Exhibit 10.2
                     AMENDED AND RESTATED SECURITY AGREEMENT

         THIS AMENDED AND  RESTATED  SECURITY  AGREEMENT  (the  "Agreement")  is
entered  into this 13th day of July,  1999 by and  among  UNIGENE  LABORATORIES,
INC.,  a Delaware  corporation,  having its  principal  place of business at 110
Little  Falls Road,  Fairfield,  New Jersey 07004 (the  "Company"),  Jay Levy, a
resident of New Jersey,  Warren P. Levy, a resident of New Jersey, and Ronald S.
Levy, a resident of New Jersey.  Jay Levy, Warren P. Levy and Ronald S. Levy are
sometimes  individually  referred  to  as a  "Secured  Party"  and  collectively
referred to as "Secured Parties."
                                   WITNESSETH:

         WHEREAS,  on March 2, 1995,  the  Secured  Parties  loaned the  Company
$500,000,  as evidenced by that certain  promissory  note,  dated as of March 2,
1995, (the "March 2 Note"); and

         WHEREAS,  in order to secure the  payment by the Company of the March 2
Note, on March 2, 1995,  the Company and the Secured  Parties  entered into that
certain  Security  Agreement  pursuant to which the Company  granted the Secured
Parties a security  interest  in its  equipment  located at its  premises at 110
Little Falls Road,  Fairfield,  New Jersey (the  "Fairfield  Equipment"),  which
agreement was amended by that certain  Amendment to Loan  Agreement and Security
Agreement,  dated March 20,  1995,  pursuant  to which the  Company  granted the
Secured Parties a security  interest in its equipment located at its premises at
83 Fulton Street, Boonton, New Jersey (the "Boonton Equipment"); and

         WHEREAS,  the security  interest in the Fairfield  Equipment granted by
the Company to the Secured  Parties was  perfected  by the filing of a financing
statement with respect thereto in Essex County, New Jersey on February 27, 1995;
and

         WHEREAS,  on June 29,  1995,  the  Secured  Parties  loaned the Company
$700,000,  as evidenced by that certain  promissory  note,  dated as of June 29,
1995, (the "June 29, 1995 Note"); and

         WHEREAS,  the  Company  and the  Secured  Parties  further  amended the
Security  Agreement  pursuant to that certain  Amendment to Loan  Agreement  and
Security Agreement,  dated March 20, 1995, in order to secure the payment by the
Company of the June 29, 1995 Note; and

         WHEREAS,  on June 25, 1999,  Jay Levy loaned the Company  $200,000,  as
evidenced by that certain promissory note, dated as of June 25, 1999, (the "June
25 Note"); and

         WHEREAS,  the  Company  and the  Secured  Parties  further  amended the
Security  Agreement  pursuant to that certain  Amendment to Loan  Agreement  and
Security  Agreement,  dated June 25, 1999, in order to secure the payment by the
Company of the June 25 Note; and

         WHEREAS,  on June 29, 1999,  Jay Levy loaned the Company  $350,000,  as
evidenced by that certain promissory note, dated as of June 29, 1999, (the "June
29, 1999 Note"); and
<PAGE>
         WHEREAS,  the  Company  and the  Secured  Parties  further  amended the
Security  Agreement  pursuant to that certain  Amendment to Loan  Agreement  and
Security  Agreement,  dated June 29, 1999, in order to secure the payment by the
Company of the June 29, 1999 Note; and

         WHEREAS,  on June 30, 1999,  Jay Levy loaned the Company  $350,000,  as
evidenced by that certain promissory note, dated as of June 30, 1999, (the "June
30 Note"); and

         WHEREAS,  the  Company  and the  Secured  Parties  further  amended the
Security  Agreement  pursuant to that certain  Amendment to Loan  Agreement  and
Security  Agreement,  dated June 30, 1999, in order to secure the payment by the
Company of the June 30 Note; and

         WHEREAS,  Jay  Levy  has made  the  following  additional  loans to the
Company: (i) a loan in the amount of $200,000 on May 5, 1999, (ii) a loan in the
amount of $200,000 on May 24,  1999,  and (iii) a loan in the amount of $200,000
on June 7, 1999 (collectively, the "Prior Loans"); and

         WHEREAS,   Jay  Levy  has   agreed   to  loan  the   Company   $100,000
contemporaneously with the execution and delivery hereof (the "New Loan"); and

         WHEREAS,  in order to induce  Jay Levy to make the Prior  Loans and the
New  Loan,  the  Company  has  agreed to grant him a  security  interest  in the
Collateral  (as defined  below) to secure  payment of the New Loan and the Prior
Loans and a mortgage on certain real property owned by the Company at 110 Little
Falls Road, Fairfield, New Jersey; and

         WHEREAS,  in order to document  the New Loan and the Prior Loans and to
amend and restate the June 25 Note, the June 29, 1999 Note and the June 30 Note,
the Company  contemporaneously with the execution and delivery hereof will issue
and deliver to Jay Levy that  certain  Amended and Restated  Secured  Promissory
Note in the principal  amount of $1,600,000  (the "Restated  Note") and Jay Levy
will in exchange for the Restated Note  surrender the June 25 Note, the June 29,
1999 Note and the June 30 Note; and
<PAGE>
         WHEREAS,  the parties desire to document the security  interest granted
to Jay Levy to secure payment of the New Loan and the Prior Loans,  and to amend
and restate the Security Agreement,  as heretofore amended, in its entirety, all
on the terms set forth herein.

         NOW, THEREFORE, in consideration of the mutual promises made herein and
for other good and valuable consideration,  the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:

1.       Definitions.  The  following  terms  when used  herein  shall  have the
         following definitions:

         1.1      "Collateral"   shall  mean  (a)  all   laboratory   equipment,
manufacturing  equipment,  office  machinery,  tools,  materials,   storage  and
handling   equipment,   computer  equipment  and  hardware,   including  central
processing units, terminals, drives, memory units, printers, keyboards, screens,
peripherals and input or output  devices,  and other equipment of every kind and
nature,  wherever  situated,  now or  hereafter  owned by the  Company,  (b) all
additions,  accessions,  replacements,  accessories  and parts in respect of the
foregoing,  all  manuals,  blueprints,  warranties  and  records  in  connection
therewith, all rights against suppliers, warrantors,  manufacturers,  sellers or
others in connection therewith,  and all substitutions for any of the foregoing,
(c) all books and records, in whatever form, owned by the Company related to the
foregoing, and (d) all proceeds of any of the foregoing.

         1.2      "Event of Default" shall mean:

                  (a) an "Event of Default" as defined in the Restated Note;

                  (b) any occurrence specified in Section 3 of the March 2 Note;

                  (c) any occurrence specified in Section 3 of the June 29, 1995
                  Note; or

                  (d) any material breach of representation  made by the Company
                  in Section 5 hereof.

         1.3      "Obligations"  shall mean all  indebtedness,  obligations  and
liabilities  of every kind and nature of the Company now or  hereafter  existing
under or arising out of or in  connection  with the Restated  Note,  the March 2
Note, the June 29, 1995 Note and this Agreement and all  extensions,  amendments
or renewals  hereof or thereof,  whether for principal,  premium,  interest,  or
fees,  and all or any portion of such  indebtedness,  obligations or liabilities
that are  paid to the  extent  all or any part of such  payment  is  avoided  or
recovered  directly  or  indirectly  from  a  Secured  Party  as  a  preference,
fraudulent transfer or otherwise.

2. Grant of Security.  As security for the due and punctual  performance  of the
Obligations,  the  Company  hereby (a) grants to the  Secured  Parties,  for the
ratable benefit of the Secured  Parties,  a security  interest in the Collateral
and (b) reaffirms all prior grants to the Secured Parties of security  interests
in the Collateral.
<PAGE>
3.  Release and Satisfaction.

         3.1. Upon the termination of this Agreement,  the Secured Parties shall
promptly  deliver to the Company  upon  request  therefor  and at the  Company's
expense,  releases  and  satisfactions  of all  financing  statements  and other
registrations of security.

         3.2.  The Company  from time to time may sell all or any portion of the
Collateral;  provided that such sale is an arm's length transaction with a party
that is not an affiliate of the Company and that the Collateral is sold for fair
value;  provided  further  that the  proceeds  from such sale  shall be  applied
ratably to the payment of the Obligations to the extent thereof.

4. Location of  Collateral.  The Collateral is located at 110 Little Falls Road,
Fairfield,  New Jersey or 83 Fulton Street,  Boonton, New Jersey. So long as any
Obligations  shall  be  outstanding,  the  Company  shall  not  move  any of the
Collateral  having an aggregate  book or market value in excess of $5,000 to any
location  other than 110 Little Falls Road,  Fairfield,  New Jersey or 83 Fulton
Street,  Boonton,  New Jersey,  unless the Company  shall have given the Secured
Parties  ten  (10)  day's  prior  written  notice  of  its  intention  to do so,
identifying the new location.

5. Representations and Warranties. The Company hereby represents and warrants to
the Secured Parties that, as of the date hereof:

         5.1. The Company owns all of the Collateral free and clear of any lien,
encumbrance,  mortgage,  security  agreement,  pledge or charge other than (i) a
security interest in the Collateral granted to Jean Levy to secure a loan in the
principal amount of $650,000 and (ii) security  interests  heretofore granted to
the Secured Parties.

         5.2. The Company is a corporation duly  incorporated,  validly existing
and in good  standing  under  the  laws of the  State  of  Delaware  and has all
requisite  corporate  power and  authority  to carry on its business and own its
properties  as now  conducted  and owned.  The Company is duly  qualified  to do
business  as a  foreign  corporation  and in good  standing  in the State of New
Jersey.

         5.3.  The Company has full  corporate  power and  authority to execute,
deliver and perform this Agreement and has taken all requisite  corporate action
necessary for (i) the  authorization,  execution and delivery of this  Agreement
and (ii) the  performance  of all  obligations  of the Company  hereunder.  This
Agreement  constitutes the legal,  valid and binding  obligation of the Company,
enforceable  against the  Company in  accordance  with its terms  except as such
enforcement   may  be  limited  by  (a)   applicable   bankruptcy,   insolvency,
reorganization,  voidable  preference,  fraudulent  conveyance and other similar
laws  affecting  the  rights or  remedies  of  creditors  generally  and (b) the
exercise of judicial  discretion in accordance with general principles of equity
(whether applied by a court of law or equity).
<PAGE>
6. Further Actions. The Company agrees that from time to time, at the expense of
the  Company,  the  Company  will  promptly  execute  and  deliver  all  further
instruments  and  documents  and take all further  action that any Secured Party
reasonably may request in order to perfect the security interest granted hereby,
including the execution,  recording and filing of such financing or continuation
statements,  or amendments  thereto,  and such other  instruments,  documents or
notices, as a Secured Party reasonably may request.

7. Covenants. During the term hereof, the Company shall:

     (a) not use or permit any Collateral to be used  unlawfully or in violation
of any  provision of this  Agreement or any  applicable  statute,  regulation or
ordinance or any policy of insurance covering the Collateral;

     (b)  maintain the Collateral in good working condition;

     (c) maintain insurance reasonably believed by Company to be adequate on all
Collateral of a type customarily  insured by companies similarly situated to the
Company, covering property damage and loss of income by fire or other casualty;

     (d) pay promptly  when due all property  and other taxes,  assessments  and
governmental  charges or levies imposed upon, and all claims  (including  claims
for labor, materials and supplies) against, the Collateral, except to the extent
the validity thereof is being contested in good faith;

     (e) not sell,  assign  (by  operation  of law or  otherwise)  or  otherwise
dispose of any of the Collateral,  except (i) as permitted by this Agreement and
(ii) that the Company may dispose of Collateral that has become obsolete; and

     (f) keep reasonable records respecting the Collateral and at all times keep
at least one complete set of its records concerning all of the Collateral at its
chief executive office or principal place of business.

7.  Inspection.  Any Secured Party may examine and inspect the  Collateral  upon
reasonable prior notice during the Company's normal business hours.

8. Secured  Parties May Perform.  If the Company  fails to perform any agreement
contained  herein,  each Secured Party may itself perform,  or cause performance
of,  such  agreement,  and  the  expenses  of such  Secured  Party  incurred  in
connection therewith shall be reimbursed by the Company promptly.

9. Enforcement.  Upon the occurrence of any Event of Default, each Secured Party
shall have, in addition to all of its other rights under this Agreement,  all of
the rights and remedies of a secured party under the Uniform Commercial Code.

10.  Termination.  This  Agreement  shall  terminate  at such time as all of the
Obligations  shall have been  indefeasibly  fully paid and satisfied  and, until
such time, the Secured  Parties shall retain all security in the Collateral held
by them hereunder.
<PAGE>
11. Binding  Effect.  This  Agreement  shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Secured Parties and
their respective heirs, executors, administrators, successors and assigns.

12. Notices.  Unless otherwise provided,  any notice required or permitted under
this Agreement shall be given in writing and shall be deemed  effectively  given
(i) on the  same  day if  given  by  personal  delivery,  (ii) on the  following
business day if given by telecopier with  confirmation  of receipt,  or (iii) on
the  following  business day if given by  nationally  recognized  overnight  air
courier, in each case addressed to the party to be notified at:

         110 Little Falls Road
         Fairfield, New Jersey, 07004,
         Attention: [Name of Party]
         Facsimile: 973-227-6088

or at such  other  address  as such  party may  designate  by ten days'  advance
written notice given hereunder to any other party.

13.  Waiver.  No delay or failure on the part of any Secured Party in exercising
any right,  privilege,  remedy or option  hereunder shall operate as a waiver of
such or any other  right,  privilege,  remedy or option,  and no waiver shall be
valid  unless in writing and signed by each  Secured  Party and then only to the
extent therein set forth.

14.  Modifications  and  Amendments.  This  Agreement  constitutes  the complete
agreement  between the parties  with  respect to the subject  matter  hereof and
supersedes all prior agreements with respect thereto.  This Agreement may not be
changed, modified or amended orally, but only by a writing signed by all parties
hereto.

         15.  Applicable  Law. This  Agreement  shall be construed in accordance
with and governed by the laws of the State of New Jersey  without  giving effect
to conflicts of laws principles.

         16.  Counterparts.  This  Agreement  may be  executed  in  two or  more
counterparts,  each of which shall constitute an original and all of which shall
constitute the same instrument.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be executed on the day and year first above written.
<PAGE>
                                            UNIGENE LABORATORIES, INC.

                                            By:
                                                     Name:
                                                     Title:

                                            ------------------------------------
                                            JAY LEVY

                                            ------------------------------------
                                            WARREN P. LEVY

                                            ------------------------------------
                                            RONALD S. LEVY