Document:

<PAGE>   1
EXHIBIT *(10.31)

                                PLEDGE AGREEMENT

         This Pledge Agreement ("Pledge Agreement") is made by IGEN, INC.
("Pledgor") and delivered to FLEET CAPITAL CORPORATION ("Lender") and is given
and is intended to provide additional security for all Obligations under a
certain Loan and Security Agreement (as it may from time to time be
supplemented, amended or replaced, the "Loan Agreement") dated October 29, 1999
among IGI, INC.; IGEN, INC.; IMMUNOGENETICS, INC.; and BLOOD CELLS, INC.
(collectively, "Borrowers") and Lender. All capitalized terms not otherwise
defined herein shall have the respective meanings ascribed thereto in the Loan
Agreement.

         Pledgor, intending to be legally bound hereby, and for other good and
sufficient consideration, the receipt of which is hereby acknowledged, does
hereby assign, pledge, hypothecate, deliver and set over to Lender, its
successors and assigns, for the ratable benefit of the Lenders under the Loan
Agreement, the property described in the Schedule of Collateral attached hereto
and made part hereof, including all additions, exchanges, replacements and
substitutions therefor, dividends and distributions with respect thereto,
interest thereon and the proceeds thereof, (collectively, the "Collateral") and
Pledgor hereby grants to Lender a continuing lien and security interest in the
Collateral as collateral security for the payment and performance of all of the
Obligations of all Borrowers under the Loan Agreement.

         (1) Pledgor hereby represents and warrants that:

            (a) Except as pledged herein, Pledgor has not sold, assigned,
transferred, pledged or granted any option or security interest in or otherwise
hypothecated the Collateral in any manner whatsoever and the Collateral is
pledged herewith free and clear of any and all liens, security interests,
encumbrances, claims, pledges, restrictions, legends, and options (except for
any security interests or liens granted to American Capital under the
Subordinated Debt Documents, which security interests and liens are subordinate
to those of Lender);

             (b) Pledgor has the full power and authority to execute, deliver,
and perform under this Pledge Agreement and to pledge the Collateral hereunder;

             (c) This Pledge Agreement constitutes the valid and binding
obligation of Pledgor, enforceable in accordance with its terms, and the pledge
of the Collateral referred to herein is not in violation of and shall create any
default under any agreement, undertaking or obligation of Pledgor;

             (d) The Collateral has been duly and validly authorized and/or
issued by the issuer thereof and such Collateral is fully paid for and
non-assessable, and none of the Collateral is subject to any setoffs, defenses,
offsets, deductions or counterclaims of any kind;
<PAGE>   2
             (e) Any capital stock or other equity interests of any Person being
pledged by Pledgor hereunder is one hundred percent (100%) of the issued and
outstanding stock or other equity interests of such Person that is owned by the
Pledgor; and

             (f) Pledgor is, contemporaneously with the execution hereof,
delivering to Lender all certificates or instruments representing or evidencing
the Collateral, accompanied by duly executed instruments of transfer or
assignments in blank, to be held by Lender in accordance with the terms hereof.

         (2) The pledge described herein shall continue in effect to secure all
Obligations from time to time incurred or arising unless and until all
Obligations have been indefeasibly paid and satisfied in full and any commitment
of Lender in connection therewith has been terminated.

         (3) If an Event of Default occurs and is continuing under the Loan
Agreement, then Lender may, at its sole option, exercise from time to time with
respect to the Collateral any and/or all rights and remedies available to it
hereunder, under the Uniform Commercial Code, or otherwise available to it, at
law or in equity, including without limitation the right to dispose of the
Collateral at public or private sale(s) or other proceedings, and Pledgor agrees
that, if permitted by law, Lender or its nominee may become the purchaser at any
such sale(s).

         (4)(a) In addition to all other rights granted to Lender herein or
otherwise available at law or in equity, Lender shall have the following rights,
as they may be applicable to the Collateral, each of which may be exercised at
Lender's sole discretion (but without any obligation to do so), at any time
following the occurrence and during the continuance of an Event of Default under
the Loan Agreement, without further consent of Pledgor: (i) to transfer the
whole or any part of the Collateral into the name of itself or its nominee or to
conduct a sale of the Collateral pursuant to the Uniform Commercial Code as
enacted in Pennsylvania or pursuant to any other applicable law; (ii) to vote
the Collateral; (iii) to notify the persons obligated on any of the Collateral
to make payment to Lender of any amounts due or to become due thereon; and (iv)
to release, surrender or exchange any of the Collateral at any time, or to
compromise any dispute with respect to the same. Lender may proceed against the
Collateral, or any other collateral securing the Obligations, in any order, and
against Pledgor and any other obligors, jointly and/or severally, in any order
to satisfy the Obligations. Pledgor waives and releases any right to require
Lender to first collect any of the Obligations secured hereby from any other
collateral of Pledgor or any other party securing the Obligations under any
theory of marshalling of assets, or otherwise. All rights and remedies of Lender
are cumulative, not alternative.

            (b) Pledgor hereby appoints Lender its attorney-in-fact to arrange,
at Lender's option, during the continuance of any Event of Default under the
Loan Agreement, (i) to effectuate the transfer of the Collateral on the books of
the issuer thereof to the name of Lender or to the name of Lender's nominee,
designee or assignee; (ii) to endorse the certificates or instruments
representing the Collateral, or to execute separate instruments of transfer and
assignment, in the name of Pledgor for transfer to a third party; (ii) to
endorse and collect checks payable to Pledgor

                                       2-
<PAGE>   3
representing distributions or other payments on the Collateral, and (iii) to
carry out the terms and provisions hereof.

         (5) The proceeds of any Collateral received by Lender at any time after
the occurrence and during the continuance of an Event of Default under the Loan
Agreement, whether from the sale of Collateral or otherwise, may be applied to
or on account of the Obligations and in such order as Lender may elect. In
addition, Lender may, in its discretion, apply any such proceeds to or on
account of the payment of all reasonable costs and expenses (including
attorneys' fees and legal expenses) which may be incurred by Lender in the
enforcement, protection, preservation or defense of Lender's rights hereunder,
including without limitation the custody, preservation, use, operation,
preparation for sale or sale of the Collateral.

         (6) Pledgor recognizes that Lender may be unable to effect, or may
effect only after such delay which would adversely affect the value that might
be realized from the Collateral, a public sale of all or part of the Collateral
by reason of certain prohibitions contained in the Securities Act of 1933, as
amended, and may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for their own account, for investment and not with a
view to the distribution or resale thereof. Pledgor agrees that any such private
sale may be at prices and on terms less favorable to Lender or the seller than
if sold at public sales, and therefore recognizes and confirms that such private
sales shall not be deemed to have been made in a commercially unreasonable
manner solely because they were made privately. Pledgor agrees that Lender has
no obligation to delay the sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such securities
for public sale under the Securities Act of 1933, as amended.

         (7) In the event that any stock dividend, reclassification,
readjustment or other change is made or declared in the capital structure of, or
Pledgor acquires or in any other manner receives additional shares of stock in,
any corporation described in the attached Schedule of Collateral, or any option
included within the Collateral is exercised, or both, all new, substituted and
additional shares, or other securities, issued by reason of any such change or
exercise shall be delivered to and held by Lender under the terms hereof in the
same manner as the Collateral originally pledged hereunder.

         (8) So long as no Event of Default has occurred and is continuing under
the Loan Agreement, and, until Lender notifies Pledgor in writing of the
exercise of its rights hereunder, Pledgor shall retain the sole right to vote
the Collateral and exercise all rights of ownership with respect to all
corporate questions for all purposes not inconsistent with the terms hereof.

         (9) Lender shall have no obligation to take any steps to preserve,
protect or defend the rights of Pledgor or Lender in the Collateral against
other parties. Lender shall have no obligation to sell or otherwise deal with
the Collateral at any time for any reason, whether or not upon request of
Pledgor, and whether or not the value of the Collateral, in the opinion of
Lender or Pledgor, is more or less than the aggregate amount of the Obligations
secured hereby, and any such refusal or inaction by Lender shall not be deemed a
breach of any duty which Lender may

                                       3-
<PAGE>   4
have under law to preserve the Collateral. Unless expressly set forth herein, no
duty, obligation or responsibility of any kind is intended to be delegated to or
assumed by Lender at any time with respect to the Collateral.

         (10) To the extent Lender is required by law to give Pledgor prior
notice of any public or private sale, or other disposition of the Collateral,
Pledgor agrees that ten (10) days' prior written notice to Pledgor shall be a
commercially reasonable and sufficient notice of such sale or other intended
disposition. Pledgor further recognizes and agrees that if the Collateral, or a
portion thereof, threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Pledgor shall not be entitled to any
prior notice of sale or other intended disposition.

         (11) Pledgor shall indemnify, defend and hold harmless Lender from and
against any and all claims, losses and liabilities resulting from any breach by
Pledgor of Pledgor's representations and covenants under this Pledge Agreement,
other than to the extent such arise from Lender's own gross negligence of
willful misconduct.

         (12) Pledgor hereby waives notice of (a) acceptance of this Pledge
Agreement, (b) the existence and incurrence from time to time of any Obligations
under the Loan Agreement, (c) the existence of any Event of Default, the making
of demand, or the taking of any action by Lender under the Loan Agreement, and
(d) demand and default hereunder.

         (13) Pledgor hereby consents and agrees that Lender may at any time or
from time to time in its sole discretion (a) settle, compromise or grant
releases for any Obligations and/or any person or persons liable for payment of
any Obligations, (b) exchange, release, surrender, sell, subordinate or
compromise any collateral of any party now or hereafter securing any of the
Obligations and (c) apply any and all payments received from any source by
Lender at any time against the Obligations in any order as Lender may determine;
all of the foregoing in such manner and upon such terms as Lender may determine
and without notice to or further consent from Pledgor and without impairing or
modifying the terms and conditions of this Pledge Agreement which shall remain
in full force and effect.

         (14) This Pledge Agreement shall remain in full force and effect and
shall not be limited, impaired or otherwise affected in any way by reason of (a)
any delay in making demand on Borrowers or Pledgor for or delay in enforcing or
failure to enforce, performance or payment of Borrowers' or Pledgor's
obligations, of (b) any failure, neglect or omission on Lender's part to perfect
any lien upon, protect, exercise rights against, or realize on, any property of
Borrowers, Pledgor or any other party securing the Obligations.

         (15) Pledgor covenants and agrees that Pledgor shall not, without the
prior written consent of Lender, sell, encumber or grant any lien, security
interest or option on or with respect to any of the Collateral.

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         (16) Any failure of or delay by Lender to exercise any right or remedy
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right or remedy at any other time.

         (17) This Pledge Agreement constitutes the entire agreement between the
parties hereto regarding the subject matter hereof and may be modified only by a
written instrument signed by the party or parties against whom any change is
sought to be enforced.

         (18) This Pledge Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, and the provisions
hereof shall be deemed severable in the event of the invalidity of any
provision. PLEDGOR AND LENDER EACH IRREVOCABLY WAIVE ANY AND ALL RIGHT TO A JURY
TRIAL IN ANY ACTION, PROCEEDING OR CONTROVERSY ARISING FROM OR RELATING TO THIS
PLEDGE AGREEMENT.

         (19) All communications which Lender may provide to Pledgor herein
shall be sent to Pledgor at its respective address set forth below.

         (20) This Pledge Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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         This Pledge Agreement is executed this 29th day of October, 1999.

                               IGEN, INC.

                               BY: /s/ MANFRED HANUSCHEK
                                   ---------------------------------------
                                   Name: MANFRED HANUSCHEK
                                   Title: CFO

                               Attest: /s/ LINDA HANSON
                                       -----------------------------------

                               Address: IGEN, Inc.
                                        Wheat Road and Lincoln Avenue
                                        Buena, NJ 08310
<PAGE>   7
                                     S - 1

                             SCHEDULE OF COLLATERAL

         The following Collateral is hereby pledged by Pledgor to Lender
pursuant to the Pledge Agreement to which this Schedule is attached:

CAPITAL STOCK AND EQUITY INTERESTS

<TABLE>
<CAPTION>
                                                                                 % of Shares
                                                  Class            Number        Outstanding
Issuer                 Certificate(s) No.        of Stock        of Shares        of Issuer
------                 ------------------        --------        ---------       -----------
<S>                    <C>                       <C>             <C>             <C>
</TABLE>

PROMISSORY NOTES AND DEBT INSTRUMENTS

<TABLE>
<CAPTION>
Issuer                       Date of Issuance                   Principal Amount
------                       ----------------                   ----------------
<S>                          <C>                                <C>
</TABLE><PAGE>   1
EXHIBIT *(10.32)

                                    IGI, INC.

                                       to

                            FLEET CAPITAL CORPORATION

               ==================================================

                     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:

                          Blank Rome Comisky & McCauley LLP
                          a Pennsylvania LLP
                          Woodland Falls Corporate Park
                          210 Lake Drive East
                          Cherry Hill, New Jersey 08002
                          Attention:    Peter W. Leibundgut, Esquire
<PAGE>   2
                     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 FLEET CAPITAL CORPORATION, a
         Rhode Island corporation, having an office at 200 Glastonbury
         Boulevard, Glastonbury, Connecticut 06033 (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 Loan and Security Agreement between Mortgagor and Mortgagee of
even date herewith as same may, from time to time, be amended or restated (the
"Loan 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 Credit Facility in the aggregate outstanding principal amount of Twenty Two
Million Dollars ($22,000,000.00), lawful money of the United States of America,
which sum is comprised of (i) a Term Loan A in the amount of $6,650,000; (ii) a
Term Loan B in the amount of $350,000; (iii) Revolving Credit Facility in the
maximum amount of $12,000,000; and (iv) Capital Expenditure Loans in the
aggregate amount of $3,000,000, or so much thereof as may be advanced in
accordance with the provisions of the Loan Agreement, 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")
according to certain promissory notes dated the date hereof or given in the
future by the Mortgagor to the Mortgagee (collectively, as they may be amended
or restated from time to time, the "NOTE"), 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, 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,

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<PAGE>   3
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 Loan 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.

         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.

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<PAGE>   4
         3. Insurance. The Mortgagor shall maintain insurance as required by the
Loan Agreement, the proceeds of which are to be paid to the Mortgagee for
application as provided by the Loan 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 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

                                       4
<PAGE>   5
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 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

                                       5
<PAGE>   6
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 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 Default Rate (as defined in the Loan Agreement) 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

                                       6
<PAGE>   7
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
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.

                                       7
<PAGE>   8
         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:       Fleet Capital Corporation
                                    200 Glastonbury Boulevard
                                    Glastonbury, Connecticut
                                    Attn.:  Walter Schuppe
                                    Telecopy No.: 860-657-7759/7689

         With a copy to:            Blank Rome Comisky & McCauley LLP
                                    One Logan Square
                                    Philadelphia, Pennsylvania 19103
                                    Attn:   Harvey I. Forman, Esquire
                                    Telecopy No.: 215-569-5522

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.

                                       8
<PAGE>   9
         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"):

             (a) the occurrence of an Event of Default under the Loan 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 Loan Agreement, the
terms of the Loan 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 set forth in the
Loan Agreement.

         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.

                                       9
<PAGE>   10
         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 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 principle 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 Loan 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

                                       10
<PAGE>   11
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.

         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.

         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.

                                       11
<PAGE>   12
         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 Revolving Credit Note, Term Loan Note Capital
Expenditure Note or 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 Loan Agreement, 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 Loan
Agreement, and the other documents and instruments executed and delivered in
connection therewith or otherwise 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 Loan
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

                                       12
<PAGE>   13
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 Loan 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.

         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 Loan 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, 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.

                                       13
<PAGE>   14
         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
       -------------------------                  ------------------------

                                       14
<PAGE>   15
                            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:

                                       15
<PAGE>   16
                                    EXHIBIT A

                            (Description of Premises)
<PAGE>   17
EXHIBIT 10.32

                                   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>   18
EXHIBIT 10.32

                                   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>   19
EXHIBIT 10.32

                                   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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