Document:

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                                    IGI, INC.

                                       to

                        AMERICAN CAPITAL STRATEGIES, LTD.

EXHIBIT *(10.49)

                     OPEN-ENDED MORTGAGE, SECURITY AGREEMENT
                       AND ASSIGNMENT OF LEASES AND RENTS

                            Dated: October 29, 1999

                         Location: County of Cumberland
                                   State of New Jersey

                              RECORD AND RETURN TO:

                              Arnold & Porter
                              399 Park Avenue
                              New York, New York 10022-4690
                              Attention: Michael W. Oshima, Esquire

THIS OPEN-ENDED MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS
AND THE OBLIGATIONS SECURED HEREBY ARE
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SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AGREEMENT (THE "SUBORDINATION AGREEMENT") DATED AS OF OCTOBER 29,
1999, AMONG FLEET CAPITAL CORPORATION, AMERICAN CAPITAL STRATEGIES, LTD., IGI,
INC., IGEN, INC., IMMUNOGENETICS, INC., AND BLOOD CELLS, INC., TO THE
INDEBTEDNESS AND OTHER LIABILITIES OWED BY IGI, INC., IGEN, INC.,
IMMUNOGENETICS, INC., AND BLOOD CELLS, INC. UNDER AND PURSUANT TO THE LOAN AND
SECURITY AGREEMENT DATED AS OF OCTOBER 29, 1999, AND EACH RELATED "LOAN
DOCUMENT" (AS DEFINED THEREIN), AND EACH HOLDER OF THE NOTE SECURED HEREBY, BY
ITS ACCEPTANCE THEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF
THE SUBORDINATION AGREEMENT.

                     OPEN-ENDED MORTGAGE, SECURITY AGREEMENT
                       AND ASSIGNMENT OF LEASES AND RENTS

         THIS OPEN-ENDED MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES
         AND RENTS made the 29th day of October, 1999, between IGI, INC. a
         Delaware corporation, having a mailing address at Wheat Road and
         Lincoln Avenue, Buena, New Jersey 03104 (the "MORTGAGOR"), and AMERICAN
         CAPITAL STRATEGIES, LTD., a Delaware corporation, having an office at 2
         Bethesda Metro Center, 14th Floor, Bethesda, Maryland 20814 (the
         "MORTGAGEE"),

                              W I T N E S S E T H:

      THIS MORTGAGE SECURES FUTURE ADVANCES AND ALL FUTURE OBLIGATIONS
WHATSOEVER OF MORTGAGOR TO MORTGAGEE.

      Terms not otherwise defined herein shall have the meanings ascribed
thereto in the Note and Equity Purchase Agreement of even date herewith by and
among Mortgagor, IGEN, Inc., ImmunoGenetics, Inc., Blood Cells, Inc., and
Mortgagee (as the same may be amended, supplemented or modified from time to
time, the "PURCHASE AGREEMENT").

      Whereas the Mortgagor is the owner of a fee estate in the premises
described in Exhibit A attached hereto (the "PREMISES");

      NOW THEREFORE, to secure the payment of all indebtedness incurred under
the Purchase Agreement, the Mortgagor's Series A Senior Subordinated Notes Due
September 30, 2006 in the original principal amount of $6,650,000 and the
Mortgagor's Series B Senior Subordinated Notes Due September 30, 2006 in the
original principal amount of $350,000 issued pursuant thereto (collectively, as
the same may be amended, supplemented or modified from time to time, the "NOTE")
in the initial aggregate principal amount of $7,000,000, lawful money of the
United States of America, to be paid with interest (said principal indebtedness,
interest and all other sums which may or shall at any time be owing being
hereinafter collectively referred to as the "DEBT"), all other amounts which
Mortgagor and Mortgagee may agree are to be secured hereby, with interest
thereon at the rate or rates agreed upon; all other existing or future
obligations of Mortgagor, its successors or assigns, to Mortgagee, whether oral
or written, secured or unsecured, direct or indirect, primary or secondary,
absolute or contingent, joint or several, which are now due or to become due,
and regardless of their nature, together with any such future obligations; the
Mortgagor has mortgaged, given, granted, bargained, sold, aliened, enfeoffed,
conveyed, confirmed and assigned, and by these presents does mortgage, give,
grant, bargain, sell, alien, enfeoff,
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convey, confirm and assign unto the Mortgagee forever all right, title and
interest of the Mortgagor now owned, or hereafter acquired, in and to the
following property, rights and interest (such property, rights and interests
being hereinafter collectively referred to as the "MORTGAGED PROPERTY"):

      (a)The Premises;

      (b)all buildings and improvements now or hereafter located on the Premises
(the "IMPROVEMENTS");

      (c)all of the estate, right, title, claim or demand of any nature
whatsoever of the Mortgagor, either in law or in equity, in possession or
expectancy, in and to the Mortgaged Property or any part thereof;

      (d)all easements, rights-of-way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers, and all
estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments, and appurtenances of any nature whatsoever, in any way belonging,
relating or pertaining to the Mortgaged Property (including, without limitation,
any and all development rights, air rights or similar or comparable rights of
any nature whatsoever now or hereafter appurtenant to the Premises or now or
hereafter transferred to the Premises) and all land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining the
Premises to the center line thereof;

      (e)except as provided in the Purchase Agreement, all machinery, apparatus,
equipment, fittings, fixtures and other property of every kind and nature
whatsoever owned by the Mortgagor, or in which the Mortgagor has or shall have
an interest, now or hereafter located upon the Mortgaged Property, or
appurtenances thereto, and usable in connection with the present or future
operation and occupancy of the Mortgaged Property and all building equipment,
materials and supplies of any nature whatsoever owned by the Mortgagor, or in
which the Mortgagor has or shall have an interest, now or hereafter located upon
the Mortgaged Property (collectively, the "EQUIPMENT"), and the right, title and
interest of the Mortgagor in and to any of the Equipment which may be subject to
any security agreements (as defined in the Uniform Commercial Code of the State
in which the Premises are located), superior in lien to lien of this Mortgage;

      (f)all awards or payments, including interest thereon, and the right to
receive the same, which may be made with respect to the Mortgaged Property,
whether from the exercise of the right of eminent domain (including any transfer
made in lieu of the exercise of said right), or for any other injury to or
decrease in the value of the Mortgaged Property;

      (g)all leases and other agreements affecting the use or occupancy of the
Mortgaged Property now or hereafter entered into (the "LEASES") and the right to
receive and apply the rents, issues and profits of the Mortgaged Property (the
"RENTS") to the payment of the Debt;

      (h)all proceeds of and any unearned premiums on any insurance policies
covering the Mortgaged Property, including, without limitation, the right to
receive and apply the proceeds of any insurance, judgments, or settlements made
in lieu thereof, for damage to the Mortgaged Property; and

      (i)the right, in the name and on behalf of the Mortgagor, to appear in and
defend any action or proceeding brought with respect to the Mortgaged Property
and to commence any action or proceeding to protect the interest of the
Mortgagee in the Mortgaged Property.

      TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the proper use and benefit of the Mortgagee, and the successors and
assigns of the Mortgagee, forever.
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      AND the Mortgagor covenants and agrees with and represents and warrants to
the Mortgagee as follows:

      1. Payment of Debt. The Mortgagor will pay the Debt at the time and in the
manner provided for its payment in the Note.

      2. Warranty of Title. Subject only to those exceptions to title
specifically set forth in the title policy issued or to be issued by Chicago
Title Insurance Company, commitment No. BT-9951, to the Mortgagee and insuring
the lien of this Mortgage, the Mortgagor warrants the title to the Premises, the
Improvements, the Equipment and the balance of the Mortgaged Property. the
Mortgagor also represents and warrants that (i) the Mortgagor is now, and after
giving effect to this Mortgage, will be in a solvent condition, (ii) the
execution and delivery of this Mortgage by the Mortgagor does not constitute a
"fraudulent conveyance" within the meaning of Title 11 of the United States Code
as now constituted or under any other applicable statute, and (iii) no
bankruptcy or insolvency proceedings are pending or contemplated by or against
the Mortgagor.

      3. Insurance. The Mortgagor shall maintain insurance as required by the
Purchase Agreement, the proceeds of which are to be paid to the Mortgagee for
application as provided by the Purchase Agreement.

      4. Payment of Taxes, etc. The Mortgagor shall pay all taxes, assessments,
water rates, sewer rents and other charges, including vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the Premises, now
or hereafter levied or assessed against the Mortgaged Property (the "TAXES")
prior to the date upon which any fine, penalty, interest or cost may be added
thereto or imposed by law for the nonpayment thereof. The Mortgagor shall
deliver to the Mortgagee, upon request, receipted bills, canceled checks and
other evidence satisfactory to the Mortgagee evidencing that the payment of all
taxes is current.

      5. Escrow Fund. If an Event of Default is outstanding, the Mortgagor will,
at the option of the Mortgagee, pay to the Mortgagee on the first day of each
calendar month one-twelfth of an amount (the "ESCROW FUND") which would be
sufficient to pay the Taxes payable, or estimated by the Mortgagee to be
payable, during the ensuing twelve (12) months. The Mortgagee will apply the
Escrow Fund to the payment of Taxes which are required to be paid by the
Mortgagor pursuant to the provisions of this Mortgage. If the amount of the
Escrow Fund shall exceed the amount of the Taxes payable by the Mortgagor
pursuant to the provisions of this Mortgage, the Mortgagee shall, in its
discretion, (a) return any excess to the Mortgagor, or (b) credit such excess
against future payments to be made to the Escrow Fund or (c) credit such excess
to the Debt. In allocating such excess, the Mortgagee may deal with the person
shown on the records of the Mortgagee to be the owner of the Mortgaged Property.
If the Escrow Fund is not sufficient to pay the Taxes, as the same become
payable, the Mortgagor shall pay to the Mortgagee, upon request, an amount which
the Mortgagee shall estimate as sufficient to make up the deficiency. Until
expended or applied as above provided, any amounts in the Escrow Fund may be
commingled with the general funds of the Mortgagee and shall constitute
additional security for the Debt and shall not bear interest.

      6. Condemnation. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise, the Mortgagor shall continue to
pay the Debt at the time and in the manner provided for its payment in the Note
and this Mortgage and the Debt shall not be reduced until any award or payment
therefor shall have been actually received and applied by the Mortgagee to the
discharge of the Debt. The Mortgagee shall have the option to apply the entire
amount of any such award or payment to the discharge of the Debt whether or not
then due and payable in such order, priority and proportions as the Mortgagee in
its discretion shall deem proper. If the Mortgaged Property is sold, through
foreclosure or otherwise, prior to the receipt by the Mortgagee of such award or
payment, the Mortgagee shall have the right, whether or not a deficiency
judgment
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on the Note shall have been sought, recovered or denied, to receive such award
or payment, or a portion thereof sufficient to pay the Debt, whichever is less.
The Mortgagor shall file and prosecute its claim or claims for any such award or
payment in good faith and with due diligence and cause the same to be collected
and paid over to the Mortgagee. The Mortgagor hereby irrevocably authorizes and
empowers the Mortgagee, in the name of the Mortgagor or otherwise, to collect
and receipt for any such award or payment and to file and prosecute such claim
or claims. Although it is hereby expressly agreed that the same shall not be
necessary in any event, the Mortgagor shall, upon demand of the Mortgagee, make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning any such award or payment to the Mortgagee, free and
clear of any encumbrances of any kind or nature whatsoever.

      7. Leases and Rents. Subject to the terms of this paragraph, the Mortgagee
waives the right to enter the Mortgaged Property for the purpose of collecting
the Rents, and grants the Mortgagor the right to collect the Rents. The
Mortgagor shall hold the Rents, or an amount sufficient to discharge all current
sums due on the Debt, in trust for use in payment of the Debt. The right of the
Mortgagor to collect the Rents may be revoked by the Mortgagee upon an Event of
Default by giving notice of such revocation to the Mortgagor. Following such
notice the Mortgagee may retain and apply the Rents toward payment of the Debt
in such order, priority and proportions as the Mortgagee, in its discretion,
shall deem proper, or to the operation, maintenance and repair of the Mortgaged
Property, and irrespective of whether the Mortgagee shall have commenced a
foreclosure of this Mortgage or shall have applied or arranged for the
appointment of a receiver. The Mortgagor shall not, without the consent of the
Mortgagee, make, or suffer to be made, any Leases or modify or cancel any Leases
or accept prepayments of installments of the Rents for a period of more than one
(1) month in advance or further assign the whole or any part of the Rents. The
Mortgagor shall (a) fulfill or perform each and every provision of the Leases on
the part of the Mortgagor to be fulfilled or performed, (b) promptly send copies
of all notices of default which the Mortgagor shall send or receive under the
Leases to the Mortgagee, and (c) enforce, short of termination of the Leases,
the performance or observance of the provisions thereof by the tenants
thereunder.

      8. Maintenance of the Mortgaged Property. The Mortgagor shall cause the
Mortgaged Property to be maintained in good condition and repair and will not
commit or suffer to be committed any waste of the Mortgaged Property. The
Improvements and the Equipment shall not be removed, demolished or materially
altered (except for normal replacement of the Equipment), without the consent of
the Mortgagee. The Mortgagor shall promptly comply with all existing and future
governmental laws, orders, ordinances, rules and regulations affecting the
Mortgaged Property, or any portion thereof or the use thereof. The Mortgagor
shall promptly repair, replace or rebuild any part of the Mortgaged Property
which may be damaged or destroyed by fire or other property hazard or casualty
(including any fire or other property hazard or casualty for which insurance was
not obtained or obtainable) or which may be affected by any taking by any public
or quasi-public authority through eminent domain or otherwise, and shall
complete and pay for, within a reasonable time, any structure at any time in the
process of construction or repair on the Premises. The Mortgagor will not,
without obtaining the prior consent of the Mortgagee, initiate, join in or
consent to any private restrictive covenant, zoning ordinance, or other public
or private restrictions, limiting or affecting the uses which may be made of the
Mortgaged Property or any part thereof.

      9. Environmental Provisions. For the purposes of this paragraph the
following terms shall have the following meanings: (i) the term "HAZARDOUS
MATERIAL" shall mean any material or substance including petroleum products
that, whether by its nature or use, is subject to regulation under any
Environmental Requirement, (ii) the term "ENVIRONMENTAL REQUIREMENTS" shall
collectively mean the Spill Compensation and Control Act, N.J.S.A. 58:11-23.11,
et seq., the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
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Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.) and the Federal Water Pollution Control Act (33
U.S.C. Section 1251 et seq.), all as presently in effect and as the same may
hereafter be amended, any regulation pursuant thereto, or any other present or
future law, ordinance, rule, regulation, order or directive addressing
environmental, health or safety issues of or by any Governmental Authority,
(iii) the term "GOVERNMENTAL AUTHORITY" shall mean the Federal government, or
any state or other political subdivision thereof, or any agency, court or body
of the Federal government, any state or other political subdivision thereof,
exercising executive, legislative, judicial, regulatory or administrative
functions, and (iv) the term "DILIGENT INQUIRY" shall mean a level of inquiry at
least equal to an environmental site assessment of the Mortgaged Property
conducted in accordance with the Mortgagee's environmental policies and
procedures. The Mortgagor hereby represents and warrants to the Mortgagee that
to the best of the Mortgagor's knowledge after diligent inquiry (i) except for
Hazardous Material used in the ordinary course of Mortgagor's business in
compliance with all Environmental Requirements, no Hazardous Material has been
or is currently located at, in, on, under or about the Mortgaged Property in a
manner which violates any Environmental Requirement, or which requires cleanup
or corrective action of any kind under any Environmental Requirement, (ii) no
releasing, emitting, discharging, leaching, dumping or disposing of any
Hazardous Material from the Mortgaged Property onto or into any other property
or from any other property onto or into the Mortgaged Property has occurred or
is occurring in violation of any Environmental Requirement, (iii) no notice of
violation, lien, complaint, suit, order or other notice with respect to the
environmental condition of the Mortgaged Property is outstanding, nor has any
such notice been issued which has not been fully satisfied and complied with in
a timely fashion so as to bring the Mortgaged Property into full compliance with
all Environmental Requirements, (iv) no lien has been attached to any revenues
of, or any real or personal property owned by, the Mortgagor and located in the
State of New Jersey under any Environmental Requirement, (v) no Hazardous
Material is currently located at, on, in, under or about any real property owned
or occupied by the Mortgagor and located in the State of New Jersey, in a manner
which violates any Environmental Requirement or which requires cleanup or
corrective action of any kind under any Environmental Requirement, (vi)
Mortgagor has, and will continue to have, all necessary federal, state and local
licenses, certificates, permits and approvals relating to its facilities,
business, premises and equipment at the Mortgaged Property and is in compliance
with all applicable consent orders, judgments, injunctions and Environmental
Requirements, and (vii) all closures, terminations and transfers of operations,
as defined by the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et
seq. and the regulations thereunder ("ISRA"), on or relating to the Mortgaged
Property since December 31, 1983 have been completed only after full compliance
with ISRA, to the extent applicable. The Mortgagor shall comply, and shall cause
all tenants or other occupants of the Mortgaged Property to comply, in all
respects with all Environmental Requirements, and will not generate, store,
handle, process, dispose of or otherwise use, and will not permit any tenant or
other occupant of the Mortgaged Property to generate, store, handle, process,
dispose of or otherwise use, Hazardous Materials at, in, on, under or about the
Mortgaged Property in a manner that could lead or potentially lead to the
imposition on the Mortgagor, the Mortgagee or the Mortgaged Property of any
liability or lien of any nature whatsoever under any Environmental Requirement.
All closures, terminations and transfers of operations, as defined by ISRA, on
or relating to the Mortgaged Property during the term of this Mortgage, shall be
completed only after full compliance with ISRA, to the extent applicable, by the
Mortgagor and all tenants or other occupants of the Mortgaged Property to the
extent Mortgagor believes that ISRA is not applicable to any closures,
terminations or transfers of operations at the Mortgaged Property during the
term of this Mortgage, Mortgagor shall obtain a Letter of Non-Applicability as
provided for in ISRA. The Mortgagor shall notify the Mortgagee promptly in the
event of any spill or other release of any Hazardous Material at, in, on, under
or about the Mortgaged Property which is required to be reported to a
Governmental Authority under any Environmental Requirement, will promptly
forward to the Mortgagee copies of any notices received by the Mortgagor
relating to alleged violations of any Environmental Requirement and will
promptly pay when due any fine or assessment against the Mortgagee, the
Mortgagor or the Mortgaged
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Property relating to any Environmental Requirement. If at any time it is
determined that the past, present or future operation or use of the Mortgaged
Property violates any applicable Environmental Requirement or that there are
Hazardous Materials located at, in, on, under or about the Mortgaged Property
which, under any Environmental Requirement, require special handling in
collection, storage, treatment or disposal, or any other form of cleanup or
corrective action, the Mortgagor shall, within thirty (30) days after receipt of
notice thereof from any Governmental Authority or from the Mortgagee, take, at
its sole cost and expense, such actions as may be necessary to fully comply in
all respects with all Environmental Requirements, provided, however, that if
such compliance cannot reasonably be completed within such thirty (30) day
period, the Mortgagor shall commence such necessary action within such thirty
(30) day period and shall thereafter diligently and expeditiously proceed to
fully comply in all respects and in a timely fashion with all Environmental
Requirements. If the Mortgagor fails to timely take, or to diligently and
expeditiously proceed to complete in a timely fashion, any such action, the
Mortgagee may, in its sole and absolute discretion, make advances or payments
towards the performance or satisfaction of the same, but shall in no event be
under any obligation to do so. All sums so advanced or paid by the Mortgagee
(including, without limitation, counsel and consultant fees and expenses,
investigation and laboratory fees and expenses, and fines or other penalty
payments) and all sums advanced or paid in connection with any judicial or
administrative investigation or proceeding relating thereto, will immediately,
upon demand, become due and payable from the Mortgagor and shall bear interest
at the rate of interest determined in accordance with Section 8.2(c) of the
Purchase Agreement (the "DEFAULT RATE") from the date any such sums are so
advanced or paid by the Mortgagee until the date any such sums are repaid by the
Mortgagor to the Mortgagee. The Mortgagor will execute and deliver, promptly
upon request, such instruments as the Mortgagee may deem useful or necessary to
permit the Mortgagee to take any such action, and such additional notes and
mortgages, as the Mortgagee may require to secure all sums so advanced or paid
by the Mortgagee. If a lien is filed against the Mortgaged Property by any
Governmental Authority resulting from the need to expend or the actual expending
of monies arising from an action or omission, whether intentional or
unintentional, of the Mortgagor or for which the Mortgagor is responsible,
resulting in the releasing, spilling, leaking, leaching, pumping, emitting,
pouring, emptying or dumping of any Hazardous Material into the waters or onto
land located within or without the State where the Mortgaged Property is
located, then the Mortgagor will, within ten (10) days from the date that the
Mortgagor is first given notice that such lien has been placed against the
Mortgaged Property (or within such shorter period of time as may be specified by
the Mortgagee if such Governmental Authority has commenced steps to cause the
Mortgaged Property to be sold pursuant to such lien) either (a) pay the claim
and remove the lien, or (b) furnish a cash deposit, bond, or such other security
with respect thereto as is satisfactory in all respects to the Mortgagee and is
sufficient to effect a complete discharge of such lien on the Mortgaged
Property. As a condition precedent to any action by Mortgagor, whether in equity
or at law, to seek to rescind its interest in the Mortgaged Property, including,
without limitation, any statutory rights of rescission under either N.J.S.A.
13:1K-13(b) or N.J.S.A. 13:18A-22(c), Mortgagor shall notify Mortgagee and
provide replacement collateral which in Mortgagee's sole discretion is
equivalent to the Mortgaged Premises. The Mortgagee may, at its option, if the
Mortgagee reasonably believes that a Hazardous Material or other environmental
condition violates or threatens to violate any Environmental Requirement, cause
an environmental audit of the Mortgaged Property or portions thereof to be
conducted to confirm the Mortgagor's compliance with the provisions of this
paragraph, and the Mortgagor shall cooperate in all reasonable ways with the
Mortgagee in connection with any such audit and shall pay all costs and expenses
incurred in connection therewith. The Mortgagor will defend, indemnify, and hold
harmless the Mortgagee, its employees, agents, officers, and directors, from and
against any and all claims, demands, penalties, causes of action, fines,
liabilities, settlements, damages, costs, or expenses of whatever kind or
nature, known or unknown, foreseen or unforeseen, contingent or otherwise
(including, without limitation, counsel and consultant fees and expenses,
(including, without limitation, counsel and consultant fees and expenses,
investigation and laboratory fees and expenses, court costs, and litigation
expenses) arising out of, in any way related to, (i) any breach by the Mortgagor
of any of the
<PAGE>   8
provisions of this paragraph, (ii) the presence, disposal, spillage, discharge,
emission, leakage, release, or threatened release of any Hazardous Material
which is at, in, on, under, about, from or affecting the Mortgaged Property,
including, without limitation, any damage or injury resulting from any such
Hazardous Material to or affecting the Mortgaged Property or the soil, water,
air, vegetation, buildings, personal property, persons or animals located on the
mortgaged Property or on any other property or otherwise, (iii) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to any such Hazardous Material, (iv) any lawsuit brought or
threatened, settlement reached, or order or directive of or by any Governmental
Authority relating to such Hazardous Material, or (v) any violation of any
Environmental Requirement or any policy or requirement of the Mortgagee
hereunder. This indemnification shall, notwithstanding any exculpatory or other
provision of any nature whatsoever to the contrary set forth in the Note, this
Mortgage or any other document or instrument now or hereafter executed and
delivered in connection with the loan evidenced by the Note and secured by this
Mortgage, constitute the personal recourse undertakings, obligations and
liabilities of the Mortgagor. If this Mortgage is foreclosed or the Mortgagor
tenders a deed or assignment in lieu of foreclosure, the Mortgagor shall deliver
the Mortgaged Property to the purchaser at foreclosure or to the Mortgagee, its
nominee, or wholly owned subsidiary, as the case may be, in a condition that
complies in all respects with all Environmental Requirements. The obligations
and liabilities of the Mortgagor under this paragraph shall survive and continue
in full force and effect and shall not be terminated, discharged or released, in
whole or in part, irrespective of whether the Debt has been paid in full and
irrespective of any foreclosure of this Mortgage or acceptance by the Mortgagee,
its nominee or wholly owned subsidiary of a deed or assignment in lieu of
foreclosure and irrespective of any other fact or circumstance of any nature
whatsoever.

      10.Transfer or Encumbrance of the Mortgaged Property. Except for Permitted
Liens, no part of the Mortgaged Property nor any interest of any nature
whatsoever therein shall in any manner be further encumbered, sold, transferred
or conveyed, or permitted to be further encumbered, sold, transferred, assigned
or conveyed without the prior consent of the Mortgagee, which consent in any and
all circumstances may be withheld in the sole and absolute discretion of the
Mortgagee. The provisions of the foregoing sentence of this paragraph shall
apply to each and every such further encumbrance, sale, transfer, assignment or
conveyance, regardless of whether or not the Mortgagee has consented to, or
waived by its action or inaction its rights hereunder with respect to, any such
previous further encumbrance, sale, transfer, assignment or conveyance, and
irrespective of whether such further encumbrance, sale, transfer, assignment or
conveyance is voluntary, by reason of operation of law or is otherwise made.

      11.Notice. Any notice, request, demand, statement, authorization, approval
or consent made hereunder shall be in writing and shall be hand delivered or
sent by Federal Express, or other reputable courier service, or by postage
pre-paid registered or certified mail, return receipt requested, and shall be
deemed given (i) when received at the following addresses if hand delivered or
sent by Federal Express, or other reputable courier service, and (ii) three (3)
business days after being postmarked and addressed as follows if sent by
registered or certified mail, return receipt requested:

      If to the Mortgagor: IGI, Inc.
                           Wheat Road & Lincoln Avenue
                           Buena, New Jersey 08310
                           Attn:    Paul Woitach, President
                           Telecopy No.: 609-697-1001

      If to the Mortgagee: American Capital Strategies, Ltd.
                           2 Bethesda Metro Center, 14th Floor
                           Bethesda, Maryland 20814
<PAGE>   9
                           Attn:    Chairman
                           Telecopy No.: 301-654-6714

      With a copy to:      Arnold & Porter
                           555 12th Street, N.W.
                           Washington, D.C. 20004
                           Attn.:   Samuel A. Flax, Esq.
                           Telecopy No.: 202-942-5999

Each party may designate a change of address by notice to the other party, given
at least fifteen (15) days before such change of address is to become effective.

      12.Sale of Mortgaged Property. If this Mortgage is foreclosed, the
Mortgaged Property, or any interest therein, may, at the discretion of the
Mortgagee, be sold in one or more parcels or in several interests or portions
and in any order or manner.

      13.Changes in Laws Regarding Taxation. In the event of the passage after
the date of this Mortgage of any law of the State in which the Premises are
located deducting from the value of real property for the purpose of taxation
any lien or encumbrance thereon or changing in any way the laws for the taxation
of mortgages or debts secured by mortgages for state or local purposes or the
manner of the collection of any such taxes, and imposing a tax, either directly
or indirectly, on this Mortgage, the Note or the Debt, the Mortgagor shall, if
permitted by law, pay any tax imposed as a result of any such law within the
statutory period or within fifteen (15) days after demand by the Mortgagee,
whichever is less.

      14.No Credits on Account of the Debt. The Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Taxes assessed against the Mortgaged Property or any part thereof
and no deduction shall otherwise be made or claimed from the taxable value of
the Mortgaged Property, or any part thereof, by reason of this Mortgage or the
Debt.

      15.Other Security for the Debt. The Mortgagor shall observe and perform
all of the terms, covenants and provisions contained in the Note and in all
other mortgages and other instruments or documents evidencing, securing or
guaranteeing payment of the Debt, in whole or in part, or otherwise executed and
delivered in connection with the Note, this Mortgage or the loan evidenced and
secured thereby.

      16.Documentary Stamps. If at any time the United States of America, any
state thereof, or any governmental subdivision of any such state, shall require
revenue or other stamps to be affixed to the Note or this Mortgage, the
Mortgagor will pay for the same, with interest and penalties thereon, if any.

      17.Right of Entry. The Mortgagee and its agents shall have the right to
enter and inspect the Mortgaged Property at all reasonable times upon reasonable
prior notice.

      18.Performance of Other Agreements. The Mortgagor shall observe and
perform each and every term to be observed or performed by the Mortgagor
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to the Mortgaged Property.

      19.Events of Defaults. The Debt shall become due at the option of the
Mortgagee upon the occurrence of any one or more of the following events
(collectively, "EVENTS OF DEFAULT"):
<PAGE>   10
         (a) the occurrence of an Event of Default under the Purchase Agreement;

         (b) if any representation or warranty in this Mortgage is false or
incorrect in any material respect or the Mortgagor fails to perform or fulfill
any covenant, condition or undertaking continued in this Mortgage; or

         (c) if the Mortgaged Property shall become subject (i) to any tax lien,
other than a lien for local real estate taxes and assessments not due and
payable, or (ii) to any lis pendens, notice of pendency, stop order, notice of
intention to file mechanic's or materialman's lien, mechanic's or materialman's
lien or other lien of any nature whatsoever and the same shall not either be
discharged of record or in the alternative insured over to the satisfaction of
the Mortgagee by the title company insuring the lien of this Mortgage within a
period of ten (10) days after the same is filed or recorded, and irrespective of
whether the same is superior or subordinate in lien or other priority to the
lien of this Mortgage and irrespective of whether the same constitutes a
perfected or inchoate lien or encumbered on the Mortgaged Property or is only a
matter of record or notice.

To the extent any of the above provisions conflict with the Purchase Agreement,
the terms of the Purchase Agreement shall control. Upon the occurrence of any
Event of Default, the Mortgagee may commence an action to foreclose this
Mortgage and/or exercise any and all other rights contained in this Mortgage or
otherwise available at law or in equity to enforce its rights.

      20.Right to Cure Defaults. If default in the performance of any of the
covenants of the Mortgagor herein occurs, the Mortgagee may, at its discretion,
remedy the same and for such purpose shall have the right to enter upon the
Mortgaged Property or any portion thereof without thereby becoming liable to the
Mortgagor or any person in possession thereof holding under the Mortgagor. If
the Mortgagee shall remedy such a default or appear in, defend, or bring any
action or proceeding to protect its interest in the Mortgaged Property or to
foreclose this Mortgage or collect the Debt, the costs and expenses thereof
(including reasonable attorneys' fees to the extent permitted by law), with
interest as provided in this paragraph, shall be paid by the Mortgagor to the
Mortgagee upon demand and shall constitute part of the Debt secured by this
Mortgage. All such costs and expenses incurred by the Mortgagee in remedying
such default or in appearing in, defending, or bringing any such action or
proceeding shall be paid by the Mortgagor to the Mortgagee upon demand, with
interest (calculated for the actual number of days elapsed on the basis of a
360-day year) at a rate per annum equal to the Default Rate.

      21.Appointment of Receiver. The Mortgagee, in any action to foreclose this
Mortgage or upon the actual or threatened waste to any part of the Mortgaged
Property or upon the occurrence of any default hereunder, shall be at liberty,
without notice, to apply for the appointment of a receiver of the Rents, and
shall be entitled to the appointment of such receiver as a matter of right,
without regard to the value of the Mortgaged Property as security for the Debt,
or the solvency or insolvency of any person then liable for the payment of the
Debt.

      22.Non-Waiver. The failure of the Mortgagee to insist upon strict
performance of any term of this Mortgage shall not be deemed to be a waiver of
any term of this Mortgage. The Mortgagor shall not be relieved of the
Mortgagor's obligation to pay the Debt at the time and in the manner provided
for its payment in the Note and this Mortgage by reason of (i) failure of the
Mortgagee to comply with any request of the Mortgagor to take any action to
foreclose this Mortgage or otherwise enforce any of the provisions hereof or of
the Note or any other mortgage, instrument or document evidencing, securing or
guaranteeing payment of the Debt or any portion thereof, (ii) the release,
regardless of consideration, of the whole or any part of the Mortgaged Property
or any other security for the Debt, or (iii) any agreement or stipulation
between the Mortgagee and any subsequent owner or owners of the Mortgaged
Property or other person extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Mortgage or any other mortgage,
instrument or document evidencing, securing or guaranteeing
<PAGE>   11
payment of the Debt or any portion thereof, without first having obtained the
consent of the Mortgagor, and in the latter event, the Mortgagor shall continue
to be obligated to pay the Debt at the time and in the manner provided in the
Note and this Mortgage, as so extended, modified and supplemented, unless
expressly released and discharged from such obligation by the Mortgagee in
writing. Regardless of consideration, and without the necessity for any notice
to or consent by the holder of any subordinate lien, encumbrance, right, title
or interest in or to the Mortgaged Property, the Mortgagee may release any
person at any time liable for the payment of the Debt or any portion thereof or
any part of the security held for the Debt and may extend the time of payment or
otherwise modify the terms of the Note or this Mortgage, including, without
limitation, a modification of the interest rate payable on the principal balance
of the Note, without in any manner impairing or affecting this Mortgage or the
lien thereof or the priority of this Mortgage, as so extended and modified, as
security for the Debt over any such subordinate lien, encumbrance, right, title
or interest. The Mortgagee may resort for the payment of the Debt to any other
security held by the Mortgagee in such order and manner as the Mortgagee, in its
discretion, may elect. The Mortgagee may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of the Mortgagee thereafter to foreclose this Mortgage. The Mortgagee
shall not be limited exclusively to the rights and remedies herein stated but
shall be entitled to every additional right and remedy now or hereafter afforded
by law. The rights of the Mortgagee under this Mortgage shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of the Mortgagee shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision.

      23.Liability. If the Mortgagor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several.

      24.Construction. The terms of this Mortgage shall be construed in
accordance with the laws of the State in which the Premises are located.

      25.Security Agreement. This Mortgage constitutes both a real property
mortgage and a "security agreement", within the meaning of the Uniform
Commercial Code, and the Mortgaged Property includes both real and personal
property and all other rights and interest, whether tangible or intangible in
nature, of the Mortgagor in the Mortgaged Property. The Mortgagor by executing
and delivering this Mortgage has granted to the Mortgagee, as security for the
Debt, a security interest in the Equipment. If an Event of Default occurs under
the Purchase Agreement or this Mortgage, the Mortgagee, in addition to any other
rights and remedies which it may have, shall have and may exercise immediately
and without demand, any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Equipment or
any part thereof, and to take such other measures as the Mortgagee may deem
necessary for the care, protection and preservation of the Equipment. Upon
request or demand of the Mortgagee, the Mortgagor shall at its expense assemble
the Equipment and make it available to the Mortgagee at a convenient place
acceptable to the Mortgagee. The Mortgagor shall pay to the Mortgagee on demand
any and all expenses, including legal expenses and attorneys' fees, incurred or
paid by the Mortgagee in protecting its interest in the Equipment and in
enforcing its rights hereunder with respect to the Equipment. Any notice of
sale, disposition or other intended action by the Mortgagee with respect to the
Equipment sent to the Mortgagor in accordance with the provisions of this
Mortgage at least seven (7) days prior to the date of any such sale, disposition
or other action, shall constitute reasonable notice to the Mortgagor, and the
method of sale or disposition or other intended action set forth or specified in
such notice shall conclusively be deemed to be commercially reasonable within
the meaning of the Uniform Commercial Code unless objected to in writing by the
Mortgagor within five (5) days after receipt by the Mortgagor of such notice.
The proceeds of any sale or disposition of the Equipment, or any part thereof,
may be applied by the Mortgagee to the payment of the Debt in such order,
priority and proportions as the Mortgagee in its discretion shall deem proper.
<PAGE>   12
      26.Further Acts, etc. The Mortgagor will, at the cost of the Mortgagor,
and without expense to the Mortgagee, do, execute, acknowledge and deliver all
and every such further acts, deeds, conveyances, mortgages, assignments, notices
of assignments, transfers and assurances as the Mortgagee shall, from time to
time, require for the better assuring, conveying, assigning, transferring and
confirming unto the Mortgagee the property and rights hereby mortgaged or
intended now or hereafter so to be, or which the Mortgagor may be or may
hereafter become bound to convey or assign to the Mortgagee, or for carrying out
the intention or facilitating the performance of the terms of this Mortgage or
for filing, registering or recording this mortgage and, on demand, will execute
and deliver and hereby authorizes the Mortgagee to execute in the name of the
Mortgagor to the extent the Mortgagee may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments, to evidence
more effectively the lien hereof upon the Mortgaged Property.

      27.Headings, etc. The headings and captions of various paragraphs of this
Mortgage are for convenience of reference only and are not to be construed as
defined or limiting, in any way, the scope or intent of the provisions hereof.

      28.Filing of Mortgage, etc. The Mortgagor forthwith upon the execution and
delivery of this Mortgage and thereafter, from time to time, will cause this
Mortgage, and any security instrument creating a lien or evidencing the lien
hereof upon the Mortgaged Property and each instrument of further assurance to
be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect, preserve and perfect the lien hereof upon, and the interest of the
Mortgagee in, the Mortgaged Property. The Mortgagor will pay all filing,
registration and recording fees, and all expenses incident to the preparation,
execution and acknowledgment of this Mortgage, any mortgage supplemental hereto,
any security instrument with respect to the Mortgaged Property, and any
instrument of further assurance, and all Federal, state, county and municipal
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of this Mortgage, any mortgage supplemental
hereto, any security instrument with respect to the Mortgaged Property or any
instrument of further assurance. The Mortgagor shall hold harmless and indemnify
the Mortgagee, its successors and assigns, against any liability incurred by
reason of the imposition of any tax on the making and recording of this
Mortgage.

      29.Usury Laws. This Mortgage and the Note are subject to the express
condition that at no time shall the Mortgagor be obligated or required to pay
interest on the principal balance due under the Note at a rate which could
subject the holder of the Note to either civil or criminal liability as a result
of being in excess of the maximum interest rate which the Mortgagor is permitted
by law to contract or agree to pay. If by the terms of this Mortgage or the
Note, the Mortgagor is at any time required or obligated to pay interest on the
principal balance due under the Note at a rate in excess of such maximum rate,
the rate of interest under the Note shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance of the Note.

      30.Recovery of Sums Required To Be Paid. The Mortgagee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of the Mortgagee thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by the Mortgagor existing at the time such
earlier action was commenced.
<PAGE>   13
      31.Authority. The Mortgagor (and the undersigned representative of the
Mortgagor, if any) has full power, authority and legal right to execute this
Mortgage, and to mortgage, give, grant, bargain, sell, alien, enfeoff, convey,
confirm and assign the Mortgaged Property pursuant to the terms hereof and to
keep and observe all of the terms of this Mortgage on the Mortgagor's part to be
performed.

      32.Actions and Proceedings. The Mortgagee shall have the right to appear
in and defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of the
Mortgagor, which the Mortgagee, in its discretion, feels should be brought to
protect its interest in the Mortgaged Property.

      33.Inapplicable Provisions. If any term, covenant or condition of this
Mortgage shall be held to be invalid, illegal or unenforceable in any respect,
this Mortgage shall be construed without such provision.

      34.Duplicate Originals. This Mortgage may be executed in any number of
duplicate originals and each such duplicate original shall be deemed to
constitute but one and the same instrument.

      35.Certain Definitions. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage shall be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean each the Mortgagor and any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein; the word
"Mortgagee" shall mean the Mortgagee or any subsequent holder of the Note; the
word "Note" shall mean Note and any other evidence of indebtedness secured by
this Mortgage; the word "Guarantor" shall mean each person guaranteeing payment
of the Debt or any portion thereof or performance by the Mortgagor of any of the
terms of this Mortgage and their respective heirs, executors, administrators,
legal representatives, successors and assigns; the word "person" shall include
an individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity; the words "Mortgaged
Property" shall include any portion of the Mortgaged Property or interest
therein; and the word "Debt" shall mean all sums secured by this Mortgage; and
the word "default" shall mean the occurrence of any default by the Mortgagor or
other person in the observance or performance of any of the terms, covenants or
provisions of the Purchase Agreement, the Note or this Mortgage on the part of
the Mortgagor or such other person to be observed or performed without regard to
whether such default constitutes or would constitute upon notice or lapse of
time, or both, an Event of Default under this Mortgage. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa.

      36.Waiver of Notice. The Mortgagor shall not be entitled to any notices of
any nature whatsoever from the Mortgagee except with respect to matters for
which this Mortgage specifically and expressly provides for the giving of notice
by the Mortgagee to the Mortgagor, and the Mortgagor hereby expressly waives the
right to receive any notice from the Mortgagee with respect to any matter for
which this Mortgage does not specifically and expressly provide for the giving
of notice by the Mortgagee to the Mortgagor.

      37.No Oral Change. This Mortgage may only be modified, amended or changed
by an agreement in writing signed by the Mortgagor and the Mortgagee, and may
only be released, discharged or satisfied of record by an agreement in writing
signed by the Mortgagee. No waiver of any term, covenant or provision of this
Mortgage shall be effective unless given in writing by the Mortgagee and if so
given by the Mortgagee shall only be effective in the specific instance in which
given. The Mortgagor acknowledges that the Note, this Mortgage, the Purchase
Agreement, and the other documents and instruments executed and delivered in
connection therewith or otherwise
<PAGE>   14
in connection with the loan secured hereby set forth the entire agreement and
understanding of the Mortgagor and the Mortgagee with respect to the loan
secured hereby and that no oral or other agreements, understanding,
representation or warranties exist with respect to the loan secured hereby other
than those set forth in the Note, this Mortgage, the Purchase Agreement and such
other executed and delivered documents and instruments.

      38.Absolute and Unconditional Obligation. The Mortgagor acknowledges that
the Mortgagor's obligation to pay the Debt in accordance with the provision of
the Note and this Mortgage is and shall at all times continue to be absolute and
unconditional in all respects, and shall at all times be valid and enforceable
irrespective of any other agreements or circumstances of any nature whatsoever
which might otherwise constitute a defense to the Note or this Mortgage or the
obligation of the Mortgagor thereunder to pay the Debt or the obligations of any
other person relating to the Note or this Mortgage or the obligations of the
Mortgagor under the Note or this Mortgage or otherwise with respect to the loan
secured hereby, and the Mortgagor absolutely, unconditionally and irrevocably
waives any and all right to assert any defense, setoff, counterclaim or
crossclaim of any nature whatsoever with respect to the obligation of the
Mortgagor to pay the Debt in accordance with the provisions of the Note and this
Mortgage or the obligations of any other person relating to the Note or this
Mortgage or obligations of the Mortgagor under the Note or this Mortgage or
otherwise with respect to the loan secured hereby in any action or proceeding
brought by the Mortgagee to collect the Debt, or any portion thereof, or to
enforce, foreclose and realize upon the lien and security interest created by
this Mortgage or any other document or instrument securing repayment of the
Debt, in whole or in part.

      39.Waiver of Trial by Jury. The Mortgagor hereby irrevocably and
unconditionally waives, and the Mortgagee by its acceptance of the Note and this
Mortgage irrevocably and unconditionally waives, any and all rights to trial by
jury in any action, suit or counterclaim arising in connection with, out of or
otherwise relating to the Note, this Mortgage the Purchase Agreement, any other
document or instrument now or hereafter executed and delivered in connection
therewith or the loan secured by this Mortgage.

      40.Waiver of Statutory Rights. The Mortgagor shall not and will not apply
for or avail itself of any appraisement, valuation, stay, extension or exemption
laws, or any so-called "Moratorium Laws", now existing or hereafter enacted, in
order to prevent or hinder the enforcement or foreclosure of this Mortgage, but
hereby waives the benefit of such laws to the full extent that the Mortgagor may
do so under applicable law. The Mortgagor for itself and all who may claim
through or under it waives any and all right to have the property and estates
comprising the Mortgaged Property marshaled upon any foreclosure of the lien of
this Mortgage and agrees that any court having jurisdiction to foreclose such
lien may order the Mortgaged Property sold as an entirety. The Mortgagor hereby
waives for itself and all who may claim through or under it, and to the full
extent the Mortgagor may do so under applicable law, any and all rights of
redemption from sale under any order of decree of foreclosure of this Mortgage
or granted under any statute now existing or hereafter enacted.

      41.True Copy. The Mortgagor acknowledges receipt of a true copy of this
Mortgage without charge.

      42.Future Disbursements. This Mortgage secures a loan which by its terms
is subject to modification as defined in N.J.S.A. 46:9-8.1 et seq.

      43.Relationship. The relationship of the Mortgagee to the Mortgagor
hereunder is strictly and solely that of lender and borrower and nothing
contained in the Note, this Mortgage, the Purchase Agreement or any other
document or instrument now or hereafter executed and delivered in connection
therewith or otherwise in connection with the loan secured hereby is intended to
create, or shall in any event or under any circumstance be construed as
creating, a partnership,
<PAGE>   15
joint venture, tenancy-in-common, joint tenancy or other relationship of any
nature whatsoever between the Mortgagee and the Mortgagor other than as lender
and borrower.

      IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the day
and year first above written. Mortgagor acknowledges receipt of a true copy of
this Mortgage.

Attest:                                  IGI, INC.

By: /s/ ROBERT E. McDANIEL                  By: /s/ MANFRED HANUSCHEK
    ----------------------------                --------------------------

Name: ROBERT E. McDANIEL                    Name: MANFRED HANUSCHEK
      --------------------------                  -----------------------

Title: GENERAL COUNSEL                      Title: CFO
       -----------------------                     -----------------------
<PAGE>   16
                            CORPORATE ACKNOWLEDGMENT

STATE OF                                    :
                                    :  ss
COUNTY OF                                   :

      On this, the 29th day of October, 1999, before me, the subscriber, a
notary public in and for the State and County aforesaid, personally appeared
_________________________, a _______________ of IGI, Inc., a Delaware
corporation, and who acknowledged that _____, as such ___________________, being
authorized to do so, executed the foregoing instrument on behalf of said
corporation for the purposes therein contained.

      WITNESS my hand and seal the day and year aforesaid.

                                            Notary Public

                                            My Commission Expires:
<PAGE>   17
                                    EXHIBIT A

                            (Description of Premises)

<PAGE>   18
EXHIBIT 10.49

                                   DESCRIPTION

ALL that certain tract, lot and parcel of land lying and being in the City of
Vineland, County of Cumberland, and State of New Jersey, being more particularly
described as follows:

BEGINNING at the intersection of the Southeasterly line of Highland Avenue (50
feet wide - Tax Map), with the Southwesterly line of Landis Avenue, County Route
540 (66 feet wide - Tax Map), and extending

1.       South 82 degrees 00 minutes 00 seconds East, along the southwesterly
         line of Landis Avenue, 196.21 feet to a point in the same, at a corner
         to Lot 16, Block 630; thence

2.       South 08 degrees 00 minutes 00 seconds West, along the line of Lot 16,
         Block 630, 227.43 feet to a corner to same; thence

3.       South 82 degrees 00 minutes 00 seconds East, still along the line of
         Lot 16, Block 630, 108.50 feet to a corner to same, in the line of Lot
         17, Block 630; thence

4.       South 8 degrees 00 minutes 00 seconds West, partly along the line of
         Lot 17, Block 630, 1062.00 feet to a corner to Lots 2, 3 & 14, block
         630; thence

5.       North 82 degrees 00 minutes 00 seconds West, along the line of Lot 14,
         block 630, 304.71 feet to a point in the Southeasterly line of Highland
         Avenue; thence

6.       North 8 degrees 00 minutes 00 seconds East, along the Southeasterly
         line of Highland Avenue, 1289.43 feet to the point of Beginning.

The above premises are described in accordance with a plan entitled 'ALTA/ASCM
LAND TITLE SURVEY, IMMUNOGENETICS, INC., Block 630 * Lot 15, city of Vineland,
prepared by Millennium Surveying & Mapping, dated October 29, 1999.

NOTE: FOR INFORMATION PURPOSES ONLY: Being Lot 15, block 630, Tax Map City Of
Vineland.

Title of record to Tract No. 1 became vested in Immunogenetics, Inc., a
Corporation of the State of Delaware, by Deed from Medatz, Inc., a Corporation
of the State of Delaware dated 12/31/87 and recorded 2/18/88 in Deed Book 1706,
Page 81.
<PAGE>   19
EXHIBIT 10.49

                                   DESCRIPTION

ALL that certain tract, lot and parcel of land lying and being in the City of
Vineland, County of Cumberland, and State of New Jersey, being more particularly
described as follows:

BEGINNING at a point in the Southwesterly line of East Grant Avenue, (50 feet
wide - Tax map), at a corner to Lot 13, Block 1027, the following two (2)
courses from the intersection of said centerline of East Grant Avenue, with the
centerline of Main Road (66 feet wide - Tax Map);

a)       North 82 degrees 00 minutes 00 seconds West along the centerline of
         East Grant Avenue, 1949.15 feet to a point in the same;

b)       South 08 degrees 00 minutes 00 seconds West, leaving said centerline,
         25.00 feet to the point and BEGINNING and extending;

1.       South 08 degrees 00 minutes 00 seconds West, along the line of Lot 13,
         block 1027, 1132.51 feet to a corner to same, in the line of Lot 14,
         Block 1027; thence

2.       North 82 degrees 00 minutes 00 seconds West, partly along the line of
         Lots 14, 52 & 52, Block 1027, 253.44 feet to a corner to Lot 10, Block
         1027; thence

3.       North 08 degrees 00 minutes 00 seconds East, partly along the line of
         Lot 10, Block 1027, 721.91 feet to a point in the same, at a corner to
         Lot 11, Block 1027; thence

4.       South 82 degrees 00 minutes 00 seconds East, along the line of Lot 11,
         Block 1027, 100.00 feet to a corner to same; thence

5.       North 08 degrees 00 minutes 00 seconds East, along the line of Lot 11,
         Block 1027, 410.60 feet to a point in the Southwesterly line of Grant
         Avenue; thence

6.       South 82 degrees 00 minutes 00 seconds East, along the Southwesterly
         line of East Grant Avenue, 153.44 feet to a point of BEGINNING.

NOTE: FOR INFORMATION PURPOSES ONLY: Being Lot 12 in block 1027, Tax Map City of
Vineland.

Title of record to Tract No. 2 became vested in Immunogenetics, Inc. a Delaware
Corporation, by Deed from Ezekial Bermudez and Norma Bermudez, his wife, dated
12/18/91 and recorded 12/27/91 in Deed Book 1926, page 109.<PAGE>   1

                                    IGI, INC.

                                       to

                        AMERICAN CAPITAL STRATEGIES, LTD.

EXHIBIT *(10.50)

                     OPEN-ENDED MORTGAGE, SECURITY AGREEMENT
                       AND ASSIGNMENT OF LEASES AND RENTS

                           Dated:           October  29, 1999

                           Location:        County of Atlantic
                                            State of New Jersey

                           RECORD AND RETURN TO:

                           Arnold & Porter
                           399 Park Avenue
                           New York, New York  10022-4690
                           Attention:    Michael W. Oshima, Esquire

THIS OPEN-ENDED MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS
AND THE OBLIGATIONS SECURED HEREBY ARE

<PAGE>   2

SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AGREEMENT (THE "SUBORDINATION AGREEMENT") DATED AS OF OCTOBER 29,
1999, AMONG FLEET CAPITAL CORPORATION, AMERICAN CAPITAL STRATEGIES, LTD., IGI,
INC., IGEN, INC., IMMUNOGENETICS, INC., AND BLOOD CELLS, INC., TO THE
INDEBTEDNESS AND OTHER LIABILITIES OWED BY IGI, INC., IGEN, INC.,
IMMUNOGENETICS, INC., AND BLOOD CELLS, INC. UNDER AND PURSUANT TO THE LOAN AND
SECURITY AGREEMENT DATED AS OF OCTOBER 29, 1999, AND EACH RELATED "LOAN
DOCUMENT" (AS DEFINED THEREIN), AND EACH HOLDER OF THE NOTE SECURED HEREBY, BY
ITS ACCEPTANCE THEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF
THE SUBORDINATION AGREEMENT.

                     OPEN-ENDED MORTGAGE, SECURITY AGREEMENT
                       AND ASSIGNMENT OF LEASES AND RENTS

         THIS OPEN-ENDED MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES
         AND RENTS made the 29th day of October, 1999, between IGI, INC. a
         Delaware corporation, having a mailing address at Wheat Road and
         Lincoln Avenue, Buena, New Jersey 03104 (the "MORTGAGOR"), and AMERICAN
         CAPITAL STRATEGIES, LTD., a Delaware corporation, having an office at 2
         Bethesda Metro Center, 14th Floor, Bethesda, Maryland 20814 (the
         "MORTGAGEE"),

                              W I T N E S S E T H:

      THIS MORTGAGE SECURES FUTURE ADVANCES AND ALL FUTURE OBLIGATIONS
WHATSOEVER OF MORTGAGOR TO MORTGAGEE.

      Terms not otherwise defined herein shall have the meanings ascribed
thereto in the Note and Equity Purchase Agreement of even date herewith by and
among Mortgagor, IGEN, Inc., ImmunoGenetics, Inc., Blood Cells, Inc., and
Mortgagee (as the same may be amended, supplemented or modified from time to
time, the "PURCHASE AGREEMENT").

      Whereas the Mortgagor is the owner of a fee estate in the premises
described in Exhibit A attached hereto (the "PREMISES");

      NOW THEREFORE, to secure the payment of all indebtedness incurred under
the Purchase Agreement, the Mortgagor's Series A Senior Subordinated Notes Due
September 30, 2006 in the original principal amount of $6,650,000 and the
Mortgagor's Series B Senior Subordinated Notes Due September 30, 2006 in the
original principal amount of $350,000 issued pursuant thereto (collectively, as
the same may be amended, supplemented or modified from time to time, the "NOTE")
in the initial aggregate principal amount of $7,000,000, lawful money of the
United States of America, to be paid with interest (said principal indebtedness,
interest and all other sums which may or shall at any time be owing being
hereinafter collectively referred to as the "DEBT"), all other amounts which
Mortgagor and Mortgagee may agree are to be secured hereby, with interest
thereon at the rate or rates agreed upon; all other existing or future
obligations of Mortgagor, its successors or assigns, to Mortgagee, whether oral
or written, secured or unsecured, direct or indirect, primary or secondary,
absolute or contingent, joint or several, which are now due or to become due,
and regardless of their nature, together with any such future obligations; the
Mortgagor has mortgaged, given, granted, bargained, sold, aliened, enfeoffed,
conveyed, confirmed and assigned, and by these presents does mortgage, give,
grant, bargain, sell, alien, enfeoff,

                                       2
<PAGE>   3

convey, confirm and assign unto the Mortgagee forever all right, title and
interest of the Mortgagor now owned, or hereafter acquired, in and to the
following property, rights and interest (such property, rights and interests
being hereinafter collectively referred to as the "MORTGAGED PROPERTY"):

      (a) The Premises;

      (b) all buildings and improvements now or hereafter located on the
Premises (the "IMPROVEMENTS");

      (c) all of the estate, right, title, claim or demand of any nature
whatsoever of the Mortgagor, either in law or in equity, in possession or
expectancy, in and to the Mortgaged Property or any part thereof;

      (d) all easements, rights-of-way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers, and all
estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments, and appurtenances of any nature whatsoever, in any way belonging,
relating or pertaining to the Mortgaged Property (including, without limitation,
any and all development rights, air rights or similar or comparable rights of
any nature whatsoever now or hereafter appurtenant to the Premises or now or
hereafter transferred to the Premises) and all land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining the
Premises to the center line thereof;

      (e) except as provided in the Purchase Agreement, all machinery,
apparatus, equipment, fittings, fixtures and other property of every kind and
nature whatsoever owned by the Mortgagor, or in which the Mortgagor has or shall
have an interest, now or hereafter located upon the Mortgaged Property, or
appurtenances thereto, and usable in connection with the present or future
operation and occupancy of the Mortgaged Property and all building equipment,
materials and supplies of any nature whatsoever owned by the Mortgagor, or in
which the Mortgagor has or shall have an interest, now or hereafter located upon
the Mortgaged Property (collectively, the "EQUIPMENT"), and the right, title and
interest of the Mortgagor in and to any of the Equipment which may be subject to
any security agreements (as defined in the Uniform Commercial Code of the State
in which the Premises are located), superior in lien to lien of this Mortgage;

      (f) all awards or payments, including interest thereon, and the right to
receive the same, which may be made with respect to the Mortgaged Property,
whether from the exercise of the right of eminent domain (including any transfer
made in lieu of the exercise of said right), or for any other injury to or
decrease in the value of the Mortgaged Property;

      (g) all leases and other agreements affecting the use or occupancy of the
Mortgaged Property now or hereafter entered into (the "LEASES") and the right to
receive and apply the rents, issues and profits of the Mortgaged Property (the
"RENTS") to the payment of the Debt;

      (h) all proceeds of and any unearned premiums on any insurance policies
covering the Mortgaged Property, including, without limitation, the right to
receive and apply the proceeds of any insurance, judgments, or settlements made
in lieu thereof, for damage to the Mortgaged Property; and

      (i) the right, in the name and on behalf of the Mortgagor, to appear in
and defend any action or proceeding brought with respect to the Mortgaged
Property and to commence any action or proceeding to protect the interest of the
Mortgagee in the Mortgaged Property.

      TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the proper use and benefit of the Mortgagee, and the successors and
assigns of the Mortgagee, forever.

                                       3
<PAGE>   4

      AND the Mortgagor covenants and agrees with and represents and warrants to
the Mortgagee as follows:

      1. Payment of Debt. The Mortgagor will pay the Debt at the time and in the
manner provided for its payment in the Note.

      2. Warranty of Title. Subject only to those exceptions to title
specifically set forth in the title policy issued or to be issued by Chicago
Title Insurance Company, commitment No. BT-9951, to the Mortgagee and insuring
the lien of this Mortgage, the Mortgagor warrants the title to the Premises, the
Improvements, the Equipment and the balance of the Mortgaged Property. the
Mortgagor also represents and warrants that (i) the Mortgagor is now, and after
giving effect to this Mortgage, will be in a solvent condition, (ii) the
execution and delivery of this Mortgage by the Mortgagor does not constitute a
"fraudulent conveyance" within the meaning of Title 11 of the United States Code
as now constituted or under any other applicable statute, and (iii) no
bankruptcy or insolvency proceedings are pending or contemplated by or against
the Mortgagor.

      3. Insurance. The Mortgagor shall maintain insurance as required by the
Purchase Agreement, the proceeds of which are to be paid to the Mortgagee for
application as provided by the Purchase Agreement.

      4. Payment of Taxes, etc. The Mortgagor shall pay all taxes, assessments,
water rates, sewer rents and other charges, including vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the Premises, now
or hereafter levied or assessed against the Mortgaged Property (the "TAXES")
prior to the date upon which any fine, penalty, interest or cost may be added
thereto or imposed by law for the nonpayment thereof. The Mortgagor shall
deliver to the Mortgagee, upon request, receipted bills, canceled checks and
other evidence satisfactory to the Mortgagee evidencing that the payment of all
taxes is current.

      5. Escrow Fund. If an Event of Default is outstanding, the Mortgagor will,
at the option of the Mortgagee, pay to the Mortgagee on the first day of each
calendar month one-twelfth of an amount (the "ESCROW FUND") which would be
sufficient to pay the Taxes payable, or estimated by the Mortgagee to be
payable, during the ensuing twelve (12) months. The Mortgagee will apply the
Escrow Fund to the payment of Taxes which are required to be paid by the
Mortgagor pursuant to the provisions of this Mortgage. If the amount of the
Escrow Fund shall exceed the amount of the Taxes payable by the Mortgagor
pursuant to the provisions of this Mortgage, the Mortgagee shall, in its
discretion, (a) return any excess to the Mortgagor, or (b) credit such excess
against future payments to be made to the Escrow Fund or (c) credit such excess
to the Debt. In allocating such excess, the Mortgagee may deal with the person
shown on the records of the Mortgagee to be the owner of the Mortgaged Property.
If the Escrow Fund is not sufficient to pay the Taxes, as the same become
payable, the Mortgagor shall pay to the Mortgagee, upon request, an amount which
the Mortgagee shall estimate as sufficient to make up the deficiency. Until
expended or applied as above provided, any amounts in the Escrow Fund may be
commingled with the general funds of the Mortgagee and shall constitute
additional security for the Debt and shall not bear interest.

      6. Condemnation. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise, the Mortgagor shall continue to
pay the Debt at the time and in the manner provided for its payment in the Note
and this Mortgage and the Debt shall not be reduced until any award or payment
therefor shall have been actually received and applied by the Mortgagee to the
discharge of the Debt. The Mortgagee shall have the option to apply the entire
amount of any such award or payment to the discharge of the Debt whether or not
then due and payable in such order, priority and proportions as the Mortgagee in
its discretion shall deem proper. If the Mortgaged Property is sold, through
foreclosure or otherwise, prior to the receipt by the Mortgagee of such award or
payment, the Mortgagee shall have the right, whether or not a deficiency
judgment

                                       4
<PAGE>   5

on the Note shall have been sought, recovered or denied, to receive such award
or payment, or a portion thereof sufficient to pay the Debt, whichever is less.
The Mortgagor shall file and prosecute its claim or claims for any such award or
payment in good faith and with due diligence and cause the same to be collected
and paid over to the Mortgagee. The Mortgagor hereby irrevocably authorizes and
empowers the Mortgagee, in the name of the Mortgagor or otherwise, to collect
and receipt for any such award or payment and to file and prosecute such claim
or claims. Although it is hereby expressly agreed that the same shall not be
necessary in any event, the Mortgagor shall, upon demand of the Mortgagee, make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning any such award or payment to the Mortgagee, free and
clear of any encumbrances of any kind or nature whatsoever.

      7. Leases and Rents. Subject to the terms of this paragraph, the Mortgagee
waives the right to enter the Mortgaged Property for the purpose of collecting
the Rents, and grants the Mortgagor the right to collect the Rents. The
Mortgagor shall hold the Rents, or an amount sufficient to discharge all current
sums due on the Debt, in trust for use in payment of the Debt. The right of the
Mortgagor to collect the Rents may be revoked by the Mortgagee upon an Event of
Default by giving notice of such revocation to the Mortgagor. Following such
notice the Mortgagee may retain and apply the Rents toward payment of the Debt
in such order, priority and proportions as the Mortgagee, in its discretion,
shall deem proper, or to the operation, maintenance and repair of the Mortgaged
Property, and irrespective of whether the Mortgagee shall have commenced a
foreclosure of this Mortgage or shall have applied or arranged for the
appointment of a receiver. The Mortgagor shall not, without the consent of the
Mortgagee, make, or suffer to be made, any Leases or modify or cancel any Leases
or accept prepayments of installments of the Rents for a period of more than one
(1) month in advance or further assign the whole or any part of the Rents. The
Mortgagor shall (a) fulfill or perform each and every provision of the Leases on
the part of the Mortgagor to be fulfilled or performed, (b) promptly send copies
of all notices of default which the Mortgagor shall send or receive under the
Leases to the Mortgagee, and (c) enforce, short of termination of the Leases,
the performance or observance of the provisions thereof by the tenants
thereunder.

      8. Maintenance of the Mortgaged Property. The Mortgagor shall cause the
Mortgaged Property to be maintained in good condition and repair and will not
commit or suffer to be committed any waste of the Mortgaged Property. The
Improvements and the Equipment shall not be removed, demolished or materially
altered (except for normal replacement of the Equipment), without the consent of
the Mortgagee. The Mortgagor shall promptly comply with all existing and future
governmental laws, orders, ordinances, rules and regulations affecting the
Mortgaged Property, or any portion thereof or the use thereof. The Mortgagor
shall promptly repair, replace or rebuild any part of the Mortgaged Property
which may be damaged or destroyed by fire or other property hazard or casualty
(including any fire or other property hazard or casualty for which insurance was
not obtained or obtainable) or which may be affected by any taking by any public
or quasi-public authority through eminent domain or otherwise, and shall
complete and pay for, within a reasonable time, any structure at any time in the
process of construction or repair on the Premises. The Mortgagor will not,
without obtaining the prior consent of the Mortgagee, initiate, join in or
consent to any private restrictive covenant, zoning ordinance, or other public
or private restrictions, limiting or affecting the uses which may be made of the
Mortgaged Property or any part thereof.

      9. Environmental Provisions. For the purposes of this paragraph the
following terms shall have the following meanings: (i) the term "HAZARDOUS
MATERIAL" shall mean any material or substance including petroleum products
that, whether by its nature or use, is subject to regulation under any
Environmental Requirement, (ii) the term "ENVIRONMENTAL REQUIREMENTS" shall
collectively mean the Spill Compensation and Control Act, N.J.S.A. 58:11-23.11,
et seq., the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource

                                       5
<PAGE>   6

Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.) and the Federal Water Pollution Control Act (33
U.S.C. Section 1251 et seq.), all as presently in effect and as the same may
hereafter be amended, any regulation pursuant thereto, or any other present or
future law, ordinance, rule, regulation, order or directive addressing
environmental, health or safety issues of or by any Governmental Authority,
(iii) the term "GOVERNMENTAL AUTHORITY" shall mean the Federal government, or
any state or other political subdivision thereof, or any agency, court or body
of the Federal government, any state or other political subdivision thereof,
exercising executive, legislative, judicial, regulatory or administrative
functions, and (iv) the term "DILIGENT INQUIRY" shall mean a level of inquiry at
least equal to an environmental site assessment of the Mortgaged Property
conducted in accordance with the Mortgagee's environmental policies and
procedures. The Mortgagor hereby represents and warrants to the Mortgagee that
to the best of the Mortgagor's knowledge after diligent inquiry (i) except for
Hazardous Material used in the ordinary course of Mortgagor's business in
compliance with all Environmental Requirements, no Hazardous Material has been
or is currently located at, in, on, under or about the Mortgaged Property in a
manner which violates any Environmental Requirement, or which requires cleanup
or corrective action of any kind under any Environmental Requirement, (ii) no
releasing, emitting, discharging, leaching, dumping or disposing of any
Hazardous Material from the Mortgaged Property onto or into any other property
or from any other property onto or into the Mortgaged Property has occurred or
is occurring in violation of any Environmental Requirement, (iii) no notice of
violation, lien, complaint, suit, order or other notice with respect to the
environmental condition of the Mortgaged Property is outstanding, nor has any
such notice been issued which has not been fully satisfied and complied with in
a timely fashion so as to bring the Mortgaged Property into full compliance with
all Environmental Requirements, (iv) no lien has been attached to any revenues
of, or any real or personal property owned by, the Mortgagor and located in the
State of New Jersey under any Environmental Requirement, (v) no Hazardous
Material is currently located at, on, in, under or about any real property owned
or occupied by the Mortgagor and located in the State of New Jersey, in a manner
which violates any Environmental Requirement or which requires cleanup or
corrective action of any kind under any Environmental Requirement, (vi)
Mortgagor has, and will continue to have, all necessary federal, state and local
licenses, certificates, permits and approvals relating to its facilities,
business, premises and equipment at the Mortgaged Property and is in compliance
with all applicable consent orders, judgments, injunctions and Environmental
Requirements, and (vii) all closures, terminations and transfers of operations,
as defined by the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et
seq. and the regulations thereunder ("ISRA"), on or relating to the Mortgaged
Property since December 31, 1983 have been completed only after full compliance
with ISRA, to the extent applicable. The Mortgagor shall comply, and shall cause
all tenants or other occupants of the Mortgaged Property to comply, in all
respects with all Environmental Requirements, and will not generate, store,
handle, process, dispose of or otherwise use, and will not permit any tenant or
other occupant of the Mortgaged Property to generate, store, handle, process,
dispose of or otherwise use, Hazardous Materials at, in, on, under or about the
Mortgaged Property in a manner that could lead or potentially lead to the
imposition on the Mortgagor, the Mortgagee or the Mortgaged Property of any
liability or lien of any nature whatsoever under any Environmental Requirement.
All closures, terminations and transfers of operations, as defined by ISRA, on
or relating to the Mortgaged Property during the term of this Mortgage, shall be
completed only after full compliance with ISRA, to the extent applicable, by the
Mortgagor and all tenants or other occupants of the Mortgaged Property to the
extent Mortgagor believes that ISRA is not applicable to any closures,
terminations or transfers of operations at the Mortgaged Property during the
term of this Mortgage, Mortgagor shall obtain a Letter of Non-Applicability as
provided for in ISRA. The Mortgagor shall notify the Mortgagee promptly in the
event of any spill or other release of any Hazardous Material at, in, on, under
or about the Mortgaged Property which is required to be reported to a
Governmental Authority under any Environmental Requirement, will promptly
forward to the Mortgagee copies of any notices received by the Mortgagor
relating to alleged violations of any Environmental Requirement and will
promptly pay when due any fine or assessment against the Mortgagee, the
Mortgagor or the Mortgaged

                                       6
<PAGE>   7

Property relating to any Environmental Requirement. If at any time it is
determined that the past, present or future operation or use of the Mortgaged
Property violates any applicable Environmental Requirement or that there are
Hazardous Materials located at, in, on, under or about the Mortgaged Property
which, under any Environmental Requirement, require special handling in
collection, storage, treatment or disposal, or any other form of cleanup or
corrective action, the Mortgagor shall, within thirty (30) days after receipt of
notice thereof from any Governmental Authority or from the Mortgagee, take, at
its sole cost and expense, such actions as may be necessary to fully comply in
all respects with all Environmental Requirements, provided, however, that if
such compliance cannot reasonably be completed within such thirty (30) day
period, the Mortgagor shall commence such necessary action within such thirty
(30) day period and shall thereafter diligently and expeditiously proceed to
fully comply in all respects and in a timely fashion with all Environmental
Requirements. If the Mortgagor fails to timely take, or to diligently and
expeditiously proceed to complete in a timely fashion, any such action, the
Mortgagee may, in its sole and absolute discretion, make advances or payments
towards the performance or satisfaction of the same, but shall in no event be
under any obligation to do so. All sums so advanced or paid by the Mortgagee
(including, without limitation, counsel and consultant fees and expenses,
investigation and laboratory fees and expenses, and fines or other penalty
payments) and all sums advanced or paid in connection with any judicial or
administrative investigation or proceeding relating thereto, will immediately,
upon demand, become due and payable from the Mortgagor and shall bear interest
at the rate of interest determined in accordance with Section 8.2(c) of the
Purchase Agreement (the "DEFAULT RATE") from the date any such sums are so
advanced or paid by the Mortgagee until the date any such sums are repaid by the
Mortgagor to the Mortgagee. The Mortgagor will execute and deliver, promptly
upon request, such instruments as the Mortgagee may deem useful or necessary to
permit the Mortgagee to take any such action, and such additional notes and
mortgages, as the Mortgagee may require to secure all sums so advanced or paid
by the Mortgagee. If a lien is filed against the Mortgaged Property by any
Governmental Authority resulting from the need to expend or the actual expending
of monies arising from an action or omission, whether intentional or
unintentional, of the Mortgagor or for which the Mortgagor is responsible,
resulting in the releasing, spilling, leaking, leaching, pumping, emitting,
pouring, emptying or dumping of any Hazardous Material into the waters or onto
land located within or without the State where the Mortgaged Property is
located, then the Mortgagor will, within ten (10) days from the date that the
Mortgagor is first given notice that such lien has been placed against the
Mortgaged Property (or within such shorter period of time as may be specified by
the Mortgagee if such Governmental Authority has commenced steps to cause the
Mortgaged Property to be sold pursuant to such lien) either (a) pay the claim
and remove the lien, or (b) furnish a cash deposit, bond, or such other security
with respect thereto as is satisfactory in all respects to the Mortgagee and is
sufficient to effect a complete discharge of such lien on the Mortgaged
Property. As a condition precedent to any action by Mortgagor, whether in equity
or at law, to seek to rescind its interest in the Mortgaged Property, including,
without limitation, any statutory rights of rescission under either N.J.S.A.
13:1K-13(b) or N.J.S.A. 13:18A-22(c), Mortgagor shall notify Mortgagee and
provide replacement collateral which in Mortgagee's sole discretion is
equivalent to the Mortgaged Premises. The Mortgagee may, at its option, if the
Mortgagee reasonably believes that a Hazardous Material or other environmental
condition violates or threatens to violate any Environmental Requirement, cause
an environmental audit of the Mortgaged Property or portions thereof to be
conducted to confirm the Mortgagor's compliance with the provisions of this
paragraph, and the Mortgagor shall cooperate in all reasonable ways with the
Mortgagee in connection with any such audit and shall pay all costs and expenses
incurred in connection therewith. The Mortgagor will defend, indemnify, and hold
harmless the Mortgagee, its employees, agents, officers, and directors, from and
against any and all claims, demands, penalties, causes of action, fines,
liabilities, settlements, damages, costs, or expenses of whatever kind or
nature, known or unknown, foreseen or unforeseen, contingent or otherwise
(including, without limitation, counsel and consultant fees and expenses,
(including, without limitation, counsel and consultant fees and expenses,
investigation and laboratory fees and expenses, court costs, and litigation
expenses) arising out of, in any way related to, (i) any breach by the Mortgagor
of any of the

                                       7
<PAGE>   8

provisions of this paragraph, (ii) the presence, disposal, spillage, discharge,
emission, leakage, release, or threatened release of any Hazardous Material
which is at, in, on, under, about, from or affecting the Mortgaged Property,
including, without limitation, any damage or injury resulting from any such
Hazardous Material to or affecting the Mortgaged Property or the soil, water,
air, vegetation, buildings, personal property, persons or animals located on the
mortgaged Property or on any other property or otherwise, (iii) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to any such Hazardous Material, (iv) any lawsuit brought or
threatened, settlement reached, or order or directive of or by any Governmental
Authority relating to such Hazardous Material, or (v) any violation of any
Environmental Requirement or any policy or requirement of the Mortgagee
hereunder. This indemnification shall, notwithstanding any exculpatory or other
provision of any nature whatsoever to the contrary set forth in the Note, this
Mortgage or any other document or instrument now or hereafter executed and
delivered in connection with the loan evidenced by the Note and secured by this
Mortgage, constitute the personal recourse undertakings, obligations and
liabilities of the Mortgagor. If this Mortgage is foreclosed or the Mortgagor
tenders a deed or assignment in lieu of foreclosure, the Mortgagor shall deliver
the Mortgaged Property to the purchaser at foreclosure or to the Mortgagee, its
nominee, or wholly owned subsidiary, as the case may be, in a condition that
complies in all respects with all Environmental Requirements. The obligations
and liabilities of the Mortgagor under this paragraph shall survive and continue
in full force and effect and shall not be terminated, discharged or released, in
whole or in part, irrespective of whether the Debt has been paid in full and
irrespective of any foreclosure of this Mortgage or acceptance by the Mortgagee,
its nominee or wholly owned subsidiary of a deed or assignment in lieu of
foreclosure and irrespective of any other fact or circumstance of any nature
whatsoever.

      10. Transfer or Encumbrance of the Mortgaged Property. Except for
Permitted Liens, no part of the Mortgaged Property nor any interest of any
nature whatsoever therein shall in any manner be further encumbered, sold,
transferred or conveyed, or permitted to be further encumbered, sold,
transferred, assigned or conveyed without the prior consent of the Mortgagee,
which consent in any and all circumstances may be withheld in the sole and
absolute discretion of the Mortgagee. The provisions of the foregoing sentence
of this paragraph shall apply to each and every such further encumbrance, sale,
transfer, assignment or conveyance, regardless of whether or not the Mortgagee
has consented to, or waived by its action or inaction its rights hereunder with
respect to, any such previous further encumbrance, sale, transfer, assignment or
conveyance, and irrespective of whether such further encumbrance, sale,
transfer, assignment or conveyance is voluntary, by reason of operation of law
or is otherwise made.

      11. Notice. Any notice, request, demand, statement, authorization,
approval or consent made hereunder shall be in writing and shall be hand
delivered or sent by Federal Express, or other reputable courier service, or by
postage pre-paid registered or certified mail, return receipt requested, and
shall be deemed given (i) when received at the following addresses if hand
delivered or sent by Federal Express, or other reputable courier service, and
(ii) three (3) business days after being postmarked and addressed as follows if
sent by registered or certified mail, return receipt requested:

      If to the Mortgagor: IGI, Inc.
                           Wheat Road & Lincoln Avenue
                           Buena, New Jersey 08310
                           Attn:    Paul Woitach, President
                           Telecopy No.: 609-697-1001

      If to the Mortgagee: American Capital Strategies, Ltd.
                           2 Bethesda Metro Center, 14th Floor
                           Bethesda, Maryland 20814

                                       8
<PAGE>   9

                           Attn:  Chairman
                           Telecopy No.: 301-654-6714

      With a copy to:      Arnold & Porter
                           555 12th Street, N.W.
                           Washington, D.C. 20004
                           Attn.:   Samuel A. Flax, Esq.
                           Telecopy No.: 202-942-5999

Each party may designate a change of address by notice to the other party, given
at least fifteen (15) days before such change of address is to become effective.

      12. Sale of Mortgaged Property. If this Mortgage is foreclosed, the
Mortgaged Property, or any interest therein, may, at the discretion of the
Mortgagee, be sold in one or more parcels or in several interests or portions
and in any order or manner.

      13. Changes in Laws Regarding Taxation. In the event of the passage after
the date of this Mortgage of any law of the State in which the Premises are
located deducting from the value of real property for the purpose of taxation
any lien or encumbrance thereon or changing in any way the laws for the taxation
of mortgages or debts secured by mortgages for state or local purposes or the
manner of the collection of any such taxes, and imposing a tax, either directly
or indirectly, on this Mortgage, the Note or the Debt, the Mortgagor shall, if
permitted by law, pay any tax imposed as a result of any such law within the
statutory period or within fifteen (15) days after demand by the Mortgagee,
whichever is less.

      14. No Credits on Account of the Debt. The Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Taxes assessed against the Mortgaged Property or any part thereof
and no deduction shall otherwise be made or claimed from the taxable value of
the Mortgaged Property, or any part thereof, by reason of this Mortgage or the
Debt.

      15. Other Security for the Debt. The Mortgagor shall observe and perform
all of the terms, covenants and provisions contained in the Note and in all
other mortgages and other instruments or documents evidencing, securing or
guaranteeing payment of the Debt, in whole or in part, or otherwise executed and
delivered in connection with the Note, this Mortgage or the loan evidenced and
secured thereby.

      16. Documentary Stamps. If at any time the United States of America, any
state thereof, or any governmental subdivision of any such state, shall require
revenue or other stamps to be affixed to the Note or this Mortgage, the
Mortgagor will pay for the same, with interest and penalties thereon, if any.

      17. Right of Entry. The Mortgagee and its agents shall have the right to
enter and inspect the Mortgaged Property at all reasonable times upon reasonable
prior notice.

      18. Performance of Other Agreements. The Mortgagor shall observe and
perform each and every term to be observed or performed by the Mortgagor
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to the Mortgaged Property.

      19. Events of Defaults. The Debt shall become due at the option of the
Mortgagee upon the occurrence of any one or more of the following events
(collectively, "EVENTS OF DEFAULT"):

                                       9
<PAGE>   10

         (a) the occurrence of an Event of Default under the Purchase Agreement;

         (b) if any representation or warranty in this Mortgage is false or
incorrect in any material respect or the Mortgagor fails to perform or fulfill
any covenant, condition or undertaking continued in this Mortgage; or

         (c) if the Mortgaged Property shall become subject (i) to any tax lien,
other than a lien for local real estate taxes and assessments not due and
payable, or (ii) to any lis pendens, notice of pendency, stop order, notice of
intention to file mechanic's or materialman's lien, mechanic's or materialman's
lien or other lien of any nature whatsoever and the same shall not either be
discharged of record or in the alternative insured over to the satisfaction of
the Mortgagee by the title company insuring the lien of this Mortgage within a
period of ten (10) days after the same is filed or recorded, and irrespective of
whether the same is superior or subordinate in lien or other priority to the
lien of this Mortgage and irrespective of whether the same constitutes a
perfected or inchoate lien or encumbered on the Mortgaged Property or is only a
matter of record or notice.

To the extent any of the above provisions conflict with the Purchase Agreement,
the terms of the Purchase Agreement shall control. Upon the occurrence of any
Event of Default, the Mortgagee may commence an action to foreclose this
Mortgage and/or exercise any and all other rights contained in this Mortgage or
otherwise available at law or in equity to enforce its rights.

      20. Right to Cure Defaults. If default in the performance of any of the
covenants of the Mortgagor herein occurs, the Mortgagee may, at its discretion,
remedy the same and for such purpose shall have the right to enter upon the
Mortgaged Property or any portion thereof without thereby becoming liable to the
Mortgagor or any person in possession thereof holding under the Mortgagor. If
the Mortgagee shall remedy such a default or appear in, defend, or bring any
action or proceeding to protect its interest in the Mortgaged Property or to
foreclose this Mortgage or collect the Debt, the costs and expenses thereof
(including reasonable attorneys' fees to the extent permitted by law), with
interest as provided in this paragraph, shall be paid by the Mortgagor to the
Mortgagee upon demand and shall constitute part of the Debt secured by this
Mortgage. All such costs and expenses incurred by the Mortgagee in remedying
such default or in appearing in, defending, or bringing any such action or
proceeding shall be paid by the Mortgagor to the Mortgagee upon demand, with
interest (calculated for the actual number of days elapsed on the basis of a
360-day year) at a rate per annum equal to the Default Rate.

      21. Appointment of Receiver. The Mortgagee, in any action to foreclose
this Mortgage or upon the actual or threatened waste to any part of the
Mortgaged Property or upon the occurrence of any default hereunder, shall be at
liberty, without notice, to apply for the appointment of a receiver of the
Rents, and shall be entitled to the appointment of such receiver as a matter of
right, without regard to the value of the Mortgaged Property as security for the
Debt, or the solvency or insolvency of any person then liable for the payment of
the Debt.

      22. Non-Waiver. The failure of the Mortgagee to insist upon strict
performance of any term of this Mortgage shall not be deemed to be a waiver of
any term of this Mortgage. The Mortgagor shall not be relieved of the
Mortgagor's obligation to pay the Debt at the time and in the manner provided
for its payment in the Note and this Mortgage by reason of (i) failure of the
Mortgagee to comply with any request of the Mortgagor to take any action to
foreclose this Mortgage or otherwise enforce any of the provisions hereof or of
the Note or any other mortgage, instrument or document evidencing, securing or
guaranteeing payment of the Debt or any portion thereof, (ii) the release,
regardless of consideration, of the whole or any part of the Mortgaged Property
or any other security for the Debt, or (iii) any agreement or stipulation
between the Mortgagee and any subsequent owner or owners of the Mortgaged
Property or other person extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Mortgage or any other mortgage,
instrument or document evidencing, securing or guaranteeing

                                       10
<PAGE>   11

payment of the Debt or any portion thereof, without first having obtained the
consent of the Mortgagor, and in the latter event, the Mortgagor shall continue
to be obligated to pay the Debt at the time and in the manner provided in the
Note and this Mortgage, as so extended, modified and supplemented, unless
expressly released and discharged from such obligation by the Mortgagee in
writing. Regardless of consideration, and without the necessity for any notice
to or consent by the holder of any subordinate lien, encumbrance, right, title
or interest in or to the Mortgaged Property, the Mortgagee may release any
person at any time liable for the payment of the Debt or any portion thereof or
any part of the security held for the Debt and may extend the time of payment or
otherwise modify the terms of the Note or this Mortgage, including, without
limitation, a modification of the interest rate payable on the principal balance
of the Note, without in any manner impairing or affecting this Mortgage or the
lien thereof or the priority of this Mortgage, as so extended and modified, as
security for the Debt over any such subordinate lien, encumbrance, right, title
or interest. The Mortgagee may resort for the payment of the Debt to any other
security held by the Mortgagee in such order and manner as the Mortgagee, in its
discretion, may elect. The Mortgagee may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of the Mortgagee thereafter to foreclose this Mortgage. The Mortgagee
shall not be limited exclusively to the rights and remedies herein stated but
shall be entitled to every additional right and remedy now or hereafter afforded
by law. The rights of the Mortgagee under this Mortgage shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of the Mortgagee shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision.

      23. Liability. If the Mortgagor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several.

      24. Construction. The terms of this Mortgage shall be construed in
accordance with the laws of the State in which the Premises are located.

      25. Security Agreement. This Mortgage constitutes both a real property
mortgage and a "security agreement", within the meaning of the Uniform
Commercial Code, and the Mortgaged Property includes both real and personal
property and all other rights and interest, whether tangible or intangible in
nature, of the Mortgagor in the Mortgaged Property. The Mortgagor by executing
and delivering this Mortgage has granted to the Mortgagee, as security for the
Debt, a security interest in the Equipment. If an Event of Default occurs under
the Purchase Agreement or this Mortgage, the Mortgagee, in addition to any other
rights and remedies which it may have, shall have and may exercise immediately
and without demand, any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Equipment or
any part thereof, and to take such other measures as the Mortgagee may deem
necessary for the care, protection and preservation of the Equipment. Upon
request or demand of the Mortgagee, the Mortgagor shall at its expense assemble
the Equipment and make it available to the Mortgagee at a convenient place
acceptable to the Mortgagee. The Mortgagor shall pay to the Mortgagee on demand
any and all expenses, including legal expenses and attorneys' fees, incurred or
paid by the Mortgagee in protecting its interest in the Equipment and in
enforcing its rights hereunder with respect to the Equipment. Any notice of
sale, disposition or other intended action by the Mortgagee with respect to the
Equipment sent to the Mortgagor in accordance with the provisions of this
Mortgage at least seven (7) days prior to the date of any such sale, disposition
or other action, shall constitute reasonable notice to the Mortgagor, and the
method of sale or disposition or other intended action set forth or specified in
such notice shall conclusively be deemed to be commercially reasonable within
the meaning of the Uniform Commercial Code unless objected to in writing by the
Mortgagor within five (5) days after receipt by the Mortgagor of such notice.
The proceeds of any sale or disposition of the Equipment, or any part thereof,
may be applied by the Mortgagee to the payment of the Debt in such order,
priority and proportions as the Mortgagee in its discretion shall deem proper.

                                       11
<PAGE>   12

      26. Further Acts, etc. The Mortgagor will, at the cost of the Mortgagor,
and without expense to the Mortgagee, do, execute, acknowledge and deliver all
and every such further acts, deeds, conveyances, mortgages, assignments, notices
of assignments, transfers and assurances as the Mortgagee shall, from time to
time, require for the better assuring, conveying, assigning, transferring and
confirming unto the Mortgagee the property and rights hereby mortgaged or
intended now or hereafter so to be, or which the Mortgagor may be or may
hereafter become bound to convey or assign to the Mortgagee, or for carrying out
the intention or facilitating the performance of the terms of this Mortgage or
for filing, registering or recording this mortgage and, on demand, will execute
and deliver and hereby authorizes the Mortgagee to execute in the name of the
Mortgagor to the extent the Mortgagee may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments, to evidence
more effectively the lien hereof upon the Mortgaged Property.

      27. Headings, etc. The headings and captions of various paragraphs of this
Mortgage are for convenience of reference only and are not to be construed as
defined or limiting, in any way, the scope or intent of the provisions hereof.

      28. Filing of Mortgage, etc. The Mortgagor forthwith upon the execution
and delivery of this Mortgage and thereafter, from time to time, will cause this
Mortgage, and any security instrument creating a lien or evidencing the lien
hereof upon the Mortgaged Property and each instrument of further assurance to
be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect, preserve and perfect the lien hereof upon, and the interest of the
Mortgagee in, the Mortgaged Property. The Mortgagor will pay all filing,
registration and recording fees, and all expenses incident to the preparation,
execution and acknowledgment of this Mortgage, any mortgage supplemental hereto,
any security instrument with respect to the Mortgaged Property, and any
instrument of further assurance, and all Federal, state, county and municipal
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of this Mortgage, any mortgage supplemental
hereto, any security instrument with respect to the Mortgaged Property or any
instrument of further assurance. The Mortgagor shall hold harmless and indemnify
the Mortgagee, its successors and assigns, against any liability incurred by
reason of the imposition of any tax on the making and recording of this
Mortgage.

      29. Usury Laws. This Mortgage and the Note are subject to the express
condition that at no time shall the Mortgagor be obligated or required to pay
interest on the principal balance due under the Note at a rate which could
subject the holder of the Note to either civil or criminal liability as a result
of being in excess of the maximum interest rate which the Mortgagor is permitted
by law to contract or agree to pay. If by the terms of this Mortgage or the
Note, the Mortgagor is at any time required or obligated to pay interest on the
principal balance due under the Note at a rate in excess of such maximum rate,
the rate of interest under the Note shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance of the Note.

      30. Recovery of Sums Required To Be Paid. The Mortgagee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of the Mortgagee thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by the Mortgagor existing at the time such
earlier action was commenced.

                                       12
<PAGE>   13

      31. Authority. The Mortgagor (and the undersigned representative of the
Mortgagor, if any) has full power, authority and legal right to execute this
Mortgage, and to mortgage, give, grant, bargain, sell, alien, enfeoff, convey,
confirm and assign the Mortgaged Property pursuant to the terms hereof and to
keep and observe all of the terms of this Mortgage on the Mortgagor's part to be
performed.

      32. Actions and Proceedings. The Mortgagee shall have the right to appear
in and defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of the
Mortgagor, which the Mortgagee, in its discretion, feels should be brought to
protect its interest in the Mortgaged Property.

      33. Inapplicable Provisions. If any term, covenant or condition of this
Mortgage shall be held to be invalid, illegal or unenforceable in any respect,
this Mortgage shall be construed without such provision.

      34. Duplicate Originals. This Mortgage may be executed in any number of
duplicate originals and each such duplicate original shall be deemed to
constitute but one and the same instrument.

      35. Certain Definitions. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage shall be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean each the Mortgagor and any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein; the word
"Mortgagee" shall mean the Mortgagee or any subsequent holder of the Note; the
word "Note" shall mean the Note and any other evidence of indebtedness secured
by this Mortgage; the word "Guarantor" shall mean each person guaranteeing
payment of the Debt or any portion thereof or performance by the Mortgagor of
any of the terms of this Mortgage and their respective heirs, executors,
administrators, legal representatives, successors and assigns; the word "person"
shall include an individual, corporation, partnership, trust, unincorporated
association, government, governmental authority, or other entity; the words
"Mortgaged Property" shall include any portion of the Mortgaged Property or
interest therein; and the word "Debt" shall mean all sums secured by this
Mortgage; and the word "default" shall mean the occurrence of any default by the
Mortgagor or other person in the observance or performance of any of the terms,
covenants or provisions of the Purchase Agreement, the Note or this Mortgage on
the part of the Mortgagor or such other person to be observed or performed
without regard to whether such default constitutes or would constitute upon
notice or lapse of time, or both, an Event of Default under this Mortgage.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.

      36. Waiver of Notice. The Mortgagor shall not be entitled to any notices
of any nature whatsoever from the Mortgagee except with respect to matters for
which this Mortgage specifically and expressly provides for the giving of notice
by the Mortgagee to the Mortgagor, and the Mortgagor hereby expressly waives the
right to receive any notice from the Mortgagee with respect to any matter for
which this Mortgage does not specifically and expressly provide for the giving
of notice by the Mortgagee to the Mortgagor.

      37. No Oral Change. This Mortgage may only be modified, amended or changed
by an agreement in writing signed by the Mortgagor and the Mortgagee, and may
only be released, discharged or satisfied of record by an agreement in writing
signed by the Mortgagee. No waiver of any term, covenant or provision of this
Mortgage shall be effective unless given in writing by the Mortgagee and if so
given by the Mortgagee shall only be effective in the specific instance in which
given. The Mortgagor acknowledges that the Note, this Mortgage, the Purchase
Agreement, and the other documents and instruments executed and delivered in
connection therewith or otherwise

                                       13
<PAGE>   14

in connection with the loan secured hereby set forth the entire agreement and
understanding of the Mortgagor and the Mortgagee with respect to the loan
secured hereby and that no oral or other agreements, understanding,
representation or warranties exist with respect to the loan secured hereby other
than those set forth in the Note, this Mortgage, the Purchase Agreement and such
other executed and delivered documents and instruments.

      38. Absolute and Unconditional Obligation. The Mortgagor acknowledges that
the Mortgagor's obligation to pay the Debt in accordance with the provision of
the Note and this Mortgage is and shall at all times continue to be absolute and
unconditional in all respects, and shall at all times be valid and enforceable
irrespective of any other agreements or circumstances of any nature whatsoever
which might otherwise constitute a defense to the Note or this Mortgage or the
obligation of the Mortgagor thereunder to pay the Debt or the obligations of any
other person relating to the Note or this Mortgage or the obligations of the
Mortgagor under the Note or this Mortgage or otherwise with respect to the loan
secured hereby, and the Mortgagor absolutely, unconditionally and irrevocably
waives any and all right to assert any defense, setoff, counterclaim or
crossclaim of any nature whatsoever with respect to the obligation of the
Mortgagor to pay the Debt in accordance with the provisions of the Note and this
Mortgage or the obligations of any other person relating to the Note or this
Mortgage or obligations of the Mortgagor under the Note or this Mortgage or
otherwise with respect to the loan secured hereby in any action or proceeding
brought by the Mortgagee to collect the Debt, or any portion thereof, or to
enforce, foreclose and realize upon the lien and security interest created by
this Mortgage or any other document or instrument securing repayment of the
Debt, in whole or in part.

      39. Waiver of Trial by Jury. The Mortgagor hereby irrevocably and
unconditionally waives, and the Mortgagee by its acceptance of the Note and this
Mortgage irrevocably and unconditionally waives, any and all rights to trial by
jury in any action, suit or counterclaim arising in connection with, out of or
otherwise relating to the Note, this Mortgage the Purchase Agreement, any other
document or instrument now or hereafter executed and delivered in connection
therewith or the loan secured by this Mortgage.

      40. Waiver of Statutory Rights. The Mortgagor shall not and will not apply
for or avail itself of any appraisement, valuation, stay, extension or exemption
laws, or any so-called "Moratorium Laws", now existing or hereafter enacted, in
order to prevent or hinder the enforcement or foreclosure of this Mortgage, but
hereby waives the benefit of such laws to the full extent that the Mortgagor may
do so under applicable law. The Mortgagor for itself and all who may claim
through or under it waives any and all right to have the property and estates
comprising the Mortgaged Property marshaled upon any foreclosure of the lien of
this Mortgage and agrees that any court having jurisdiction to foreclose such
lien may order the Mortgaged Property sold as an entirety. The Mortgagor hereby
waives for itself and all who may claim through or under it, and to the full
extent the Mortgagor may do so under applicable law, any and all rights of
redemption from sale under any order of decree of foreclosure of this Mortgage
or granted under any statute now existing or hereafter enacted.

      41. True Copy. The Mortgagor acknowledges receipt of a true copy of this
Mortgage without charge.

      42. Future Disbursements. This Mortgage secures a loan which by its terms
is subject to modification as defined in N.J.S.A. 46:9-8.1 et seq.

      43. Relationship. The relationship of the Mortgagee to the Mortgagor
hereunder is strictly and solely that of lender and borrower and nothing
contained in the Note, this Mortgage, the Purchase Agreement or any other
document or instrument now or hereafter executed and delivered in connection
therewith or otherwise in connection with the loan secured hereby is intended to
create, or shall in any event or under any circumstance be construed as
creating, a partnership,

                                       14
<PAGE>   15

joint venture, tenancy-in-common, joint tenancy or other relationship of any
nature whatsoever between the Mortgagee and the Mortgagor other than as lender
and borrower.

      IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the day
and year first above written. Mortgagor acknowledges receipt of a true copy of
this Mortgage.

Attest:                                              IGI, INC.

By: /s/ ROBERT E. McDANIEL                  By: /s/ MANFRED HANUSCHEK
    ----------------------------                --------------------------

Name: ROBERT E. McDANIEL                    Name: MANFRED HANUSCHEK
      --------------------------                  -----------------------

Title: GENERAL COUNSEL                      Title: CFO
       -----------------------                     -----------------------

                                       15
<PAGE>   16

                            CORPORATE ACKNOWLEDGMENT

STATE OF                            :
                          :  ss
COUNTY OF                           :

      On this, the 29th day of October, 1999, before me, the subscriber, a
notary public in and for the State and County aforesaid, personally appeared
_________________________, a _______________ of IGI, Inc., a Delaware
corporation, and who acknowledged that _____, as such ___________________, being
authorized to do so, executed the foregoing instrument on behalf of said
corporation for the purposes therein contained.

      WITNESS my hand and seal the day and year aforesaid.

                                            Notary Public

                                            My Commission Expires:

                                       16
<PAGE>   17

                                    EXHIBIT A

                            (Description of Premises)

                                       17

<PAGE>   18
EXHIBIT 10.50

                                   DESCRIPTION

All that certain tract, lot and parcel of land lying and being in the Borough of
Buena, County of Atlantic, and State of New Jersey, being more particularly
described as follows:

BEGINNING at a point in the Northeasterly line of Harding Highway, also known as
N.J.S.H. Route 40, (66 feet wide - Tax Map), at the intersection of the
Southeasterly line of Catherine Avenue (50 feet wide - Tax Map) and extending:

1.       North 51 degrees 33 minutes 58 seconds East, along the Southeasterly
         line of Catherine Avenue, 550.67 feet to a point in the same, at a
         corner to Lot 28, block 205; thence

2.       South 37 degrees 41 minutes 02 seconds East, along the lie of Lots 27
         and 28, Block 205, 254.30 feet to a corner to Lot 27, Block 205; thence

3.       North 52 degrees 08 minutes 58 seconds East, along the line of Lot 27,
         Block 205, 79.96 feet to a point in the same, at a corner to Lot 16.01,
         Block 205; thence

4.       South 38 degrees 05 minutes 37 seconds East, along the line of Lot
         16.01, Block 205, 335.24 feet to a point in the same, at a corner to
         Lot 3, Block 205; thence

5.       South 51 degrees 30 minutes 00 seconds West, along the line of Lot 3,
         Block 205, 432.36 feet to a corner to same; thence

6.       North 37 degrees 45 minutes 00 seconds West, along the same 96.50 feet
         to a point; thence

7.       South 51 degrees 30 minutes 00 seconds West, still along the line of
         Lot 3, Block 205, 200.00 feet to a corner to same, in the Northeasterly
         line of Harding Highway 9N.J.S.H. Route 40); thence

8.       North 37 degrees 45 minutes 00 seconds West, along the Northeasterly
         line of Harding Highway 9N.J.S.H. Route 40) 494.61 feet to the point of
         Beginning.

NOTE: FOR INFORMATION PURPOSES ONLY: Being Lot 1 in Block 205, Tax map of the
Borough of Buena.

Title of record to Tract No. 3, became vested in Immunogenetics, Inc., a
Corporation of the State of Delaware, by Deed from Medatz, Inc., a corporation
of Delaware dated 12/31/87 and recorded 2/18/88 in Deed Book 4630, page 309.
<PAGE>   19
EXHIBIT 10.50

                                   DESCRIPTION

All that certain tract, lot and parcel of land lying and being in the Borough of
Buena, County of Atlantic, and State of New Jersey, being more particularly
described as follows:

BEGINNING at a spike at the intersection of the centerline of Wheat Road and
Lincoln Avenue as widened 35 feet from the centers of both and extending; thence

1.       South 46 degrees 40 minutes West along the center of Lincoln Avenue,
         444.46 feet to a plug; thence

2.       South 43 degrees 20 minutes East, along Lot 22.02, 476.03 feet to a
         steel pin; thence

3.       South 46 degrees 40 minutes West, along Lot 22.02, 190 feet to a steel
         pin; thence

4.       South 43 degrees 20 minutes East, along Lot 22, 441.02 feet to a steel
         pin; thence

5.       North 46 degrees 40 minutes, along Lot 6, 285 feet to a steel pin;
         thence

6.       North 43 degrees 20 minutes West, along Lot 1, 364.74 feet to a
         concrete stone; thence

7.       North I degree 20 minutes West, along Lot 1, 644.20 feet to a plug in
         the center of Wheat Road; thence

8.       South 88 degrees 40 minutes West, along the center of Wheat Road,
         109.88 feet to the center of Lincoln Avenue and the point of Beginning.

NOTE: FOR INFORMATION PURPOSES ONLY: Being Lots 22.01, 23.01, 23 and a portion
of Lot 22 in Block 5501, Tax Map of Buena Vista Township.

Title of record to Tract No. 4 became vested in Immunogenetics, Inc., by Deed of
Subdivision from Immunogenetics, Inc., dated 7/6/95 and recorded 7/11/95 in Deed
Book 5828, Page 92.
<PAGE>   20
EXHIBIT 10.50

                                   DESCRIPTION

All that certain tract, lot and parcel of land lying and being in the Borough of
Buena, County of Atlantic, and State of New Jersey, being more particularly
described as follows:

Beginning at a plug in the center of Lincoln Avenue as widened 35 feet from the
center of same, South 46 degrees 40 minutes West, 444.46 feet from the center of
Wheat Road and extending; thence

1.       South 46 degrees 40 minutes West along the center of Lincoln Avenue,
         190 feet to a plug; thence

2.       South 43 degrees 20 minutes East, along Lot 22, 476.03 feet to a point;
         thence

3.       North 46 degrees 40 minutes East, along same, 190 feet to a point;
         thence

4.       North 43 degrees 20 minutes West, along Lot 22.01, 476.03 feet to the
         center of Lincoln Avenue and the place of Beginning.

NOTE: FOR INFORMATION PURPOSES ONLY: Being Lot 22.02 in Block 5501, Tax map of
Buena Vista Township.

Title of record to Tract No. 5 became vested in Immunogenetics, Inc., by Deed
from Baruffi Associates, a New Jersey partnership dated 11/13/95 and recorded
11/17/95 in Deed Book 5888, Page 113.

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