Exhibit 10.110

                             SEVERANCE AGREEMENT
                             -------------------

      THIS AGREEMENT ("Agreement") is made by and between IGI, INC. ("IGI"),
a Delaware corporation, with its principal place of business at 105 Lincoln
Avenue, Buena, New Jersey 08310, and DOMENIC N. GOLATO ("Golato") residing at
7 False Heather Way, Medford, New Jersey 08055.

                                  RECITALS

      WHEREAS, Golato was employed by IGI as its Chief Financial Officer
and Senior Vice President from June 26, 2000 to June 30, 2004 (referred to
as "Golato's Employment"); and

      WHEREAS, Golato's Employment was pursuant to and governed by the
terms of an Employment Agreement between Golato and IGI dated August 31,
2000 with a retroactive effective date of June 26, 2000 (referred to as the
"Employment Agreement"), a true and accurate copy of which is annexed
hereto as Exhibit A and made a part of this Agreement as if set forth at
length herein; and

      WHEREAS, the initial term of Golato's employment under the Employment
Agreement was for a period of one year, from June 30, 2000 to June 30,
2001, subject on each June 30, beginning June 30, 2001, to an automatic
extension for an additional year unless either party gives written notice
of non-extension no later than the proceeding April 30; and

      WHEREAS, in accordance with the provisions of the Employment
Agreement, the term thereof was automatically extended without any notice
by either party of non-extension for an additional 3 years from June 30,
2001 to June 30, 2002, June 30, 2002 to June 30, 2003, and from June 30,
2003 to June 30, 2004;

      WHEREAS, on April 26 2004, IGI gave to Golato proper written notice
that his employment under the Employment Agreement shall terminate upon
expiration of the current term of the Employment Agreement as of the close
of business on June 30, 2004, and that the term of the Employment Agreement
would not be extended for an additional one year period (referred to as the
"IGI Expiration Notice ");

      WHEREAS, pursuant to the terms of the Employment Agreement, Golato is
entitled to receive certain severance compensation and benefits as provided
therein as a result of the termination of his employment under the
Employment Agreement by reason of the IGI Expiration Notice;


<PAGE>  1


      WHEREAS, the parties wish to resolve by this Agreement any and all
claims and/or disputes of any kind whatsoever that Golato had, has or may
have now or in the future against IGI relating to his employment with IGI,
the termination of his  employment with IGI under the Employment Agreement
and/or any other matters relating thereto; and

      WHEREAS, the parties agree that any and all payments and/or other
benefits of any kind whatsoever, if any, that Golato is or may claim to be
entitled to receive from IGI in conjunction with his employment with IGI,
his employment with IGI under the Employment Agreement and/or the
termination thereof shall be exclusively and conclusively governed by the
terms of this Agreement, and Golato agrees that in accordance with the
terms hereof he shall be forever prohibited from seeking and/or claiming
any additional compensation, benefits, damages, remedies and/or any other
payments of any kind whatsoever from IGI.

      NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt
and sufficiency of which is acknowledged by the parties hereto, IGI and
Golato agree as follows:

      1.    Incorporation of Recitals.  The Recitals set forth above are
            hereby incorporated into and made a part of this Agreement.

      2.    Effective Date.  Subject to the terms of Paragraph 15 of this
            Agreement and Golato's rights thereunder, the parties expressly
            acknowledge and agree that this Agreement shall be effective date
            as of the close of business on July 1, 2004 (the "Effective
            Date"), irrespective of the date upon which the Agreement is
            formally executed by the parties.

      3.    Employment Termination Date.  The parties expressly acknowledge
            and agree that Golato's employment with IGI is terminated as of
            the close of business on June 30, 2004.   As of the close of
            business on June 30, 2004, Golato resigns from any and all
            officerships he holds with IGI, and thereby waives, relieves,
            relinquishes, renounces and surrenders as of June 30, 2004, any
            and all rights, powers, obligations, authorities and/or benefits
            of any kind whatsoever with respect thereto.  Golato agrees to
            fully cooperate with IGI to accomplish such resignations,
            including without limitation, execution of any and all documents
            as may be necessary to effectuate such resignations.  Golato
            further agrees, warrants and represents that as of the close of
            business on June 30, 2004, and forever thereafter, he shall not
            represent and/or hold himself out as an employee, officer and/or
            director of IGI.


<PAGE>  2


      4.    Payments to Golato.

            A.    On July 1, 2004, IGI shall pay Golato for any and all
            amounts due and owing for base salary and auto allowance accrued
            as of the termination of his employment at the close of business
            on June 30, 2004 (less any and all applicable taxes,
            withholdings, contributions and other deductions).

            B.    For a period twelve (12) months commencing July 1, 2004 and
            ending June 30, 2005 (referred to as the "Severance Period"),
            Golato shall continue to receive his annual base salary of
            $168,600 and annual auto allowance of  $$7,200 (less any and all
            applicable taxes, withholdings, contributions and other
            deductions), which shall be paid by IGI to Golato in bimonthly
            installments in accordance with IGI's regular payroll practices
            as in effect at such time (referred to as the "Severance
            Benefits").  However, if at any time during the Severance Period,
            IGI receives a payment by virtue of a settlement or judgment
            entered in the pending action captioned IGI, Inc. v. U.S. Fire
            Insurance Company Affiliates, Superior Court of New Jersey, Law
            Division, Atlantic County, Docket No. ATL-L-1966-03 (referred to
            as the "Insurance Settlement"), IGI shall within five (5) days of
            its receipt of the Insurance Settlement pay to Golato in a single
            lump sum an amount equal to the balance of the Severance Benefits
            due and owing to Golato as of the date of the Insurance
            Settlement.

            C.    The parties expressly acknowledge and agree that any and
            all payments to be made by IGI to Golato under Paragraphs 4(A) &
            (B)  shall be paid, treated and reported by IGI and Golato as W-2
            income, and that Golato shall be solely responsible for the
            payment of any and all federal, state and/or local income taxes,
            penalties and/or interest with respect to thereto.

      5.    Reimbursement of Business Expenses.

            On or before July 30, 2004, Golato shall submit to IGI a final
            Business Expense Report (referred to as the "Final Expense
            Report") to request reimbursement for any and all costs,
            expenses, and/or expenditures he had incurred as of the close of
            business on June 30, 2004, in performing his employment with IGI.
            The Final Expense Report shall be submitted, reviewed,
            approved/declined and paid in accordance with IGI's rules and
            procedures relative to such matters as currently in effect as of
            June 30, 2004.


<PAGE>  3


      6.    Continuation of Health/Medical Insurance Coverage For Golato
            and Dependents.

            A.    For a period of twelve (12) months commencing July 1,
            2004 and ending June 30, 2005, IGI shall continue at its sole
            cost and expense to provide Golato and his dependents with
            health, medical, eye care and dental Insurance coverage
            benefits under the IGI, Inc. Aetna, Inc. Group Health Insurance
            Plan and/or any other employer (IGI) provided plan or policy as
            in effect at such time (referred to as the "IGI Insurance
            Benefits").  Except as provided in Paragraph 6(B) below, as of
            June 30, 2005, Golato and his dependents shall no longer be
            entitled to nor be permitted to participate in any and all
            health, medical, eye care and/or dental insurance coverage
            and/or other benefits provided under the IGI, Inc. Aetna, Inc.
            Group Health Insurance Plan and/or any under other employer
            (IGI) provided plan or policy as in effect at such time.   Any
            and all coverage and/or benefits previously afforded to Golato
            and/or his dependents thereunder shall terminate on June 30,
            2005, subject to any and all rights by Golato and/or his
            dependents to elect to continue participation therein under
            COBRA and/or any other applicable laws, and Golato and/or his
            dependents shall be solely responsible for the payment of any
            and all costs and expenses relating thereto, including, without
            limitation, premium costs and expenses for continued coverage
            under COBRA and/or any other applicable law.

      B.    In the event Golato obtains full-time employment with an
            independent third party employer at any time during the twelve
            month period commencing July 1, 2004 and ending June 30, 2005,
            and as a benefit thereof he and his dependents are provided at
            no cost with health, medical, eye care and dental insurance
            coverage under the employer's sponsored plans or policies
            (referred to as the "New Insurance Plan"), and prior to June
            30, 2005, full coverage becomes effective for Golato and his
            dependents under the New Insurance Plan (inclusive of the
            expiration of any waiting or elimination periods for
            eligibility thereunder), then IGI shall at such time be
            relieved from any and all further obligations under Paragraph
            6(A) to provide Golato and his dependents with the IGI
            Insurance Benefits, and Golato and his dependents shall
            thereafter no longer be entitled to nor be permitted to
            participate in the IGI Insurance Benefits.  Notwithstanding the
            foregoing, nothing contained in the term of this Paragraph 6(B)
            requires or obligates Golato to obtain full-time employment
            with an independent third party at any time during the twelve
            (12) month period from July 1, 2004 to June 30, 2005, or except
            as expressly provided by the foregoing, does not effect, alter
            or eliminate Golato's entitlement to any other benefits,
            payments or compensation to be provided by IGI hereunder.


<PAGE>  4


      7.    Continuation of Life and Disability Insurance Coverage For
            Golato

            For a period of twelve (12) months commencing July 1, 2004 and
            ending June 30, 2005, IGI shall continue at its sole cost and
            expense to provide Golato with any and all life and disability
            insurance coverage and benefits under any IGI provided plan or
            policy as in effect immediately prior to the termination of
            Golato's employment as of the close of business on June 30,
            2004 (referred to as "IGI Life/Disability Insurance "). On June
            30, 2005, the IGI Life/Disability Insurances previously
            afforded by IGI to Golato for such twelve (12) month period
            shall terminate, subject to any and all rights  Golato may have
            to elect to continue participation therein under the terms of
            the IGI Life/Disability Insurance plans or policies and/or as
            otherwise permitted by applicable laws, and in which case
            Golato shall be solely responsible for the payment of any and
            all costs and expenses relating thereto, including, without
            limitation, premium costs and expenses for continued coverage
            under the IGI Life/Disability Insurance plans or policies.

      8.    Termination of 401K Plan Benefits.  In accordance with the
            terms and conditions of the IGI, Inc. 401K Retirement Savings
            Plan ("401K Plan"), Golato's eligibility to participate therein
            shall terminate as of the close of business on June 30, 2004,
            and from that date onward Golato shall not be permitted to make
            any further contributions to the 401K Plan nor is he entitled
            to any employer matching contributions made by IGI after such
            date.  Any and all account balances in the 401K Plan for the
            benefit of Golato shall be held in such account and/or
            distributed to Golato in accordance with the terms of the 401K
            Plan and notice to IGI of Golato's compliance with any and all
            requirements contained therein.  Golato shall be solely
            responsible for any and all federal, state and/or local taxes,
            penalties and/or interest that may be assessed in relation to
            any and all distributions to Golato from and under the 401K
            Plan.  Golato agrees and acknowledges that he is in possession
            of a complete and current copy of the 401K Plan and is fully
            familiar with and has been fully advised as to his rights
            thereunder.

      9.    Stock Options.

            A.    Golato is the holder of fully vested and unexercised
            stock options to purchase a total of 345,000 shares of IGI
            Common Stock (referred to as the "Options").  Golato received
            the Options during the course of his


<PAGE>  5


            employment with IGI as equity based compensation awards granted
            under the IGI, Inc. 1999 Stock Option Plan, as follows:

                  (1)   option to purchase 45,000 shares at an exercise
                        price of $0.66;

                  (2)   option to purchase 100,000 shares at an exercise
                        price of $0.52;

                  (3)   option to purchase 100,000 shares at an exercise
                        price of $0.80;

                  (4)   option to purchase 40,000 shares at an exercise
                        price of 0.50;and

                  (5)   option to purchase 60,000 shares at an exercise
                        price of $1.06.

            B.    The parties hereby acknowledge and agree that in
            accordance with the terms of the Employment Agreement, the
            Options are exercisable by Golato for a period of two (2) years
            commencing on July 1, 2004 and ending on June 30, 2006.

            C.    Except as provided in Paragraph 9(D) below, Golato agrees
            that for a period of six (6) months commencing on July 1, 2004
            and ending on January 1, 2005, he will not sell, offer to sell,
            transfer or otherwise convey any shares of IGI, Inc. common
            stock he may acquire prior to January 1, 2005, by his exercise
            of any of the Options (referred to as the "Option Restriction
            Period").  At all times subsequent to January 1, 2005, Golato
            shall be free and fully unencumbered of any obligation,
            restriction or requirement of any kind whatsoever, except as
            provided by law, to sell, offer to sell, transfer or otherwise
            convey at his sole discretion any and all shares of IGI, Inc.
            Common stock he acquired by his exercise of any of the Options.

            D.    It is expressly acknowledged and agreed that if at any
            time during the Option Restriction Period, a transaction occurs
            involving the acquisition by a third party of 35% or more of an
            equity interest of IGI at a per share price of $2.00 or more,
            IGI shall be required to offer  Golato the opportunity as part
            of the transaction to sell at his sole discretion exercised
            shares of his IGI common stock in an amount up to $100,000.
            Notwithstanding the foregoing, nothing contained in the terms
            of this Paragraph 9(D) requires or obligates Golato to
            participate in any such transaction, which shall be solely at
            the discretion of Golato.


<PAGE>  6


      10.   Return of IGI Property.  Golato represents and warrants that as
            of the Effective Date, he has returned to IGI any and all
            equipment, property, manuals, materials and/or any other
            documents belonging to IGI and/or that were provided to or came
            into Golato's possession as the result of his employment with
            IGI, including, without limitation, any and all documents that
            contain trade secrets of IGI and/or proprietary and/or
            confidential information relating to IGI and/or its business.
            Golato further represents and warrants that he has not copied,
            duplicated and/or otherwise reproduced any such manuals,
            materials, documents and/or information.  Golato expressly
            agrees that he shall not use for and/or in conjunction with any
            future business and/or employment purposes and/or disclose to
            any other individual, corporation, person, partnership (general
            or limited), limited liability company and/or other business
            entity, IGI's trade secrets and/or confidential/proprietary
            information of IGI that Golato may have acquired at any time
            during his employment with IGI, including, without limitation,
            client lists, price lists, manufacturing processes,
            manufacturing costs and business plans.

      11.   Non-Disclosure of Confidential Information.

            A.    For the purposes of and as used in Paragraph 11(B) or
            otherwise in this Agreement, the term "Confidential
            Information" shall be defined as and mean as follows:  IGI's
            trade secrets and proprietary information, as well as any and
            all information of a business and/or technical nature disclosed
            to, revealed, discovered, learned and/or developed by Golato at
            any time during and/or in the course of his employment with
            IGI, which information relates in any way whatsoever to the
            business of IGI, to the business of any customer of IGI, and/or
            to the business of any other person and/or entity which
            consults with IGI in any way whatsoever in conjunction with
            IGI's business, which such information is generally unknown in
            the industry.  Confidential Information shall include, but is
            not limited to, information and knowledge relating to IGI's
            computer and/or IT systems, programs, software, passwords
            and/or other specifications relating thereto, Novasome(r)
            technologies, formulations, manufacturing processes,
            procedures, packaging, developments, improvements, methods or
            operation, sales, pricing and profit margins, customers,
            clients credit and other financial information about IGI and/or
            IGI's customers and/or relationships between IGI and its
            customers, clients and others who have dealings with the
            Company.

            B.    Except as expressly required by law, Golato hereby agrees
            that he will not at any time whatsoever from the Effective Date
            of this Agreement and forever thereafter, without the express
            prior written consent of IGI: (1) disclose directly and/or
            indirectly any Confidential Information to any person, entity
            and/or other third-party not a


<PAGE>  7


            signatory to this Agreement; and/or (2) use directly and/or
            indirectly any Confidential Information for the benefit of
            himself and/or any other person, entity and/or other third-
            party not a signatory to this Agreement.

            C.    Golato represents and warrants that as of the Effective
            Date he has not without the prior written consent of IGI: (1)
            disclosed directly and/or indirectly any Confidential
            Information to any person, entity and/or other third-party not
            a signatory to this Agreement; and/or (2) used directly and/or
            indirectly any Confidential Information for the benefit of
            himself and/or any other person, entity and/or other third-
            party not a signatory to this Agreement.

            D.    Golato further acknowledges and agrees that any violation
            of the terms of this Paragraph 11 shall be deemed a breach of
            this Agreement entitling IGI to any and all rights and remedies
            under this Agreement, as well as any and all rights and remedies
            available at law and/or equity.

      12.   Golato Release.  Except as expressly provided in Paragraph 13
            of this Agreement, Golato, on behalf of himself and his heirs,
            executors, administrators, and assigns, does hereby remise,
            release and forever discharge IGI and its affiliates,
            subsidiaries and/or its past and present agents, attorneys,
            representatives, officers, directors, employees, successors,
            administrators, shareholders and assigns, of and from any and
            all claims, liabilities, complaints, rights, injuries, damages,
            judgments, torts, causes of action, demands, suits, debts,
            losses, costs, expenses, fees, penalties, assessments, fines
            and interest, of any kind whatsoever, whether direct or
            indirect, absolute, fixed or contingent, liquidated or
            unliquidated, past or present, known or unknown, that Golato
            had, now has or may have against IGI, its subsidiaries,
            affiliates and/or its past and present agents, attorneys,
            representatives, officers, directors, employees, successors,
            administrators, shareholders and assigns relating to or arising
            out of Golato' employment with and/or termination of employment
            with IGI and/or any other matter, including, without
            limitation, any and all rights or claims relating to or arising
            under (i) federal and/or state common law; (ii) the
            Rehabilitation Act of 1973; (iii) the Federal Age
            Discrimination in Employment Act of 1967, as amended; (iv) the
            American With Disabilities Act; (v) Title VII of the Civil
            Rights Act of 1964, as amended; (vi) the Family Leave and
            Medical Act, (vii) the Employment Retirement Income Security
            Act of 1974, as amended, (viii) any and all federal, state,
            and/or local laws, statutes, ordinances, regulations and/or
            executive orders protecting the rights against discrimination
            upon the basis of age, race, sex, national origin, religion,
            non-job related disability, sexual preference and other types
            of discrimination; (ix) New Jersey Conscientious Employee
            Protection


<PAGE>  8


            Act; (x) any and all any federal, state, and/or local laws,
            statutes, ordinances, regulations and/or executive orders
            protecting employees against sexual harassment and/or hostile
            work place environment; (xi) the Warn Act and/or any other
            similar state or federal laws, statutes, ordinances,
            regulations and/or executive orders requiring, among other
            things, advance notice to employees of certain workforce
            reductions; and (xii) any and all legal restrictions of any
            type whatsoever on IGI's right to terminate its employees,
            including Golato.  Golato also agrees not to initiate, commence
            and/or file a lawsuit and/or any other judicial, administrative
            and/or arbitration proceeding in any jurisdiction whatsoever
            against IGI, its subsidiaries, affiliates and/or its past and
            present agents, attorneys, representatives, officers,
            directors, employees, successors, administrators, shareholders
            and assigns, with respect to, relating to and/or otherwise
            seeking to assert any claim released by Golato under the terms
            of this Agreement.

      13.   Exception to Golato Release.  Notwithstanding the terms of
            Paragraph 12 above, the parties acknowledge and agree that by
            this Agreement Golato does not waive, release and/or relinquish
            (i) any and all rights and claims he may have under the Federal
            Age Discrimination in Employment Act of 1967, as amended,
            relating to events that may occur and/or facts that were made
            known to Golato after the Effective Date, or (ii) his right to
            file a charge with or cooperate in an investigation with the
            Equal Employment Opportunity Commission after the Effective
            Date.  Golato expressly represents and warrants that he has no
            knowledge of any facts or occurrences as of the Effective Date
            that would give rise to any rights and/or claims under the
            Federal Age Discrimination in Employment Act of 1967, as
            amended, and/or any right to file a charge with the Equal
            Employment Opportunity Commission.

      14.   Rights and Remedies.

            A.    In the event of a material breach of this Agreement by
            Golato, and in addition to any and all rights, remedies and
            damages available to IGI hereunder and/or otherwise by law or
            equity, IGI shall immediately and automatically be forever
            relieved from that date forward, without any further action by
            IGI, from any and all obligations to Golato under this
            Agreement, and Golato shall return any and all payments
            received under this Agreement as of such date.

            B.    Golato acknowledges and agrees that his breach of any of
            the terms and/or covenants contained in Paragraphs 9(C), 10,
            11, and/or 16(A) of this Agreement can cause irreparable damage
            to IGI for which the remedy at law would not be adequate.
            Accordingly, in addition to any other remedy available to IGI
            under this Agreement and/or as


<PAGE>  9


            otherwise provided by law or equity, IGI shall be entitled to
            injunctive relief restraining Golato from any actual or
            threatened violation of any of the terms of Paragraphs 9(C),
            10, 11, and/or 16(A) or any other appropriate decree of
            specific performance (without any bond or other security being
            required).

            C.    In the event either party is required to incur legal fees
            and/or costs in seeking enforcement of this Agreement, the
            prevailing party shall be entitled to recover from the other
            party any and all such legal fees and/or costs so incurred.

      15.   Waiting Period and Revocation Rights.  Golato represents and
            warrants that he has been advised by IGI to consult with an
            attorney prior to executing this Agreement.  Golato further
            represents and warrants that he understands that he shall have
            twenty-one (21) days from the date this Agreement has been
            executed by IGI and delivered to Golato to decide whether to sign
            this Agreement and relinquish the legal claims as provided for
            herein.  Golato further represents and warrants that he has been
            advised by IGI that he shall have a period of seven (7) days
            following his execution of this Agreement to revoke it so that it
            has no continuing or past legal effect.  Golato represents and
            warrants that he understands that to revoke this Agreement during
            such seven (7) day period he must return to IGI any and all
            payments he has received from IGI under paragraph 4(B) of this
            Agreement and provide IGI with written notice revoking the same
            and deliver such notice to IGI in accordance with the terms
            hereof prior to the expiration of the seven (7) days revocation
            period.

      16.   Non-Disparagement.

            A.    Golato agrees that neither he nor any person or entity on
            his behalf shall, directly or indirectly, make, orally or in
            writing, any comments, statements, and/or remarks of any kind
            whatsoever that are factually inaccurate and disparaging to IGI,
            its business, and/or its affiliates, subsidiaries and/or its
            past and present agents, attorneys, representatives, officers,
            directors, employees, administrators, and/or shareholders.
            Golato further acknowledges and agrees that any violation of the
            terms of this Paragraph 16(A) shall be deemed a material breach
            of this Agreement, entitling IGI to any and all rights and
            remedies hereunder, as well as otherwise available at law or
            equity.

            B.    IGI agrees that neither it nor any person or entity on its
            behalf shall, directly or indirectly, make, orally or in writing,
            any comments, statements, and/or remarks of any kind whatsoever
            that are factually inaccurate and disparaging to Golato.  Unless
            otherwise mutually agreed in writing by IGI and Golato, in the
            event IGI is contacted by a third-party


<PAGE>  10


            for a recommendation and/or any other information related to
            Golato' employment with IGI and/or the termination thereof, IGI
            shall not provide any information and/or make any statements in
            response thereto other than confirmation of the position held by
            Golato at IGI and the dates of employment.  Irrespective of the
            foregoing, Golato acknowledges and agrees that nothing contained
            herein requires IGI to provide any information, statements and/or
            recommendations to any inquiring third-party other than that
            which is expressly set forth in this Paragraph 16(B).

            C.    IGI shall obtain Golato's prior approval, which shall not
            be unreasonably withheld, to any and all written documents to be
            filed with any governmental body or other regulatory authority,
            including the Securities and Exchange Commission and the American
            Stock Exchange, or otherwise released or disseminated to the
            public, wherein the termination or cessation of Golato's
            employment with IGI is discussed, addressed or referenced in any
            manner whatsoever.  IGI shall provide Golato with a draft of any
            document subject to the terms of this Paragraph 16(C) at least
            two (2) business days prior to its intended filing, release or
            other dissemination.

      17.   New Jersey Law Governs.  This Agreement shall be executed,
            governed, enforced, construed and interpreted in accordance
            with the laws of the State of New Jersey.  The parties hereto
            consent to the exclusive jurisdiction of the state and federal
            courts of New Jersey for the judicial resolution of any and all
            disputes that may arise under this Agreement, including without
            limitation enforcement of this Agreement and damages relating
            to a breach thereof.

      18.   Entire Agreement.  This Agreement incorporates the
            understandings and agreements of the parties hereto, and each
            party acknowledges that in executing this Agreement they are
            not relying upon prior written or oral discussions or
            statements made by either party.  This Agreement contains the
            entire understanding of the parties hereto and there are no
            representations, warranties, covenants or undertakings other
            than those expressly set forth herein.  Except as expressly
            provided for in this Agreement, Golato acknowledges and agrees
            that he shall not be entitled to receive from IGI, nor shall
            IGI be required to pay and/or provide Golato, with any
            benefits, monetary amounts, stock options, health, medical,
            life and/or disability insurance coverage, auto allowance
            and/or compensation of any kind whatsoever, by virtue of,
            under, relating to and/or with respect to Golato's employment
            with IGI, the Employment Agreement and/or the termination of
            Golato's employment with IGI.


<PAGE>  11


      19.   Modification/Waiver.  A modification or waiver of any of the
            provisions of this Agreement shall be effective only if made in
            writing and executed by the parties with the same formality as
            this Agreement.  The failure of any party to insist upon strict
            performance of any of the provisions of this Agreement shall
            not be construed as a waiver, release and/or discharge of any
            subsequent default and/or breach of the same or similar nature.

      20.   Product of Negotiations.  This Agreement is the product of
            negotiations between the parties and shall be construed
            neutrally, without regard to the identity of the party who drew
            it.

      21.   Headings.  The parties expressly acknowledge and agree that
            paragraph headings contained in this Agreement are for
            convenience purposes only and shall not be considered part of
            the terms and conditions of the Agreement.

      22.   Interpretation Provisions.   All references in this Agreement
            to the plural shall also mean the singular and to the singular
            shall also mean the plural unless the context otherwise
            requires.  The words "hereof", "herein", "hereunder", "this
            Agreement", "the Agreement" and words of similar import when
            used in this Agreement shall refer to this Agreement as a whole
            and not any particular provision of this Agreement unless the
            context otherwise requires.  The word "including" when used in
            this Agreement shall mean "including, without limitation".
            "And" and "or" as used in this Agreement shall be interpreted
            conjunctively and shall not be interpreted disjunctively to
            exclude any information otherwise within the scope thereof.

      23.   Invalid or Unenforceable Provisions.  In the event any
            provision of this Agreement shall be determined to be invalid
            or unenforceable in any respect, the remaining provisions of
            this Agreement shall not be affected thereby and shall continue
            in full force and effect.

      24.   Parties Bound.  This Agreement shall be binding upon the
            parties hereto and their respective heirs, successors and
            assigns.

      25.   Legal Advice of Counsel.  The parties have obtained legal advice
            concerning this Agreement from the attorneys of their own
            choosing and have not relied on anything the other party or the
            other party's attorneys have said in deciding to sign this
            Agreement.


<PAGE>  12


      26.   Voluntary Agreement.  Golato represents and warrants that he has
            read and fully understands the terms of this Agreement.  Golato
            further represents and warrants that he has executed this
            Agreement voluntarily without coercion, undue influence or
            duress, with full knowledge of the nature, consequences and legal
            effect of this Agreement.  Golato further acknowledges and agrees
            that the terms hereof are a fair and adequate resolution of any
            and all claims, if any, he may have against IGI relating to his
            employment with IGI and/or the termination of his employment with
            IGI.

      27.   Notices.  Any and all notices required and/or permitted to be
            given under this Agreement to be effective must be sent via hand-
            delivery or via Federal Express or other reliable overnight
            delivery service to the addresses set forth below, unless
            otherwise advised in writing by the other party in accordance
            with the terms hereof of a change of address.  Any and all
            notices under this Agreement shall be deemed made on the date
            upon which it is actually delivered to the party to whom it is
            directed.

            (a)   To Golato:

                  Domenic Golato
                  7 False Heather Way
                  Medford, NJ 08055

            (b)   To IGI:

                  Frank Gerardi, Chairman
                  IGI, Inc.
                  105 Lincoln Ave.
                  Buena, NJ 08103

                  With Copy To:

                  Diane L. Mulligan, Esq.
                  Edell & Associates, P.C.
                  1776 On the Green - 8th Floor
                  Morristown, New Jersey  07960

      28.   Counterpart Execution.  This Agreement may be executed in one or
            more counterparts, each of which shall be deemed an original, but
            all of which together shall constitute one and the same
            instrument.


<PAGE>  13


      IN WITNESS WHEREOF, the parties have signed this Agreement on this 30th
day of June, 2004, effective as of the close of business on June 30, 2004.

                                       EMPLOYER

                                       IGI, INC.

                                      By: /s/ Frank Gerardi
                                       ------------------------------------
                                       Frank Gerardi
                                       Chairman


                                       EMPLOYEE

Witnessed:

/s/ Lisa M Pagliughi                   /s/ Domenic N Golato
-----------------------------------    ------------------------------------
Notary Public                          Domenic N. Golato


<PAGE>  14