Unilife Announces Amendment to Merger Implementation Agreement Signed With Unilife Corporation

  On 1 September 2009, Unilife Medical
Solutions Limited (ASX: UNI) (PINKSHEETS: UNIFF) (Unilife Australia)
entered into a Merger Implementation Agreement with Unilife Corporation
(Unilife USA) to facilitate the proposed redomiciliation of the Unilife
group in the United States of America (Proposed Transaction).

As at the date of signing the Merger Implementation Agreement, Unilife Australia's share price closed at A$0.69 per share. In establishing the original consolidation rate, and to ensure that Unilife would be able to maintain the NASDAQ minimum listing price of US$4.00 per share, the Board established a consolidation ratio that provided a level of security against any decline which might occur in both the Australian dollar exchange rate and the Unilife share price. Thus, it was originally resolved that upon implementation of the Proposed Transaction, Unilife Australia's issued capital would be effectively consolidated by adopting a ratio of 12:1 that would provide the desired level of flexibility to meet NASDAQ minimum price policies and satisfy expected investor requirements in the United States.

During the past sixty days, strong investor demand for Unilife Australia shares in response to the positive events occurring at the Company has resulted in a significant increase of Unilife Australia's share price. This rise in the share price of Unilife Australia, and its subsequent stabilisation, coupled with the rise in the Australian dollar's exchange rate versus the US dollar, has resulted in the Unilife Board deciding to target a higher US$ listing price and to revise the consolidation ratio adopted under the Merger Implementation Agreement. Accordingly, the Board has now resolved to adopt a 6:1 ratio to effectively consolidate the share capital upon the redomiciliation of the Unilife group. In simple terms, under the Proposed Transaction, Unilife USA will now issue to shareholders:

--  One share of common stock in Unilife USA for every six ordinary
    shares held in Unilife Australia; or
--  One CHESS Depositary Interest (CDI) (listed on the ASX) for every
    ordinary share held in Unilife Australia, subject to rounding.
    

Each share of Unilife USA common stock will be equivalent to six CDIs and CDIs will be able to be converted into shares of Unilife USA common stock and vice versa on a 6:1 basis at any time after the redomiciliation. Unilife Australia and Unilife Corporation have accordingly amended the Merger Implementation Agreement to reflect the new consolidation ratio.

About the Unilife Australia Group

Unilife Medical Solutions Ltd is an ISO 13485 certified company that designs, develops and supplies innovative safety medical devices. Listed on the Australian Securities Exchange (ASX: UNI) since 2002, Unilife has FDA-registered manufacturing facilities in the US State of Pennsylvania and a proprietary portfolio of clinical and prefilled safety syringes designed for use within healthcare and pharmaceutical markets.

Shareholder / Analyst Enquiries: Australia: Jeff Carter Phone: + 61 2 8346 6500 United States: Stuart Fine Phone: + 1 908 469 1788