Exhibit 10.2

 

Date: January 26, 2009

$500,000.00

 

SECOND AMENDED AND RESTATED
REVOLVING NOTE

 

      For value received IGI Laboratories, Inc. (f/k/a IGI, Inc.), a Delaware
corporation with an address of 105 Lincoln Avenue, Buena, New Jersey 08310
("Borrower"), promises to pay to the order of Pinnacle Mountain Partners, LLC, a
New Hampshire limited liability company, with an address of 206 Pinnacle Road,
South Lyndeborough, New Hampshire 03082 (together with its successors and
assigns, "Lender"), on July 31, 2009, the principal amount of Five Hundred
Thousand Dollars and Zero Cents ($500,000.00), or if less, such amount as may be
the aggregate unpaid principal amount of all loans or advances made by Lender to
Borrower pursuant hereto, together with interest from the date hereof on the
unpaid principal balance of such amounts from time to time outstanding until
paid in full, all in accordance with the terms of the Loan and Security
Agreement dated January 29, 2007 (as amended from time to time, the "Loan and
Security Agreement"). The aggregate principal balance outstanding shall bear
interest thereon at a per annum rate equal to Eight and One-Half Percent (8.5%).
All accrued and unpaid interest shall be payable monthly in arrears on the first
of each month, commencing on March 1, 2007.

 

      Principal and interest shall be payable at Lender's address above or at
such other place as Lender may designate in writing, in immediately available
funds in lawful money of the United States of America without set-off, deduction
or counterclaim. Interest shall be calculated on the basis of actual number of
days elapsed in a 360-day year.

 

      This Note is a revolving note and, subject to the foregoing and in
accordance with the provisions hereof and of any and all other agreements
between Borrower and Lender related hereto, Borrower may, at its option, borrow,
pay, prepay and reborrow repeatedly hereunder at any time prior to July 31,
2009; provided, however, that in any event the principal balance outstanding
hereunder shall at no time exceed the face amount of this Note. Notwithstanding
the foregoing, this Note may be extended beyond July 31, 2009, for an additional
term by the written agreement of the parties. This Note shall continue in full
force and effect until all obligations and liabilities evidenced by this Note
are paid in full and Lender is no longer obligated to extend financial
obligations to Borrower, even if, from time to time, there are no amounts
outstanding with respect to this Note.

 

      Any payments received by Lender on account of this Note shall, at Lender's
option, be applied first to accrued and unpaid interest; second, to the unpaid
principal balance hereof; third, to any costs, expenses or charges then owed to
Lender by Borrower; and the balance to escrows, if any.

 

      If pursuant to the terms of this Note, Borrower is at any time obligated
to pay interest on the principal balance at a rate in excess of the maximum
interest rate permitted by applicable law for the loan evidenced by this Note,
the applicable interest shall be immediately reduced to such maximum rate and
all previous payments in excess of the maximum rate shall be

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deemed to have been payments in reduction of principal and not on account of the
interest due hereunder.

 

      Borrower represents to Lender that the proceeds of this Note will not be
used for personal, family or household purposes or for the purpose of purchasing
or carrying margin stock or margin securities within the meaning of Regulations
U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224.

 

      Borrower and each endorser and guarantor hereof grant to Lender a
continuing lien on and security interest in any and all assets of Borrower
unencumbered as of September 30, 2006, as further set forth in the Loan and
Security Agreement.

 

      No delay or omission on the part of Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right of
Lender, nor shall any delay, omission or waiver on any one occasion be deemed a
bar or waiver of the same or any other right on any future occasion. Borrower
and every endorser or guarantor of this Note, regardless of the time, order or
place of signing, waives presentment, demand, protest, notice of intent to
accelerate, notice of acceleration and all other notices of every kind in
connection with the delivery, acceptance, performance or enforcement of this
Note and assents to any extension or postponement of the time of payment or any
other indulgence, to any substitution, exchange or release of collateral, and to
the addition or release of any other party or person primarily or secondarily
liable and waives all recourse to suretyship and guarantor defenses generally,
including any defense based on impairment of collateral.

 

      Borrower and each endorser and guarantor of this Note shall indemnify,
defend and hold Lender and its directors, officers, shareholders, agents and
attorneys harmless against any claim brought or threatened against Lender by
Borrower, by any endorser or guarantor, or by any other person (as well as from
reasonably attorneys' fees and expenses in connection therewith) on account of
Lender's relationship with Borrower or any endorser or guarantor hereof (each of
which may be defended, compromised, settled or pursued by Lender with counsel of
Lender's selection, but at the expense of Borrower and any endorser and/or
guarantor), except for any claim arising out of Lender's gross negligence or
willful misconduct.

 

      Borrower and each endorser and guarantor of this Note agree to pay costs
(which shall be added to principal) of collection of all amounts under this Note
including, without limitation, principal and interest, or in connection with the
enforcement of, or realization on, any security for this Note, including,
without limitation, to the extent permitted by applicable law, reasonable
attorneys' fees and expenses. While an Event of Default (as defined in the Loan
and Security Agreement), is continuing, interest shall accrue at a rate per
annum equal to the aggregate of two (2) percent plus the rate provided for
herein. If any payment due under this Note is unpaid for ten (10) days or more,
Borrower shall pay, in addition to any other sums due under this Note (and
without limiting Lender's other remedies on account thereof), a late charge
equal to the greater of $35.00 or two (2) percent of such unpaid amount.

 

      This Note shall be binding on Borrower and each endorser and guarantor
hereof and upon their respective heirs, successors, assigns and legal
representatives, and shall inure to the benefit of Lender and its successors,
endorsees and assigns.

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      The liabilities of Borrower and any endorser or guarantor of this Note are
joint and several, provided, however the release by Lender of Borrower or any
one or more endorsers or guarantors shall not release any other person obligated
on account of this Note. Any and all present and future debts of Borrower to any
endorser or guarantor of this Note are subordinated to the full payment and
performance of all present and future debts and obligations of Borrower to
Lender. Each reference in this Note to Borrower, any endorser, and any
guarantor, is to such person individually and also to all such persons jointly.
No person obligated on account of this Note may seek contribution from any other
person also obligated, unless and until all liabilities, obligations and
indebtedness to Lender of the person from whom contribution is sought have been
satisfied in full. The release or compromise by Lender of any collateral shall
not release any person obligated on account of this Note.

 

      Borrower and each endorser and guarantor of this Note each authorizes
Lender to complete this Note if delivered incomplete in any respect. A
photographic or other reproduction of this Note may be made by Lender, and any
such reproduction shall be admissible in evidence with the same effect as the
original in any judicial or administrative proceeding, whether or not the
original is in existence.

 

      Borrower will, from time to time, execute and deliver to Lender such
documents, and take or cause to be taken, all such further action, as Lender may
request in order to effect and confirm or vest more securely in Lender all
rights contemplated by this Note or any other loan documents related thereto
(including, without limitation, to correct clerical or typographical errors) or
to vest more fully in or assure to the Lender the security interest in any
collateral securing this Note or to comply with applicable statute or law.

 

      Borrower and each endorser and guarantor of this Note each irrevocably
submits to the nonexclusive jurisdiction of any Federal or State court sitting
in New Jersey, over any suit, action or proceeding arising out of or relating to
this Note. Each of the Borrower and any endorser and guarantor irrevocably
waives, to the fullest extent allowed by applicable law, any objection it may
now or hereafter have to the laying of venue of any such suit, action or
proceeding brought in any such court and any claim that the same has been
brought in an inconvenient forum. The laws of the State of New Jersey shall
govern this Note.

 

      Borrower, each endorser and guarantor and Lender each hereby knowingly,
voluntarily and intentionally, and after an opportunity to consult with legal
counsel, (A) waives any and all rights to a trial by jury in any action or
proceeding in connection with this Note, any of the obligations of Borrower,
each endorser and guarantor to Lender, and all matters contemplated hereby and
documents executed in connection herewith, and (B) agrees not to seek to
consolidate any such action with any other action in which a jury trial can not
be, or has not been, waived. Borrower, each endorser and guarantor and Lender
each certifies that neither Lender nor any of its representatives, agents or
counsel has represented, expressly or otherwise, that Lender would not in the
event of any such proceeding seek to enforce this waiver of right to trial by
jury.

 

      This Note evidences and constitutes the restatement, renewal and
modification of that certain Revolving Note dated January 29, 2007 from Borrower
to Lender in the original principal amount of $1,000,000.00, which was
subsequently restated, renewed and modified as

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set forth in that certain Amended and Restated Revolving Note dated July 29,
2008 in the principal amount of $500,000, issued pursuant to the Loan and
Security Agreement (the "Original Note"). The execution and delivery of this
Note shall not in any circumstances be deemed to have terminated, extinguished,
released or discharged Borrower's indebtedness under the Original Note, which
indebtedness and the collateral security therefor shall continue under and be
governed by this Note and the Loan and Security Agreement. This Note shall, for
all purposes, be deemed the "Note" in connection with any of the documents
executed and delivered in connection with or pursuant to the Original Note.

 

[signature page attached]

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      EXECUTED as of January 26, 2009.

   

BORROWER: IGI LABORATORIES, INC.

   

By:

/s/ Rajiv Mathur

   

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

 

Name:

Rajiv Mathur

 

Title:

President and CEO

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