Exhibit 99.3 [FORM OF AMERICAN CAPITAL LETTERHEAD] Mr. Robert McDaniel Chief Executive Officer IGI, Inc. 848 Webster Highway Temple, NH 03084 Dear Mr. McDaniel, Under the terms of section 7.1(i)(i) the Note and Equity Purchase Agreement dated October...

                                                                   Exhibit 99.3

                    [FORM OF AMERICAN CAPITAL LETTERHEAD]

Mr. Xxxxxx XxXxxxxx
Chief Executive Officer
IGI, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000

Dear Xx. XxXxxxxx,

      Under the terms of section 7.1(i)(i) the Note and Equity Purchase
Agreement dated October 24, 1999, between IGI, Inc. ("IGI") and American
Capital Strategies, Ltd. ("ACAS"), ACAS has the right to nominate one
member to the IGI board of directors. Accordingly, ACAS hereby nominates
Xxxx X. Xxxxx as its representative on the IGI board of directors.

      Please take all necessary steps to seat Xx. Xxxxx as a member of the
board as soon as possible. All compensation payable to IGI board members
should be paid directly to ACAS directly on the same terms as paid to
current IGI board members.

      Thank you for your prompt attention to this matter.


                                       Sincerely,

                                       /s/ Xxxx Xxxxxxxxxx

                                       Xxxx Xxxxxxxxxx
                                       President

cc:   Xxxxxx Xxxx
      Xxxx Xxxxx