, monies paid by the Principal Debtor are paid by Bank to a third party because of bankruptcy or other reasons, this Surety shall survive.

4. The liability of the Undersigned hereunder is absolute and unconditional and shall not be affected in any way by reason of (a) any failure to retain or preserve any rights against any Person or Persons (including the Principal Debtor and any of the Undersigned) or in any property, (b) the invalidity of any such rights which may be attempted to be obtained, or (c) the lack of prior enforcement of any rights against any Person or Persons (including the Principal Debtor and any of the Undersigned) or in any property. The Undersigned hereby waives any right to require, and the benefit of all laws now or hereafter in effect giving the Undersigned the right to require, any such prior enforcement, and the Undersigned agrees that any delay in enforcing or failure to enforce any such rights shall in no way affect the liability of the Undersigned hereunder, even if such rights are thereby lost.

5. The Undersigned hereby waives all notices whatsoever with respect to this Surety and the Principal Debtor’s Liabilities to Bank, including but not being limited to, notice: of the Bank’s acceptance hereof and intention to act in reliance hereon, of its reliance hereon, of the present existence or future incurring of any of the Principal Debtor’s Liabilities to Bank, of the amount, terms and conditions thereof, and of any defaults thereon. The Undersigned hereby consents to the taking of, or failure to take, from time to time without notice to the Undersigned, any action of any nature whatsoever with respect to the Principal Debtor’s Liabilities to Bank and with respect to any rights against any Person or Persons (including the Principal Debtor and any of the Undersigned) or in any property, including but not being limited to, any renewals, extensions, modifications, postponements, compromises, indulgences, waivers, surrenders, exchanges and releases, and the Undersigned will remain fully liable hereon notwithstanding any of the foregoing; provided, however, that the granting of a release of the liability hereunder of all the Undersigned or of less than all of the Undersigned shall be effective with respect to the liability hereunder of the one or more who are specifically so released but shall in no way affect the liability hereunder of any not so released. The death or incapacity of any of the Undersigned shall in no way affect the liability hereunder of any other of the Undersigned, and the liability of the Undersigned hereunder is binding upon the Undersigned, its respective heirs, personal representatives, permitted successors and assigns. The Undersigned may not assign its rights or obligations hereunder without the written consent of the Bank. The Undersigned hereby waives the benefit of all laws now or hereafter in effect in any way limiting or restricting the liability of the Undersigned hereunder.

6. In addition to all other liability of the Undersigned hereunder, the Undersigned also agrees to pay to the Bank on demand all costs and expenses (including counsel fees) which may be incurred in the enforcement of the Principal Debtor’s Liabilities to Bank or the liability of the Undersigned hereunder. If any of the Principal Debtor’s Liabilities to Bank is not duly performed, including the prompt payment when due of any amount payable thereon, all the Principal Debtor’s Liabilities to Bank shall at the Bank’s option, be deemed to be forthwith due and payable for the purposes of this Surety and the liability of the Undersigned hereunder. No delay in making demand on the Undersigned for performance or payment of the Undersigned’s obligations hereunder shall prejudice the right to enforce said performance or payment.

7. So long as the Principal Debtor’s Liabilities to Bank have not been paid in full, no payment by the Surety pursuant to the provisions hereof shall entitle the Surety by subrogation or otherwise to the rights of the Bank, to any payment by the Principal Debtor or out of the property of the Principal Debtor.

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8. The Undersigned and each of them hereby empowers the prothonotary or any attorney of any court of record within the United States or elsewhere, upon the occurrence of a default under any of Principal Debtor’s Liabilities to Bank, after any applicable cure period, to appear for the Undersigned and each of them and, with or without one or more declarations filed, to confess judgment as often as necessary against the Undersigned in favor of Bank in any such court, as of any term, for the Principal Debtor’s Liabilities to Bank, together with costs of suit and an attorney’s commission of ten percent (10%) for collection, with release of all errors. The Undersigned hereby waives any right to stay of execution and extension upon any levy on real estate pursuant to any judgment so entered and also hereby expressly waives the exemption of all property from levy and sale on any execution thereon and also any exemption laws now in force or which may hereafter be enacted by any State or Nation insofar as such exemption laws may be waived. Notwithstanding the amount of attorney’s commission included in any judgment entered by confession, Bank agrees not to collect or recover more than its actual and reasonable attorney’s fee and costs.

9. Limitation of Liability of Surety. Notwithstanding anything to the contrary contained in this Surety or any other document executed in connection with Principal Debtor’s Liabilities to Bank, the liability of Surety hereunder shall not at any time exceed, and Bank agrees that it will not seek personal recourse against Surety for the collection of any obligations guaranteed hereby in excess of the outstanding unpaid amount of the Principal Debtor’s Liabilities to Bank after giving effect to any payments or credits to which Principal Debtor may be entitled by law, upon any sale of the property or otherwise, it being the intention hereof that neither (i) payment of any portion of the Principal Debtor’s Liabilities to Bank, whether by voluntary prepayment, required amortization or otherwise, nor (ii) satisfaction or discharge of any portion of the Principal Debtor’s Liabilities to Bank, whether by foreclosure, delivery of a deed in lieu of foreclosure, sale of the property or otherwise, shall be deemed to discharge all or any portion of Surety’s liability hereunder, except to the extent, if any, that the outstanding amount of the obligations guaranteed hereby remaining unpaid after giving effect to any such payment, satisfaction or discharge, shall be less than the maximum recourse amount. The foregoing limitation shall not limit Surety’s liability for any other sums due under this Surety, including, without limitation, interest, costs and expenses.

10. NOTICE: THIS SURETYSHIP CONTAINS, AT PARAGRAPH 8, A WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE SURETY. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE SURETY, THE SURETY HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, AND ON THE ADVICE OF SEPARATE COUNSEL OF THE SURETY, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE SURETY HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES, THE COMMONWEALTH OF PENNSYLVANIA, OR OF ANY OTHER STATE.

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IN WITNESS WHEREOF, the Undersigned, intending to be legally bound hereby and intending this to be a sealed instrument, has duly executed this Surety under seal this 13^th day of August, 2010.

		UNILIFE CORPORATION
Attest:	/s/ J. Christopher Naftzger	By:	/s/ Richard Wieland
	Name: J. Christopher Naftzger		Name: R. Richard Wieland
	Title:   Secretary		Title:   Executive VP and CFO

(CORPORATE SEAL)

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EX-10.50

Exhibit 10.50

SECURITY AND CONTROL AGREEMENT REGARDING RESERVE ACCOUNT

THIS SECURITY AND CONTROL AGREEMENT REGARDING RESERVE ACCOUNT (this “Agreement”) is made this 13^th day of August, 2010, by UNILIFE CORPORATION, a Delaware corporation with an address at 637 Lowther Road, Lewisberry, PA 17339 (the “Debtor”) in favor of UNIVEST NATIONAL BANK AND TRUST CO., a national banking association with an address at 14 North Main Street, P.O. Box 64197, Souderton, PA 18964-0197 (the “Secured Party”).

WHEREAS, in order to induce the Secured Party to make that certain non-revolving line of credit loan (the “Loan”) to Debtor’s affiliate, Unilife Cross Farm LLC (the “Borrower”), the Debtor has executed a certain surety agreement of even date herewith in favor of the Secured Party (the “Surety Agreement”); and

WHEREAS, to secure the Debtor’s obligations under the Surety Agreement, the Secured Party is requiring that the Debtor establish a reserve account to be held by the Secured Party (the “Reserve Account”); and

WHEREAS, the Debtor has agreed to establish such Reserve Account.

NOW THEREFORE, to induce the Secured Party to make or maintain the Loan to the Borrower, the Debtor, intending to be legally bound, agrees with the Secured Party:

1. Definitions. The following terms as used in this Agreement shall have the meanings set forth below, unless the content otherwise requires:

“Obligations” means all liabilities and other obligations of the Debtor to the Secured Party in connection with the Surety Agreement and all liabilities and other obligations of the Borrower to the Secured Party in connection with the Loan (including, without limitation, any past, present or future advances, readvances, substitutions, extensions, renewals, interest, late charges, penalties and fees of any and all types) whether primary or secondary, absolute or contingent, direct or indirect, joint, several, joint and several or independent, voluntary or involuntary, similar or dissimilar, related or unrelated, matured or unmatured, now or hereafter existing, due or to become due, or held or to be held by, the Secured Party for its own account or as agent for others, whether created directly or acquired by assignment, negotiation or otherwise.

“Collateral” means the Reserve Account and any other account established by the Debtor with the Secured Party, including, without limitation, all checks, drafts, cash, instruments and other items at any time received in or for deposit in the Reserve Account, and all automated clearing house entries, electronic funds transfers or other funds deposited in, credited to, or held for deposit in or credit to, the Reserve Account, and all products and all accessions, substitutions and replacements of and to any of the foregoing and all proceeds of any of the foregoing.

“Event of Default” means the occurrence of any one or more of the following events: (i) a default or event of default occurs under the terms of any promissory note, loan agreement, surety agreement, guaranty, or other instrument or agreement evidencing or securing, or obtained by Secured Party with respect to, all or any portion of the Obligations; or (ii) any representation or warranty made by the Debtor in this Agreement is determined by the Secured Party to be false or misleading in any material respect; or (iii) the Debtor fails to perform or observe any term, covenant, condition, or agreement to be performed or observed by the Debtor under this Agreement.

2. Reserve Account. The Debtor shall establish a Reserve Account (Account #3111609578) with the Secured Party and, prior to the Borrower’s request to the Secured Party for an advance of any proceeds of the Loan, the Debtor shall deposit immediately available cash funds in an amount equal to or greater than the amount of the advance requested by the Borrower. Notwithstanding anything contained herein to the contrary, the Debtor shall at all times cause the balance held in the Reserve Account to be equal or greater than the outstanding amount of the Loan, plus One Hundred Thousand Dollars ($100,000.00). The Debtor acknowledges and agrees that, in the event that any principal and/or interest due and payable in connection with the Loan is not paid by Borrower when due, the Secured Party shall be immediately permitted to withdraw amounts from the Reserve Account in full or partial satisfaction of the amounts due from Borrower without further notice to, or direction from, Debtor. The Debtor acknowledges and agrees that the Secured Party shall have no obligation to advance any proceeds of the Loan unless and until amounts equal or greater to the amount of such proceeds have been deposited in immediately available funds in the Reserve Account and are otherwise available for withdraw (i.e., are not subject to any hold).

Notwithstanding the foregoing or anything contained herein to the contrary, the Debtor acknowledges and agrees that, so long as any of the Obligations remain outstanding, it shall not be permitted to make any withdrawal from the Reserve Account without the prior written consent of the Secured Party, which consent may be withheld in the sole discretion of the Secured Party. The Debtor confirms that this Agreement shall constitute an “authenticated record” and that the arrangements established under this Agreement shall constitute “control” of the Collateral as contemplated by Section 9-104 of the Uniform Commercial Code.

3. Security Interest. In order to secure the due and punctual payment and performance of the Obligations, the Debtor grants to the Secured Party a continuing security interest in, a general lien upon, and a right of set-off against the Collateral. The security interests, liens, and rights of set-off granted to the Secured Party are granted as security only and shall not subject the Secured Party to, or transfer or in any way affect or modify, any obligation or liability of the Debtor with respect to any of the Collateral or any transaction which gave rise to the Collateral.

4. Future Advances. The Obligations secured by the Collateral include all advances made at any time to or for the benefit of the Debtor or the Borrower in connection with the Loan and/or the Surety Agreement, whether obligatory or discretionary, including without limitation, any costs, expenses, court costs and attorneys’ fees incurred in the collection of the Obligations or the collection, disposition or preservation of the Collateral, and any advances made for the payment of taxes on the Collateral, or for the establishment, maintenance or enforcement of the Secured Party’s security interest in the Collateral.

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5. Further Assurances.

(A) At any time and from time to time, upon the demand of the Secured Party, the Debtor shall: (1) deliver and pledge to the Secured Party, endorsed or accompanied by such instruments of assignment and transfer in such form and substance as the Secured Party may request, any and all instruments, documents, or chattel paper as the Secured Party may specify; and (2) execute, deliver, file, and record any and all notices, statements, instruments, documents, agreements, or other papers (including financial statements) that may be necessary or desirable, or that the Secured Party may request, in order to create, preserve, perfect, or validate any security interest, lien, or right of set-off granted pursuant to this Agreement or to enable the Secured Party to exercise and enforce its rights under this Agreement.

(B) The Debtor irrevocably constitutes and appoints the Secured Party (and any of the Secured Party’s employees or agents designated by the Secured Party) as the Debtor’s true and lawful attorney with the power to sign and file one or more financing statements under the Uniform Commercial Code naming the Debtor as debtor and the Secured Party as secured party and indicating the types or describing the items of Collateral. The Secured Party may file a carbon, photographic or other reproduction of this Agreement or any financing statement executed pursuant to this Agreement, as a financing statement in any jurisdiction. Without the prior written consent of the Secured Party, the Debtor shall not file or authorize or permit to be filed in any jurisdiction any such financing or similar statement in which the Secured Party is not named as the only secured party.

(C) The Secured Party’s rights with respect to the Collateral shall include, but not be limited to, the right to (1) direct disposition of funds in the Reserve Account, (2) withdraw any amounts from the Reserve Account, or (3) draw upon or otherwise exercise any authority or powers with respect to the Reserve Account.

3. Representations and Warranties. The Debtor represents and warrants to the Secured Party that:

(A) This Agreement has been duly executed and delivered and constitutes the legal, valid, and binding obligation of the Debtor, enforceable against the Debtor in accordance with their terms.

(B) This Agreement does not and will not violate any provision of law or of the charter or bylaws or other organizational documents of the Debtor, or any other agreement or instrument to which the Debtor is a party or by which any of its assets or properties may be bound or affected.

(C) No consent or approval of any governmental or judicial authority, or of any other public authority, is necessary for the execution, delivery, and performance of this Agreement.

(D) The Debtor is and will be the owner of the Collateral, free from any adverse lien, security interest, encumbrance, or claim of any nature (except in favor of the Secured Party). This Agreement, together with any necessary filing of financing statements, grants and provides to the Secured Party a security interest in, and control of, the Collateral.

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4. Covenants. The Debtor covenants and agrees with the Secured Party that:

(A) The Debtor shall defend the Collateral against all claims and demands of all persons at any time claiming any interest in the Collateral.

(B) The Debtor shall provide the Secured Party with prompt written notice of any change in the chief executive office of the Debtor or the office where the Debtor maintains books and records pertaining to the Collateral, all such notices to be received by the Secured Party at least thirty (30) days prior to any such change.

(C) The Debtor shall pay any and all taxes, assessments and governmental charges upon the Collateral on the date such taxes, assessments, and governmental charges are due and payable, except to the extent that such taxes, assessments and charges are contested in good faith by the Debtor and adequate reserves are maintained for the same.

(D) The Debtor shall immediately notify the Secured Party of: (i) any material adverse change in its operations, property, or condition, financial or otherwise; (ii) the occurrence of an Event of Default under this Agreement; (iii) any seizure of or levy upon the Collateral or any other claims of third parties to or against the Collateral; and (iv) the institution of any litigation, governmental investigation or administrative proceedings against or affecting the Debtor or the Collateral.

(E) The Debtor shall not sell or otherwise assign, transfer or dispose of the Collateral or any interest in the Collateral, voluntarily or involuntarily, by operation of law or otherwise, other than in the ordinary course of business.

(F) The Debtor shall keep the Collateral free from any lien, security interest, or encumbrance except in favor of the Secured Party.

5. Rights of Secured Party. The Debtor further covenants and agrees with the Secured Party that:

(A) In the event of loss relating to the Collateral, the Secured Party, at its option, may (i) retain and apply all or any part of the insurance proceeds to reduce, in such order and amounts as the Secured Party may elect, the unpaid balance of the Obligations, or (ii) disburse all or any part of the insurance proceeds to or for the benefit of the Debtor for the purpose of repairing or replacing the Collateral after receiving proof satisfactory to the Secured Party of such repair or replacement, in either case without waiving or impairing the Obligations or any other provision of this Agreement. The Debtor assigns to the Secured Party any return or unearned premiums which may be due upon cancellation of any insurance policies for any reason whatsoever and directs the insurers to pay to the Secured Party any amounts so due, and the Debtor appoints the Secured Party its attorney-in-fact to endorse any draft or check which maybe payable to Debtor in order to collect any return or unearned premiums or the proceeds of such insurance.

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(B) In the event the Debtor fails to pay any federal, state or local taxes, assessments or other governmental charges or claims, the Secured Party, at its election and without notice or demand to the Debtor, shall have the right, but not the obligation, to make any payment or expenditure with the right of subrogation, and to take any action which the Debtor should have taken or which the Secured Party deems advisable in order to protect its security interest in the Collateral or its rights under this Agreement, and may appear in any action or proceeding with respect to any of the foregoing and retain counsel, without prejudice to any of the Secured Party’s rights or remedies available under this Agreement or at law or in equity or otherwise. All such sums, as well as costs and expenses, advanced by the Secured Party shall be secured by this Agreement, and shall bear interest at the highest rate payable on any of the Obligations, from the date of payment by the Secured Party until paid in full by the Debtor.

(C) The Secured Party may, at any time and from time to time, and regardless of whether an Event of Default has occurred or is continuing:

(1) in the name of the Debtor or the Secured Party (as the Secured Party in its sole discretion may determine) demand, collect, receive, and receipt for, compound, compromise, settle and give acquittance for, and prosecute and discontinue or dismiss, with or without prejudice, any suits or proceedings respecting any of the Collateral; and

(2) take any action which the Secured Party may deem necessary or desirable in order to realize on any of the Collateral, and the Debtor irrevocably appoints the Secured Party its attorney-in-fact with full power of substitution for all or any such acts or purposes.

6. Remedies Upon Default.

(A) Upon the occurrence of an Event of Default, the Secured Party may, at its election, declare all or any portion of the Obligations immediately due and payable, and the Secured Party may exercise any one or more of the following remedies, without notice or demand to the Debtor, except as expressly required under this Agreement or under any applicable provision of law which cannot be waived prior to default:

(1) exercise a right of set-off against the Reserve Account; and

(2) exercise all or any of the rights and remedies of a secured party under the Uniform Commercial Code or as creditor under any other applicable provision of law.

(B) Except to the extent limited by any applicable provision of law which cannot be waived prior to default, the Secured Party shall not be liable to any person whatsoever, for, or in connection with, the exercise, method of exercise, delay or failure to exercise any of the remedies provided for in this Agreement, and the Debtor shall indemnify, and agrees to hold harmless and waives and releases the Secured Party from any and all claims, liabilities, actions, costs, suits, demands, damages or losses whatsoever occurring on account of or in connection with such exercise, method of exercise, delay or failure to exercise.

(C) The proceeds of any Collateral received by the Secured Party at any time before or after an Event of Default, whether from a sale or other disposition of Collateral or otherwise, or the Collateral itself, may be applied to the payment in full or in part of such part of the Obligations and in such order and manner as the Secured Party may elect. The Debtor, to the extent of its rights in the Collateral, waives and releases any rights to require the Secured Party to collect any or all of the Obligations from any of the Collateral under any theory of marshalling of assets or otherwise.

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7. Right of Set-Off. In furtherance and not in limitation of any provisions contained in this Agreement, and in addition to the grant of security interest in the Collateral, the Debtor agrees that any and all deposits or other sums held by the Secured Party on behalf of the Debtor shall at all times constitute security for the Obligations and the Secured Party may exercise any right of set-off against such deposits or other sums as may accrue or exist under applicable law.

8. Miscellaneous.

(A) No course of dealing between the Debtor and the Secured Party, nor any failure or delay in exercising any right, power, or privilege of the Secured Party under this Agreement, shall operate as a waiver thereof or of any other right, power or privilege. No single or partial exercise of any right, power or privilege under this Agreement, or any abandonment or discontinuance of such exercise, shall preclude any other or further exercise of any such right, power or privilege or the exercise of any other right, power or privilege.

(B) The rights and remedies provided in this Agreement are cumulative and are in addition to, and not exclusive of, the rights and remedies provided by law or equity, by virtue of statute or otherwise (including, without limitation, the rights and remedies of a secured party under the Uniform Commercial Code of Pennsylvania).

(C) This Agreement shall be construed and enforced in accordance with and governed by the substantive laws in effect in the Commonwealth of Pennsylvania, without regard to principles of conflicts of law. Unless the context otherwise requires, all terms used in this Agreement which are defined in the Uniform Commercial Code of Pennsylvania shall have the meanings stated therein.

(D) This Agreement shall be binding upon the Debtor, and the Debtor’s successors and assigns, and shall operate for the benefit of the Secured Party, and the Secured Party’s successors and assigns.

(E) The headings in this Agreement are for convenience of reference only and should not limit or otherwise affect the meaning of this Agreement.

(F) No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by the Secured Party, and no waiver of any provision of this Agreement and no consent to any departure by the Debtor therefrom shall be effective unless it is in writing and signed by the Secured Party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(G) THE DEBTOR SUBMITS AND CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COMMONWEALTH OF PENNSYLVANIA IN ANY AND ALL ACTIONS AND PROCEEDINGS: (1) ARISING UNDER OR PURSUANT TO THIS AGREEMENT OR ANY AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION WITH OR RELATING TO THE OBLIGATIONS AND (2) IN ANY WAY ARISING OUT OF OR RELATED TO THE OBLIGATIONS.

(H) THE DEBTOR IRREVOCABLY WAIVES A JURY TRIAL AND ANY RIGHT TO A JURY TRIAL IN ANY ACTIONS OR PROCEEDINGS: (1) ARISING UNDER OR PURSUANT TO THIS AGREEMENT OR ANY AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION WITH OR RELATING TO THE OBLIGATIONS AND (2) IN ANY WAY ARISING OUT OF OR RELATED TO THE OBLIGATIONS, AND THE DEBTOR AGREES THAT ANY SUCH ACTION OR PROCEEDING MAY BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

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IN WITNESS WHEREOF, the Debtor has duly executed this Agreement as of the day and year first above written.

		UNILIFE CORPORATION
Attest:	/s/ J. Christopher Naftzger	By:	/s/ R. Richard Wieland
	Name: J. Christopher Naftzger		Name: R. Richard Wieland
	Title:   Secretary		Title:   Executive Vice President and CFO

(CORPORATE SEAL)

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EX-23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Unilife Corporation:

We consent to the incorporation by reference in Registration Statement No. 333-164964 on Form S-8 of Unilife Corporation of our report dated September 28, 2010, with respect to the consolidated balance sheet of Unilife Corporation and subsidiaries as of June 30, 2010 and the related consolidated statements of operations, stockholders’ equity and comprehensive loss, and cash flows for the year then ended, which report appears in the June 30, 2010 annual report on Form 10-K of Unilife Corporation.

Our report dated September 28, 2010 contains an explanatory paragraph that states that the Company has incurred recurring losses from operations and has an accumulated deficit, which raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.

/s/ KPMG LLP

Harrisburg, Pennsylvania

September 28, 2010

EX-23.2

Exhibit 23.2

Consent of BDO Kendalls Audit & Assurance (WA) Pty Ltd, Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statement on Form S-8 (No. 333-164964) of Unilife Corporation of our report dated November 11, 2009 with respect to the balance sheet of Unilife Corporation as of June 30, 2009 and related statements of operations, statements of stockholders’ equity and comprehensive income and statements of cash flows for the fiscal years ended June 30, 2009 and 2008, which report appears in Unilife Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010.

/s/  BDO Kendalls Audit & Assurance (WA) Pty Ltd

Perth, Western Australia

September 28, 2010

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Alan Shortall, certify that:

1. I have reviewed this Annual Report on Form 10-K of Unilife Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Alan Shortall

Name:     Alan Shortall

Title:  Chief Executive Officer

Date: September 28, 2010

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, R. Richard Wieland II, certify that:

1. I have reviewed this Annual Report on Form 10-K of Unilife Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  R. Richard Wieland II

Name:     R. Richard Wieland II

Title:  Chief Financial Officer

Date: September 28, 2010

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Unilife Corporation (the “Company”) on Form 10-K for the year ended June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alan Shortall, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Alan Shortall

Name:     Alan Shortall

Title:  Chief Executive Officer

Date: September 28, 2010

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Unilife Corporation (the “Company”) on Form 10-K for the year ended June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, R. Richard Wieland II, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  R. Richard Wieland II

Name:     R. Richard Wieland II

Title:  Chief Financial Officer

Date: September 28, 2010