This Second Amendment to Loan and Security Agreement (this "Agreement") dated as of June 23, 2000 by and between Fleet Capital Corporation (the "Lender") and IGI, Inc., IGEN, Inc., Immunogenetics, Inc. and Blood Cells, Inc. (each a "Borrower" and collectively the "Borrowers"), as parties to that certain Loan and Security Agreement dated October 29, 1999, as amended by that certain Amendment to Loan and Security Agreement dated as of April 12, 2000 (as amended and in effect from time to time, the "Loan Agreement").

      WHEREAS, the Borrowers have requested an Overadvance from the Lender, and

      WHEREAS, based upon their financial analysis, the Borrowers anticipate that they will be in violation of certain of the financial covenants contained in the Loan Agreement for the period ending May 31, 2000; and

      WHEREAS, the Borrowers have advised the Lender that they are also preparing to sell (the "Vineland Sale") all of the business and substantially all the assets of IGI's Vineland Laboratories division (collectively, the "Vineland Collateral"); and

      WHEREAS, the Borrowers have requested that the Lender amend certain terms and conditions contained in the Loan Agreement to, among other things, (i) make the Overadvance to the Borrowers, (ii) forbear from enforcing such anticipated Events of Default and (iii) permit the Vineland Sale, all in accordance with the terms hereof; and

      WHEREAS, the Lender is agreeable to amend certain terms and conditions of the Loan Agreement to, among other things, (i) make the Overadvance to the Borrowers, (ii) forbear from enforcing such anticipated Events of Default and (iii) permit the Vineland Sale, all on the terms and conditions set forth herein.

      NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follow:

      Section 1.    Definitions.  Capitalized terms used herein without definition that are defined in the Loan Agreement shall have the same meanings herein as therein.

      Section 2.    Release of IMX Stock.

      So long as no Default or Event of Default has occurred and is continuing (other that the existance of a Specified Default (as defined below) occurring prior to the Forbearance Termination Date (as defined below), if IGI sells the 271,714 shares of the common stock of IMX Corporation owned by IGI for the fair market value thereof, the Lender agrees to release its security interest in and lien on such 271,714 shares in exchange for the Lender's contemporaneous receipt of the proceeds (net of broker's fees) received by IGI in connection with the sale of such stock by IGI (the "IMX Stock Sale Proceeds"). The IMX Sale Proceeds shall be applied by the Lender to the amounts outstanding under the Overadvance and the amount of the permitted Overadvance shall be permanently reduced by the amount of the IMX Stock Sale Proceeds.

      Section 3.    Release of Vineland Collateral.

      So long as no Default or Event Default has occurred and is continuing (other than the existence of a Specified Default (as defined below) occurring prior to the Forbearance Termination Date (as defined below)), if IGI consummates the Vineland Sale, pursuant to a purchase and sale agreement that is satisfactory to the Lender in form, scope, and substance (the "Vineland Purchase and Sale Agreement"), the Lender agrees to release its security interest in and liens on the Vineland Collateral upon Lender's receipt of Net Cash Sale Proceeds in an amount sufficient to repay the Obligations as follows: (1) first, to repay in full the Overadvance outstanding on such date, (2) second, to repay the Revolving Credit Loans outstanding on such date in an amount equal to 85% of the amount of the Eligible Accounts (as reported in the most recent Borrowing Base Certificate delivered to the Lender) sold in connection with the Vineland Sale, (3) third, to repay the Revolving Credit Loans outstanding on such date in an amount equal to 100% of the amount loaned by the Lender against Inventory (as reported in the most recent Borrowing Base Certificate delivered to the Lender) sold in connection with the Vineland Sale, (4) fourth, to repay in full the amount of the Capital Expenditure Loans outstanding on such date, (5) fifth, to repay in full the amount of the Term Loan B outstanding on such date, (6) sixth, to repay the Term Loan A in an amount sufficient to reduce the outstanding principal amount of the Term Loan A to an amount outstanding on such date of not more than $2,705,000 and (7) finally, to apply the balance of the Net Cash Sale Proceeds to the Revolving Credit Loans outstanding on such date, except that the Borrowers may use not more than $826,798.98 of the Net Cash Sale Proceeds to pay the Additional Subordinated Loan (as defined below) including the interest due and payable on July 31, 2000 on the Subordinated Debt in an amount not to exceed $310,000 prior to the repayment of the Revolving Credit Loans under this clause (7). As used herein, "Net Cash Sale Proceeds" shall mean the cash proceeds received from the Vineland Sale, net of broker's fees and other out-of-pocket costs and expenses payable in cash in connection with the closing of the Vineland Sale, such out-of-pocket costs and expenses to be approved by the Lender in writing, such approval not to be unreasonably withheld.

      Section 4.    Amendments to the Loan Agreement.

      Section 5.    Future Forbearance. If any of the Events of Default listed on Schedule 1 attached hereto occur after the date hereof (the"Specified Defaults"), the Lender agrees to forbear from exercising its right to accelerate the maturity of the Obligations or to cease making Revolving Credit Loans as a result of the occurrence of such Events of Default listed on Schedule 1 attached hereto until the earliest of (i) the date ninety (90) days from the date as of which this Amendment is being executed, (ii) the date that any other Default or Event of Default (including, without limitation, an Event of Default under and as defined in the Subordinated Debt Agreements) shall occur and (iii) the termination of the Vineland Purchase and Sale Agreement or the occurrence of some other event (x) as a result of which the conditions to consummating the Vineland Sale can not be satisfied on or before ninety (90) days from the date as of which this Amendment is being executed or (y) which results in the Vineland Sale not being consummated on or before ninety (90) days from the date as of which this Amendment is being executed (the earliest of the dates set forth in clauses (i), (ii) and (iii) referred to herein as the "Forbearance Termination Date). The Borrowers acknowledge and agree that any Event of Default under and as defined in the Subordinated Debt Agreements that has not been expressly waived by American Capital pursuant to Section 4.3 of Amendment No. 2 to Note and Equity Purchase Agreement dated of even date herewith shall constitute an Event of Default under and as defined in the Loan Agreement. On and after the Forbearance Termination Date, the Lender shall be free in its sole and absolute discretion to proceed to enforce any or all of its rights, and to exercise any or all of its remedies under or in respect of the Loan Agreement, the Notes or the other Loans Documents and applicable law. The Borrowers will continue to be required to be in compliance with those covenants listed on Schedule 1 attached hereto at all times after such forbearance under this paragraph ends.

      Section 6.    Condition Precedent. The effectiveness of the amendments contained herein shall be subject to the prior satisfaction, on or before the date hereof, of the following conditions precedent.

       Section 7.    Representations and Warranties. The Borrowers hereby represent and warrant to the Lender that all of the representations and warranties made by the Borrowers in the Loan Agreement and the other Loan Documents are true and correct on the date hereof as if made on and as of the date hereof, except to the extent that any of such representations and warranties expressly relate by their terms to a prior date.

       Section 8.    Ratification of Existing Agreements. Each of the Borrowers hereby acknowledges and agrees that nothing set forth herein shall alter or affect the validity or effectiveness of any of the Obligations. All of the Obligations as evidenced by or otherwise arising under the Loan Agreement and the other Loan Documents, are, by each Borrowers execution of this Amendment, ratified and confirmed in all respects. In addition, by their execution of this Amendment, each of the Borrowers represents, warrants and agrees that no counterclaim, right of set-off, right of recoupment or defense of any kind exists or as outstanding with respect to the Obligation. As of June 16, 2000, the aggregate principal amount of the Revolving Credit Loans outstanding is $7,281,864.89; the principal amount of the Term Loan A outstanding is $6,650,000; the principal amount of the Term Loan B outstanding is $350,000; and the aggregate principal amount of the Capital Expenditure Loans outstanding is $257,265.71.

      Section 9.    Release. The Borrowers, on their own behalf and on behalf of their shareholders, employees and agents and their successors and assigns, hereby waive, release and discharge the Lender and all affiliates of the Lender, and all of their directors, officers, employees, attorneys and agents, from any and all claims, demands, actions or causes of action whether known or unknown, arising out of or in any way relating to this Amendment, the Loan Agreement, the Loan Documents and/or any documents, agreements, dealings or other matters connected with the Loan Agreement, the Loan Documents or the administration thereof.

      Section 10.    Expenses. The Borrowers agree to pay to the Lender (a) on the date hereof Lender's legal fees and disbursements incurred through the date hereof in connection with the negotiation and preparation of this Amendment and related matters, (b) on the date hereof Lender's examiner fees and disbursements incurred through the date hereof, and (c) upon demand from time to time any and all reasonable out-of-pocket costs or expenses (including commercial examiner fees and reasonable legal fees and disbursements) hereafter incurred by the Lender in connection with the administration of credit extended by the Lender to the Borrowers or the preservation of or enforcement of its rights under the Loan Agreement, the Notes and the other Loan Documents or in respect of any of the Borrowers' other obligations to the Lender.

      Section 11.    Miscellaneous Provisions.

       IN WITNESS WHEREOF, each of the parties hereto have caused, this Amendment to be executed in its name and behalf by its duly authorized officer as of the date first written above.