UNIGENE LABORATORIES, INC. AMENDED AND RESTATED SECURED PROMISSORY NOTE

Exhibit 10.7

This instrument and the rights, remedies and obligations evidenced hereby are subordinate in the manner and to the extent set forth in that certain Affiliate Subordination Agreement (as amended, restated, modified or supplemented from time to time, the “ Subordination Agreement ”) dated as of September 30, 2008, by and among Jay Levy, Jaynjean Levy Family Limited Partnership, Unigene Laboratories, Inc. and Victory Park Management, LLC, to the Senior Debt (as defined in the Subordination Agreement); and each holder of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.

UNIGENE LABORATORIES, INC.

AMENDED AND RESTATED

SECURED PROMISSORY NOTE

FOR VALUE RECEIVED Unigene Laboratories, Inc., a Delaware corporation (the “Company” ), promises to pay to Jaynjean Levy Family Limited Partnership, a Delaware limited partnership (the “Holder” ), or its registered assigns, the principal sum of Seven Million, Four Hundred Eighteen Thousand, Eight Hundred Three and 00/100 Dollars ($7,418,803.00), or such lesser amount as shall equal the outstanding principal amount hereof, together with interest from May 10, 2007 on the unpaid principal balance at a rate equal to nine percent (9.00%) per annum, which shall be non-compounding, computed on the basis of the actual number of days elapsed and a year of 365 days. All unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earlier of (i) February 10, 2015 (the “ Maturity Date ”), or (ii) when, upon or after the occurrence of an Event of Default (as defined below), such amounts are declared due and payable by the Holder or made automatically due and payable in accordance with the terms hereof. This Note is issued pursuant to that certain Patent Security Agreement, dated as of March 31, 2001 (as amended, restated, modified or supplemented from time to time, the “Security Agreement” ), made and entered into by and between the Company and Jay Levy, an individual (“ JL ”), which was then transferred from JL to the Holder on February 15, 2005 when JL assigned to the Holder the promissory notes secured by such Security Agreement, and which was further amended on May 10, 2007 by that certain Third Amendment to Patent Security Agreement made and entered into by and between the Company and the Holder. The Prior Note (as defined below) replaced in their entirety those notes listed on Exhibit A hereto and was not intended to be a novation of said notes, but rather evidenced and documented the continuation of all obligations and liabilities outstanding thereunder, including, without limitation, principal, interest, penalties and fees, as more fully described herein.

THE OBLIGATIONS DUE UNDER THIS NOTE ARE SECURED BY THE SECURITY AGREEMENT. ADDITIONAL RIGHTS OF HOLDER ARE SET FORTH IN THE SECURITY AGREEMENT.

The following is a statement of the rights of the Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, agrees:

1. Amendment and Restatement . Effective as of the date hereof, this Note amends and restates in its entirety the Secured Promissory Note dated May 10, 2007 (the “ Prior Note ”) issued by the Company to the Holder in the principal amount of Seven Million, Four Hundred Eighteen Thousand, Eight Hundred Three and 00/100 Dollars ($7,418,803.00). This Note (a) is made in substitution for, and not as payment of, the obligations of the Company under the Prior Note and (b) is not intended to constitute a novation or discharge of the Prior Note. On and after the date hereof, all principal of, and accrued but unpaid interest on, the Prior Note (i) shall remain outstanding under this Note and (ii) shall be governed by the terms of this Note and the Security Agreement.

2. Definitions . As used in this Note, the following capitalized terms have the following meanings:

(a) “Affiliate” with respect to any Person, means (i) any director or officer of such Person, (ii) any Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person, and (iii) any Person beneficially owning or holding 5% or more of any class of voting securities of such Person or any corporation of which such Person beneficially owns or holds, in the aggregate, 5% or more of any class of voting securities. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(b) “Business Day ” means any day other than a Saturday, Sunday or public holiday under the laws of the United States of America or the State of New Jersey or any other day on which banking institutions are authorized or obligated to close in the State of New Jersey.

(c) “Change in Control ” means any of the following: (i) any Person, either individually or acting in concert with one or more other Persons, shall have acquired beneficial ownership, directly or indirectly, of stock or other securities of the Company (or other securities convertible into stock or other securities) representing 50% or more of the combined voting power of all stock or other securities of the Company entitled to vote in the election of members of the board of directors of the Company, other than stock or other securities having such power only by reason of the happening of a contingency; or (ii) the occurrence of a change in the composition of the board of directors of the Company such that a majority of the members thereof are not continuing members. As used herein, (a) the term “beneficially own” or “beneficial ownership” shall have the meaning set forth in the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder and (b) the term “continuing member” shall mean, as of any date of determination, any member of the board of directors of the Company who (i) was a member of such board on the date of this Note or (ii) was nominated for election or elected to such board with the affirmative vote of a majority of the members who were either members of such board on the date of this Note or whose nomination or election was previously so approved.

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(d) “Company ” means the corporation initially executing this Note and any Person which shall succeed to or assume the obligations of the Company under this Note in accordance with the terms hereof

(e) “Event of Default” has the meaning given in Section 6 hereof.

(f) “First Quarterly Payment” has the meaning given in Section 3(a) of this Note.

(g) “Holder ” means the Person specified in the first paragraph of this Note or any Person who shall at the time be the registered holder of this Note pursuant to a transfer permitted by the terms of this Note.

(h) “Indebtedness ” means the aggregate amount of, without duplication (i) all obligations for borrowed money, (ii) all obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations to pay the deferred purchase price of property or services (other than accounts payable incurred in the ordinary course of business), (iv) all obligations with respect to capital leases, (v) all obligations created or arising under any conditional sale or other title retention agreements with respect to property acquired by such Person, (vi) all reimbursement and other payment obligations, contingent or otherwise, in respect of letters of credit and similar surety instruments, (vii) all payment obligations, contingent or otherwise, pursuant to or arising under currency swap agreements, interest rate swap agreements or other swap or derivative agreements, and (viii) all guaranty obligations with respect to the types of Indebtedness listed in clauses (i) through (vii) above.

(i) “Initial Interest Component” has the meaning set forth in Section 3(b)(ii) of this Note.

(j) “Lien ” means, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional sale agreement, capital lease or other title retention agreement, or any agreement to provide any of the foregoing, and the filing of any financing statement or similar instrument under the Uniform Commercial Code or comparable law of any jurisdiction.

(k) “Maturity Date” has the meaning set forth in the first paragraph of this Note.

(l) “Obligations ” means all loans, advances, debts, liabilities and obligations, howsoever arising, owed by the Company to the Holder of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), now existing or hereafter arising under or pursuant to the terms of this Note and the other Transaction Documents, including, all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by the Company hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or

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to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U. S. C. Section 101 et seq .), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding.

(m) “Ongoing Interest Component” has the meaning set forth in Section 3(c)(iii) of this Note.

(n) “Permitted Distribution ” means: (i) repurchases of stock from employees, consultants or directors of the Company in an aggregate amount not to exceed $50,000 in any fiscal year; provided that no Event of Default has occurred and is continuing or would exist after giving effect to the repurchases; (ii) dividends or distributions payable solely in capital stock of the Company; and (iii) any dividend or distribution made by any Subsidiary to another Subsidiary or to the Company.

(o) “Permitted Indebtedness ” means: (i) Indebtedness of the Company existing on May 10, 2007 as set forth on Schedule A (it being understood that any Indebtedness of the Company existing on May 10, 2007 shall constitute Permitted Indebtedness whether or not listed on Schedule A ), and any renewals, refinancings, replacements and extensions thereof; so long as (A) the principal amount of such Indebtedness does not exceed the principal amount being renewed, refinanced, replaced or extended plus an amount necessary to pay any fees and expenses related thereto, (B) such Indebtedness does not contain covenants or other restrictions materially more onerous than those contained in the Indebtedness being renewed, refinanced, replaced or extended, and (C) the average life to maturity thereof is greater than or equal to that of the Indebtedness being renewed, refinanced, replaced or extended; (ii) other unsecured Indebtedness of the Company or any of its Subsidiaries in an aggregate principal amount at any time outstanding not to exceed $2,000,000; (iii) Indebtedness of the Company or any of its Subsidiaries secured by Liens described in clauses (vi) and (vii) of the definition of Permitted Liens, so long as (A) at the time when such Indebtedness is incurred, the amount of such Indebtedness does not exceed the fair market value (as reasonably determined by the principal financial officer of the Company in good faith) of the leased property or purchased equipment and (B) the aggregate amount of such Indebtedness does not exceed $500,000 at any time outstanding; (iv) Indebtedness of any Subsidiary of the Company to the Company or another Subsidiary; (v) Indebtedness pursuant to or arising under currency swap agreements or interest rate swap agreements or swap or derivative agreements entered into in connection with bona fide hedging arrangements; (vi) Indebtedness of the Company or any of its Subsidiaries subordinated to the Obligations on terms reasonably satisfactory to the Holder, and having terms and conditions (other than interest and overall yield) more favorable to the Company than the terms and conditions of this Note and the other Transaction Documents (including, without limitation, covenants and events of default more favorable to the Company than the covenants and events of default hereunder), and having redemption, prepayment and defeasance provisions reasonably satisfactory to the Holder, in an aggregate principal amount not to exceed $2,000,000 at any time outstanding less any amounts outstanding pursuant to clause (ii) of this definition of Permitted Indebtedness ( “Subordinated Indebtedness” ); (vii) Senior Debt; and (viii) the Obligations.

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(p) “Permitted Liens ” means the following types of Liens (excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code, as amended, or by the Employee Retirement Income Security Act of 1974, as amended, or any Lien imposed by a governmental authority under any applicable environmental law or with respect to a foreign deferred compensation plan): (i) Liens for taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being contested in good faith, provided provision is made to the reasonable satisfaction of the Holder for the eventual payment thereof if subsequently found payable; (ii) Liens of carriers, warehousemen, mechanics, materialmen, vendors, and landlords incurred in the ordinary course of business for sums not overdue or being contested in good faith, provided provision is made to the reasonable satisfaction of the Holder for the eventual payment thereof if subsequently found payable; (iii) deposits under workers’ compensation, unemployment insurance and social security laws or to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or to secure statutory obligations of surety or appeal bonds or to secure indemnity, performance or other similar bonds in the ordinary course of business; (iv) easements, reservations, rights of way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances affecting real property in a manner not materially or adversely affecting the value or use of such property; (v) Liens in favor of the Holder; (vi) Liens securing obligations under a capital lease so long as such Liens do not extend to property other than the property leased under such capital lease, and any additions, attachments, improvements and accessions thereto and replacements, substitutions and proceeds (including insurance proceeds) thereof; (vii) Liens upon any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment, so long as such Lien extends only to the equipment financed, and any additions, attachments, improvements and accessions thereto and replacements, substitutions and proceeds (including insurance proceeds) thereof; (viii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of customs duties in connection with the importation of goods; (ix) Liens which constitute rights of setoff of a customary nature or banker’s liens, whether arising by statute, common law or by contract; (x) Liens on insurance proceeds in favor of insurance companies granted solely as security for financed premiums; (xi) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 6(g); (xii) Liens existing on May 10, 2007 as set forth on Schedule B (it being understood that any Lien of the Company existing on May 10, 2007 shall constitute a Permitted Lien whether or not listed on Schedule B ) and any renewals, refinancings or extensions thereof that do not increase the amount of Indebtedness secured thereby or encumber additional collateral or contain covenants or other restrictions materially more onerous than those contained in the Lien being renewed, refinanced or extended, including, without limitation, that certain Third Modification of Mortgage and Security Agreement, entered into on the date hereof by the Company in favor of JL (as may be amended and/or restated from time to time); (xiii) leases or subleases and licenses or sublicenses granted in the ordinary course of the Company’s or any Subsidiary’s business; (xiv) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property; and (xv) Liens incurred pursuant to the Senior Debt Documents.

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(q) “Person ” means an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental authority.

(r) “Principal Component” has the meaning set forth in Section 3(b)(i) of this Note.

(s) “Prior Note” has the meaning set forth in Section 1 of this Note.

(t) “Quarterly Payment” has the meaning set forth in Section 3(a) of this Note.

(u) “Revised Payment Schedule” has the meaning set forth in Section 4(c) of this Note.

(v) “Security Agreement ” has the meaning set forth in the first paragraph of this Note.

(w) “Senior Debt” has the meaning assigned to such term in the Subordination Agreement (and any defined terms therein shall have the meanings ascribed to such terms in the Subordination Agreement), and any refinancing thereof under the VPC Loan Documents (as defined in the Subordination Agreement).

(x) “Senior Debt Documents ” has the meaning assigned to such term in the Subordination Agreeme