Exhibit 10.4
                         MORTGAGE AND SECURITY AGREEMENT

         THIS  MORTGAGE  made  this  13th day of  July,  1999,  between  UNIGENE
LABORATORIES,  INC.,  a  Delaware  corporation,  having  an office at 110 Little
Falls Road, Fairfield,  New Jersey 07004 (herein called the "Mortgagor") and JAY
LEVY,  having an address  at 2150  Center  Avenue,  Fort Lee,  New Jersey  07024
(herein called the "Mortgagee").

                              W I T N E S S E T H:

         WHEREAS,  the  Mortgagor  is  now  indebted  to  the  Mortgagee  in the
principal  sum of ONE MILLION SIX HUNDRED  THOUSAND  and 00/100  ($1,600,000.00)
DOLLARS with interest thereon at the rates and times more particularly set forth
in a certain  Amended and Restated  Secured Note of even date  herewith from the
Mortgagor herein to the Mortgagee herein as Payee (the "Note"); and WHEREAS, the
Mortgagor  is the  owner in fee  simple  of a  certain  tract or  parcel of real
property and improvements  thereon located in the Township of Fairfield,  County
of Essex and State of New Jersey.

         NOW,  THEREFORE,  for the better  securing of the payment of the monies
owing on said Note and all  extensions  and renewals  thereof and  substitutions
therefor,  including other payments  mentioned therein for the protection of the
security as well as to secure the  repayment of all future  advances that may be
made by the Mortgagee to the Mortgagor with interest thereon as may from time to
time be agreed upon, the Mortgagor has granted, bargained, sold and conveyed and
by these presents does grant, and assigns,  ALL the following tract or parcel of
land and premises  located in the  ownership of  Fairfield,  County of Essex and
State of New Jersey, as more particularly described in Exhibit A attached hereto
and made a part hereof (hereafter referred to as the "Mortgaged Premises").

         TOGETHER  with  all and  singular  and  tenements,  hereditaments,  and
appurtenances thereunto belonging, or in anyway appertaining,  and the reversion
or reversions,  remainder and remainders; and also all the estate, right, title,
interest,  property,  possession, claim and demand whatsoever, in Law as well as
in Equity,  of the  Mortgagor,  of, in and to the same and every part and parcel
thereof,  with  appurtenances;  including  all fixtures  affixed to the same, or
intended so to be, and also all  equipment and  improvements  intended so to be,
and also all equipment and  improvements now in, upon, or which may hereafter be
installed  or  placed  in or upon the  same,  adapted  to or  necessary  for the
complete and conformable  use,  enjoyment or occupancy  thereof.  TO HAVE AND TO
HOLD,   the  above  granted  and   described   Mortgaged   Premises,   with  the
appurtenances, fixtures, equipment and improvements thereto, unto the Mortgagee,
its successors and assigns, to its and their own proper use and benefit forever.
PROVIDED ALWAYS, and these premises are upon the express condition,  that if the
Mortgagor  shall well and truly pay to the Mortgagee  all money  secured  hereby
when the same shall become due and payable,  without deduction or credit for any
amount  payable for taxes,  then these  presents and the estate  hereby  granted
shall cease, terminate and be void.
<PAGE>
THE MORTGAGOR REPRESENTS,  WARRANTS,  COVENANTS AND AGREES WITH THE MORTGAGEE AS
FOLLOWS:
               1. The Mortgagor  shall comply with all provisions  hereof and of
the Note evidencing the  indebtedness  secured hereby (which Note is made a part
hereof as if recited at length herein).

               2. The Mortgagor  shall pay to the Mortgagee said sum of money as
mentioned above and interest thereon and additions thereto,  as expressed in the
conditions of the Note.

               3. If requested by the Mortgagee,  the Mortgagor shall pay to the
Mortgagee at the time of each monthly payment, one-twelfth (1/12) of the current
annual taxes levied and assessed  against the  Mortgaged  Premises,  and one (1)
month's  proportion  of the insurance  premium,  to be held by the Mortgagee and
used in  payment  of the taxes and  insurance  premiums  as they  become due and
payable,  and the  Mortgagor  shall make such further tax or  insurance  reserve
payments  in such  amounts  and at such  time to  times as the  Mortgagee  shall
require,  and if not so  requested,  Mortgagor  shall  provide to  Mortgagee  as
requested  within twenty (20) days of the due date proof of payment of any taxes
or  assessments  levied or  assessed  against  the  Mortgaged  Premises  and any
insurance premiums due with regard to insurance of the Mortgaged Premises.

               4. The  Mortgagor  is  seized  of an  indefeasible  estate in fee
simple  in the  Mortgaged  Premises,  and the  Mortgagor  warrants  title to the
Mortgaged Premises subject to prior mortgages and security agreements of record.
<PAGE>
               5. The Mortgagor  shall keep any  buildings and other  structures
now or hereafter  erected upon the Mortgaged  Premises,  including  fixtures and
equipment,  insured against loss or damage by fire, and will insure against such
other hazards as Mortgagee may specify,  by insurers and in amounts  approved by
the  Mortgagee,  with  loss  payable  to  the  Mortgagee  as  mortgagee  and  as
co-insured,  and shall deliver said policy or policies to the Mortgagee;  and in
default thereof,  the Mortgagee may effect such insurance.  The Mortgagor hereby
assigns to the  Mortgagee  all rights to demand and  receive  all money  payable
under any of said  policies of  insurance,  or  certificates  of insurance  with
respect to public  liability  insurance,  and the rights to settle or compromise
all claims  thereunder,  and all money received may be applied on account of the
indebtedness  secured  hereby or used to repair or replace the  buildings on the
Mortgaged  Premises,  as the  Mortgagee  shall  elect.  In the  event of loss or
damage, the Mortgagor shall give immediate notice thereof to the Mortgagee.  The
Mortgagee may make proof of loss if not made promptly by the Mortgagor, and such
insurer is hereby  authorized  and  directed  to make  payment  for such loss or
damage  directly to the  Mortgagee  instead of the  Mortgagor  and the Mortgagee
jointly.  At least thirty (30) days prior to the expiration of any such policies
the Mortgagor  shall furnish  evidence  satisfactory  to the Mortgagee  that the
policies have been renewed or replaced or are no longer required.

               6. In the  event the  Mortgaged  Premises,  or any part  thereof,
shall be taken and  condemned  for public  purposes  by the proper  governmental
authorities, the Mortgagor shall have no claim against the award for damages, or
be entitled to any portion of the award until the entire indebtedness secured by
this Mortgage  shall be paid in full, and all rights to damages of the Mortgagor
are hereby assigned to the Mortgagee to the extent of the principal indebtedness
as remains unpaid (the Mortgagee, however, having the right to appeal said award
to the courts of competent  jurisdiction)  . The  satisfaction  of the principal
condemnation  award upon  exercise  of any  authority  with the right of eminent
domain shall constitute a prepayment to the full extent thereof.

                7.  The  Mortgagor  agrees  to  comply  with  all  laws,  rules,
regulations  and ordinances  made or promulgated by lawful  authority and now or
hereafter  applicable  to the  Mortgaged  Premises  within  such  time as may be
required by law.
<PAGE>
                8. The Mortgagor shall keep and maintain any buildings and other
structures on the Mortgaged Premises,  including fixtures and equipment, in good
and  substantial  repair,  and will make such  repairs as may be required by the
Mortgagee  within thirty (30) days from the written  notice from the  Mortgagee.
The Mortgagor  shall not do, and shall not permit to be done,  any act which may
in any way impair or weaken the security under this Mortgage,  and the Mortgagor
shall not remove or demolish or substantially  alter,  without the prior express
written consent of the Mortgagee, any building,  structure or improvement on the
Mortgaged Premises.

                9.  Mortgagor  shall have the right to prepay  this  Mortgage in
full or in part at any time.

                10. The Mortgagor shall pay any taxes, assessments, municipal or
governmental rates,  charges,  impositions,  liens, and water and sewer rents or
any part  thereof,  heretofore  or hereafter  imposed upon or which may become a
lien against the Mortgaged  Premises  within ten (10) days after the same is due
and payable and shall submit receipt therefore on request.

               11. The Mortgagor  hereby  presently  assigns all leases (present
and future),  rents,  issues,  and profits  arising out of or from the Mortgaged
Premises to the Mortgagee as additional security for payment of the indebtedness
secured  by this  mortgage  or under  the  Note,  and in the  event  of  default
hereunder  after notice the  Mortgagee  shall be entitled to enter upon and take
possession of the Mortgaged Premises,  and collect and receive all rents, issues
and profits arising from the Mortgaged Premises, including the rents, issues and
profits then due and unpaid to the Mortgagor  and also those  thereafter to fall
due.
               12.  The  Mortgagor  shall,  upon  the  written  request  of  the
Mortgagee, certify within ten (10) business days to such person as the Mortgagee
may  designate,  by  writing  duly  acknowledged,  the amount of  principal  and
interest then owing on this mortgage,  and whether any offsets or defenses exist
against the indebtedness evidenced by the Note.

               13. The Mortgagee may, at its option, expend money for insurance,
payment  of  taxes,  assessments,  municipal  or  governmental  rates,  charges,
impositions,  liens,  and  water  and sewer  rents or any part  thereof  and for
repair,  maintenance  and  preservation  of the  Mortgaged  Premises,  or of any
buildings or other structures thereon,  including fixtures, or for the discharge
of any liens or  encumbrances on the Mortgaged  Premises,  or for perfecting the
title thereto, or for enforcing  collection of the indebtedness  secured hereby,
or for any water,  gas or electric  charge imposed for any services  rendered to
the  Mortgaged  Premises,  or for  advances  of any  trustee or  receiver of the
Mortgaged  Premises,  or for  any  addition  or  improvements  to the  Mortgaged
Premises,  or to any buildings or other structures thereon,  including fixtures,
considered  desirable by the Mortgagee while it or any receiver or trustee is in
possession  thereof;  and all money so paid,  with interest at the rate fixed in
the Note,  shall be a lien on the Mortgaged  Premises added to the amount of the
Note and secured by this Mortgage and shall be due and payable upon demand.
<PAGE>
               14. No owner of the Mortgaged  Premises  shall be entitled to any
credit by reason of payment of any tax thereon.

               15. This Mortgage  constitutes a security agreement under the New
Jersey Uniform  Commercial Code and the Mortgagor hereby grants to the Mortgagee
a  security  interest  in  the  Mortgagor's  title  and  interest  in and to all
appurtenances,  fixtures,  equipment  and  improvements  to,  now  or  hereafter
installed,  placed or used in and  necessary  to the  operation  of building and
structure,   including  without  by  way  of  limitation,   lighting,   heating,
ventilating,  air-conditioning systems, sprinkling,  plumbing, gas, water, power
systems, boilers and meters, which are now, or which may hereafter be, placed or
located in, on, or upon the Mortgaged Premises herein defined, together with all
additions and accessories  thereto,  substitutions  therefor,  and  replacements
thereof and all cash and non-cash proceeds thereof. The Mortgagor shall execute,
deliver, file and refile any financing statements,  continuation statements,  or
other  security  agreements  that the Mortgagee may require from time to time to
confirm  the  lien of this  Mortgage  with  respect  to such  property.  Without
limiting the foregoing,  the Mortgagor hereby irrevocably appoints the Mortgagee
attorney-in-fact for the Mortgagor to execute, deliver and file such instruments
for and on behalf of the Mortgagor. Notwithstanding any release of any or all of
that property included in the Mortgaged Premises which is deemed "real property"
and proceedings to foreclose this Mortgage or its  satisfaction  of record,  the
terms hereof shall survive as a security  agreement with respect to the security
interest   created   hereby  and  referred  to  above  until  the  repayment  or
satisfaction in full of the obligations of the Mortgagor as are now or hereafter
secured hereby.

               16. The  proceeds of the Note shall be  disbursed  in  accordance
with the terms and conditions set forth in the Note.
<PAGE>
THE MORTGAGOR SHALL BE IN DEFAULT OF THIS MORTGAGE UPON THE OCCURRENCE OF ANY OF
THE FOLLOWING EVENTS:

               1. In the event that any  representation  or warranty made by the
Mortgagor  in  this  Mortgage,  in the  Note  or in any  other  writing  used in
connection herewith,  shall prove to be false,  incorrect,  or misleading in any
substantial and material respect as of the date when made.

               2. In the event that the Mortgagor  shall have failed to make any
payment of any  installment  due on the Note within the applicable  grace period
set forth  therein,  if any, or in the event of any default under the Note or in
any other writing used in connection therewith or herewith.

               3. In the event  that the  Mortgagor  shall  have  failed to duly
observe any  covenant,  condition  or  agreement  with respect to the payment of
monies on the part of  Mortgagor,  to be observed or  performed  pursuant to the
terms of the  Mortgage,  the Note or any other loan  document,  and such default
shall  have  remained  uncured  for a period of thirty  (30) days  after  notice
thereof to the Mortgagor by the Mortgagee.

               4. In the event the  Mortgagor  shall have failed to duly observe
or perform any covenant,  condition or agreement on the part of the Mortgagor to
be observed or performed pursuant to the terms of the Mortgage,  the Note or any
other loan document, other than the payment of monies which shall be governed by
paragraphs 2 and 3 above,  and such default  shall have  remained  uncured for a
period  of  thirty  (30) days  after  notice  thereof  to the  Mortgagor  by the
Mortgagee.

               5. In the event  that the  Mortgagor  shall have  applied  for or
consented to the appointment or a custodian, receiver, trustee, or liquidator of
all or substantial  part of its assets;  or shall generally be unable to pay its
debts when due; or shall have  admitted,  in writing,  its  inability to pay its
debts as they mature; or shall have made a general assignment for the benefit of
its creditors;  or shall have a petition or an answer seeking  reorganization or
an  arrangement  with  its  creditors  or  shall  have  taken  advantage  of any
insolvency  law,  or shall  have  submitted  an answer  admitting  the  material
allegations  of  a  petition  in  bankruptcy,   reorganization,   or  insolvency
proceedings;  or an order,  judgment or decree shall have been entered,  without
the application, approval or consent of the Mortgagor, by any Court of competent
jurisdiction  approving a petition seeking  reorganization of the Mortgagor,  or
appointing a custodian,  receiver,  trustee or liquidator of the Mortgagor, or a
substantial  part of its assets and such order,  judgment  or decree  shall have
continued  unstayed and in effect for any period of sixty (60) consecutive days;
or shall have  failed to remove an  involuntary  petition  in  bankruptcy  filed
against it within  sixty (60) days of the  filing  thereof;  or if any order for
Relief  shall have been  entered  under the Federal  Bankruptcy  Code of 1978 as
amended.
<PAGE>
               6. In the event of a subsequent  encumbrance  of or any change in
the  ownership of the  Mortgaged  Premises.


               7. In the  event  that  the   Mortgagor  shall  have  encumbered,
mortgaged  or given a security  interest  in any fixture or  fixtures,  or shall
have, without the consent of the Mortgagee, removed or replaced fixtures.

               8.  In the  event  that  default  is  made  in any of the  terms,
covenants and  conditions  contained in any other  mortgage  constituting a lien
upon the  Mortgaged  Premises,  or  should  proceedings  be  instituted  for the
foreclosure  or  collection  of  any  mortgage,   judgment,  or  lien  prior  or
subordinate to the lien of this Mortgage, affecting the Mortgaged Premises.

               9. In the  event  that any  insurance  company  authorized  to do
business in the State of New Jersey by the Department of Insurance, shall refuse
to  insure  said  Mortgaged  Premises  in the  form of  policy  approved  by the
Mortgagee,  so that there no longer exist  insurance  coverage in a sum equal to
the full insurable value of the Mortgaged Premises.

               10. In the event that the  Mortgagor  shall have entered into any
secondary  financing of the  Mortgaged  Premises or shall have  consented to the
placing of any lien on the Mortgaged Premises,  whether or not such financing or
lien is prior to or subordinate to the lien of the Mortgage.

               11. In the event that the  Mortgagor  shall have  transferred  or
caused to have been  transferred,  title to or possession of the interest in the
Mortgaged  Premises,  or any part hereof, to any party without the express prior
written consent of the Mortgagee.

               12.  In the  event  that  the  Mortgagor  shall  have  caused  or
permitted a security interest,  perfected or otherwise,  other than the security
interest  specifically  provided for or permit  hereunder,  to be created in any
collateral  provided  for  hereby,  or shall  have  failed  to take  any  action
requested by the Mortgagee to perfect or protect the security  interest provided
for herein.

               13. In the event of the  passage  of any law  deducting  from the
value of the land for the purposes of taxation, any lien thereon, or changing in
any way the  taxation of the  mortgages  or debts  secured  thereby for state or
local purposes.
<PAGE>
               SHOULD ANY DEFAULT BE MADE BY THE  MORTGAGOR,  THE  MORTGAGEE MAY
TAKE ANY OR ALL OF THE FOLLOWING ACTIONS, AT THE SAME OR AT DIFFERENT TIMES:

               1.  Declare the entire  amount of unpaid  principal,  accrued and
unpaid  interest  and other money due under this  Mortgage  and the Note secured
hereby, immediately due and payable.

               2. All rents,  issues and  profits  collected  or received by the
Mortgagor shall be accepted and held for the Mortgagee in trust and shall not be
co-mingled  with the funds and property of the  Mortgagor  but shall be promptly
paid  over  to the  Mortgagee.  The  Mortgagor  shall  pay to  the  Mortgagee  a
reasonable  rental for the Mortgaged  Premises  occupied by the Mortgagor on the
first day of each and every  month in  advance,  as a tenant from month to month
hereby  recognizing  the  Mortgagee  as  landlord;  and upon default in any such
payment,  the Mortgagor  shall vacate and surrender  possession of the Mortgaged
Premises to the Mortgagee or to any receiver, if one has been appointed,  and in
default  thereof,  the  Mortgagor  may  be  dispossessed  by the  usual  summary
proceedings.  The Mortgagor  agrees that this covenant shall be effective either
with or without any action being brought to foreclose this Mortgage, and with or
without the Mortgagee  having  applied for a receiver to collect the rents.  Any
such tenancy of the Mortgagor shall terminate at the option of the Mortgagee and
in any event,  upon the delivery of the Deed of any Sheriff or Master  following
foreclosure.
               3. The  Mortgagee  may  enter  upon and  take  possession  of the
Mortgaged  Premises and rent the same,  either in its name or in the name of the
owner of such property, and receive the rents, issues and profits,  thereof, and
apply the  same,  after the  payment  of the  necessary  charges  and  expenses,
including management  commissions,  on account of the debt secured hereby, being
accountable  only for such  rents and  profits as are  collected  by it while in
possession.
               4. The Mortgagee, at its option, may foreclose this Mortgage, and
upon the filing of a Complaint in  Foreclosure,  the Mortgagee shall be entitled
to the appointment of a receiver of the rents of the Mortgaged  Premises without
the necessity of proving either  inadequacy of the security or insolvency of the
Mortgagor or of any person who may be legally or  equitably  liable to pay money
secured  hereby,  and the  Mortgagor  and each such person  waive such proof and
consent to the appointment of such receiver.
<PAGE>
               5. In the event of a foreclosure sale of the Mortgaged  Premises,
the Mortgaged  Premises may, at the option of the  Mortgagee,  be sold in one or
several parcels.

               6. The Mortgagee may apply on account of the unpaid principal and
interest  thereon or on account of any  arrearages  of interest  thereon,  or on
account of any  balance due to the  Mortgagee  after a  foreclosure  sale of the
Mortgaged   Premises  whether  or  not  a  deficiency  action  shall  have  been
instituted, any unexpended monies still retained by the Mortgagee that were paid
by the  Mortgagor  to the  Mortgagee  for the payment of, or as security for the
payment  of  taxes,  assessments,  municipal  or  governmental  rates,  charges,
impositions,  liens, water or sewer rents, or insurance premiums,  if any, or in
order to secure the performance of some act by the Mortgagor.

                                  MISCELLANEOUS

               1. The rights and  remedies  herein  expressed to be vested in or
conferred upon the Mortgagee shall be cumulative and shall be in addition to and
not in substitution for or in derogation of the rights and remedies conferred by
any applicable  law. The failure,  at any one or more times, of the Mortgagee to
assert the right to declare the  principal  indebtedness  due or the granting of
any  extension or  extensions of time of payment of the Note either to the maker
thereof or to any other person,  or taking of other or  additional  security for
the payment thereof, or releasing any security,  or changing any of the terms of
the within Mortgage, or the Note or other obligation accompanying this mortgage,
or waiver of or failure to exercise any right under any covenant or  stipulation
herein contained shall not in any way affect this Mortgage nor the rights of the
Mortgagee  hereunder nor operate as a release from any personal  liability  upon
the Note or other obligation  accompanying this Mortgage, nor under any covenant
or stipulation  therein contained,  nor under any agreement assuming the payment
of said Note or obligation.

                2. All notices to be given hereunder shall be given by certified
mail directed to the Mortgagor or to the Mortgagee at the addresses shown at the
head of this Mortgage.

                3. All of the terms, covenants, provisions and conditions herein
contained shall be for the benefit of, apply to, and bind the heirs,  executors,
administrators,  successors, and assigns of the Mortgagor and the Mortgagee, and
are intended and shall be held to be real  covenants  running with the land, and
the term  "Mortgagor"  shall  also  include  any and all  subsequent  owners and
successors in title of the Mortgaged Premises.
<PAGE>
                4. All  references  herein to "Note"  shall be construed to mean
"Bond" or any other evidence of indebtedness secured hereby.

                5. when such  interpretation  is appropriate,  any word denoting
gender used herein shall include all persons,  natural or artificial,  and words
used in the singular shall include the plural.

                6. This Mortgage,  the loan made hereunder and the rights of the
parties  shall be governed by and  construed  under the laws of the State of New
Jersey.

                IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be
duly executed as of the day and year first above written.


Attest:                                     Unigene Laboratories, Inc.




-------------------------                   By ----------------------
Ronald S. Levy, Secretary                   Warren P. Levy, President
(Seal)
<PAGE>
STATE OF NEW JERSEY

                      )
                      ) ss:
COUNTY OF             )

               I certify that on    1999 Ronald S. Levy  personally  came before
me and this person acknowledged under oath, to my satisfaction, that:

              (a)  this person is the Secretary of Unigene  Laboratories,  Inc.,
                   the corporation named in this document;

              (b)  this person is the  attesting  witness to the signing of this
                   document by the proper corporate  officer who is Warren Levy,
                   the President of the corporation;

              (c)  this document was signed and delivered by the  corporation as
                   its voluntary act duly  authorized by a proper  resolution of
                   its Board of Directors;

              (d)  this person  knows the proper seal of the  corporation  which
                   was affixed to this document; and

              (e)  this person signed this proof to attest to the truth of these
                   facts.

                                                            --------------------
                                                            Ronald S. Levy
         Sworn and subscribed to before me
         this     day of             1999

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