-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KAh556+TOMoi0CqbIMIlmgc45env6YjQHIF7gZ0lZBO/d8TFEXWHd3z61oFZxMep 19gcYmj5RO48sOEPTtRlWA== 0001104659-08-034005.txt : 20080516 0001104659-08-034005.hdr.sgml : 20080516 20080516144159 ACCESSION NUMBER: 0001104659-08-034005 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20080516 DATE AS OF CHANGE: 20080516 GROUP MEMBERS: DAVID FARBER GROUP MEMBERS: JEFFREY FARBER SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LANNETT CO INC CENTRAL INDEX KEY: 0000057725 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 230787699 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-34227 FILM NUMBER: 08841792 BUSINESS ADDRESS: STREET 1: 9000 STATE RD CITY: PHILADELPHIA STATE: PA ZIP: 19136 BUSINESS PHONE: 2153339000 MAIL ADDRESS: STREET 1: 9000 STATE ROAD STREET 2: 9000 STATE ROAD CITY: PHLADELPHIA STATE: PA ZIP: 19136 FORMER COMPANY: FORMER CONFORMED NAME: NETHERLANDS SECURITIES INC DATE OF NAME CHANGE: 19660629 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Farber Properties Group, LLC CENTRAL INDEX KEY: 0001431295 IRS NUMBER: 200383294 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1775 JOHN R CITY: TROY STATE: MI ZIP: 48083 BUSINESS PHONE: 313-387-1600 MAIL ADDRESS: STREET 1: 1775 JOHN R CITY: TROY STATE: MI ZIP: 48083 SC 13D 1 a08-11798_2sc13d.htm SC 13D

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

Lannett Company, Inc.

(Name of Issuer)

Common Stock, $0.001 par value per share

(Title of Class of Securities)

51601201

(CUSIP Number)

Farber Properties Group, LLC

1775 John R Road

Troy, Michigan 48083

Attention: David Farber

(313) 387-1600

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

May 7, 2008

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 51601201

	1.	Names of Reporting Persons Farber Properties Group, LLC 20-0383294

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) PF 00

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Michigan

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 5,000,000

			9.	Sole Dispositive Power 0

			10.	Shared Dispositive Power 5,000,000

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 5,000,000 (See Item 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 20.60%

	14.	Type of Reporting Person (See Instructions) 00

CUSIP No. 51601201

	1.	Names of Reporting Persons David Farber

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) PF OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization U.S.

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 23,358

			8.	Shared Voting Power 5,127,850

			9.	Sole Dispositive Power 23,358

			10.	Shared Dispositive Power 5,127,850

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 5,151,208 (See Item 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 21.22%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 51601201

	1.	Names of Reporting Persons Jeffrey Farber

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) PF OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization U.S.

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 147,120

			8.	Shared Voting Power 5,000,000

			9.	Sole Dispositive Power 147,120

			10.	Shared Dispositive Power 5,000,000

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 5,147,120 (See Item 5)

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 21.20%

	14.	Type of Reporting Person (See Instructions) IN

Item 1.	Security and Issuer
The class of equity security to which this statement relates is the common stock, $.001 par value per share (the "Common Stock"), of Lannett Company, Inc., a Delaware corporation (the "Company"). The address of the principal executive offices of the Company is 9000 State Road, Philadelphia, PA 19136

Item 2.	Identity and Background
This statement is being jointly filed by each of the following persons pursuant to Rule 13d-1(k) promulgated by the Securities and Exchange Commission pursuant to Section 13 of the Securities Exchange Act of 1934, as amended.

Farber Properties Group, LLC is a Michigan limited liability company and its principal business is to hold investments, including the shares of the Company described herein. Its principal office is located at 1775 John R Road, Troy, MI 48083.

David Farber is an individual and a United States citizen, and his principal occupation is owning and operating a food service business in the Detroit Metropolitan Area as well as managing private investments. David Farber owns 50% of the issued and outstanding membership interests of Farber Properties Group, LLC. The balance of the membership interests are owned by his brother Jeffrey Farber, a director of the Company. David Farber’s business address is 14950 Telegraph Road, Redford Township, MI 48239. Jeffrey Farber is an individual and a United States citizen, and his principal occupation is owning and operating a wholesale distributor of generic drugs located in the Detroit Metropolitan Area, which is not affiliated with the Company. In addition, Jeffrey Farber manages private investments. Jeffrey Farber is also a director of the Company. Jeffrey Farber owns 50% of the issued and outstanding membership interests of Farber Properties Group, LLC. The balance of the membership interests are owned by his brother David Farber. Jaffrey Farber’s business address is 1755 John R Road, Troy, MI 48083.

None of the foregoing entities or individuals have, during the past five years: (i) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction for which he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws, or (ii) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

Item 3.	Source and Amount of Funds or Other Consideration
The shares of the Company described herein have been purchased by Farber Properties Group, LLC from William Farber, a director of the Company and the father of David Farber and Jeffrey Farber. The shares were paid by means of a promissory note. Pursuant to the terms of the Stock Purchase Agreement, the promissory note is secured by a Stock Pledge Agreement covering the shares of the Company described herein.

Item 4.	Purpose of Transaction
The shares described herein were acquired for investment purposes only. William Farber entered into the transaction to sell the shares described herein to Farber Properties Group, LLC as part of his overall estate plan. The shares of the Common Stock were acquired by Farber Properties Group, LLC for investment purposes only. There are no agreements as to the voting of the stock or disposition of the stock other than the Stock Pledge Agreement described in Item 3 above.

Item 5.	Interest in Securities of the Issuer
(a) This filing relates to 5,000,000 shares of Common Stock of the Company held by Farber Properties Group, LLC representing 20.6% of the issued and outstanding shares of the Common Stock of the Company. As a 50% owner of Farber Properties Group, LLC, David Farber may be deemed the beneficial holder of the 2,500,000 shares of Common Stock held by Farber Properties Group, LLC. Jeffrey Farber, brother of David Farber, and a director of the Company, holds 50% of the issued and outstanding membership interests in Farber Properties Group, LLC and may be deemed a beneficial owner of 2,500,000 shares of Common Stock held by Farber Properties Group, LLC. David Farber, alone or with immediate family members, own 151,208 shares of issued and outstanding shares of the Common Stock of the Company. Of this amount, 125,000 shares are owned by David Farber and his wife; 7,488 are held by David Farber as custodian for his children; 15,870 are held by David Farber’s individual retirement account; and 2,850 are held in the individual retirement account of David Farber’s wife. Neither Jeffrey Farber nor Farber Properties Group, LLC have the power to vote or dispose of the shares held by David Farber and his immediate family and each disclaims beneficial ownership of such shares. Jeffrey Farber in his individual capacity, owns 147,120 shares of the issued and outstanding shares of the Common Stock of the Company. Neither David Farber nor Farber Properties Group, LLC have the power to vote or dispose of the shares held individually by Jeffrey Farber and each disclaims beneficial ownership of such shares. (b) David Farber and Jeffrey Farber in their capacity as members of Farber Properties Group, LLC may each be deemed to have the shared power to vote or dispose of the shares of Common Stock held by Farber Properties Group, LLC.
(c) See Item 3.
(d) No other person has the right to receive or the power to direct the receipt of dividends from or the proceeds of the sale of the shares which are the subject of this filing.
(e) Not applicable

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
As indicated under Item 3, Farber Properties Group, LLC acquired the shares which are the subject of this filing from William Farber by means of a promissory note secured by a Stock Pledge Agreement covering such shares. In the event of a default by Farber Properties Group, LLC under the promissory note, William Farber as secured party, has the right to take title to the shares and vote such shares or otherwise sell or dispose of the shares.

Item 7.	Material to be Filed as Exhibits

Exhibit

99.1 Stock Purchase Agreement
99.2 Non-Recourse Promissory Note
99.3 Stock Pledge and Security Agreement
99.4 Joint Filing Agreement

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	May 16, 2008
	(Date)

	FARBER PROPERTIES GROUP, LLC

	By:	/s/ David Farber
		(Signature)

	David Farber, Manager
	(Name and Title)

	May 16, 2008
	(Date)

	/s/ David Farber
	Signature

	David Farber
	(Name and Title)


	May 16, 2008
	(Date)

	/s/ Jeffrey Farber
	Signature

	Jeffrey Farber
	(Name and Title)

EX-99.1 2 a08-11798_2ex99d1.htm EX-99.1

EXHIBIT 99.1

Stock Purchase Agreement

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) is made and entered into on or as of May 7, 2008 (the “Date of this Agreement”), by and between Farber Properties Group, LLC, a Michigan limited liability company (the “Purchaser”), whose address is 1775 John R, Troy, Michigan 48083, and William Farber (the “Selling Shareholder”), whose address is 32640 Whatley, Franklin, Michigan 48025. The Purchaser and Selling Shareholder are collectively referred to as the “Parties”, and each is a “Party”.

INTRODUCTION

(1) The Selling Shareholder is the record and beneficial owner of more than five million (5,000,000) shares of capital stock (the “Stock”) of Lannett Company, Inc., a Delaware corporation (the “Target Company”). The Stock is publicly traded on the American Stock Exchange (the “Exchange”) under the symbol LCI.

(2) Selling Shareholder wishes to sell exactly five million (5,000,000) shares of the Stock (the “Target Stock”) to Purchaser, and Purchaser desires to purchase the Target Stock from the Selling Shareholder, in accordance with the terms and conditions of this Agreement.

Therefore, the Parties agree as follows:

AGREEMENT

PART 1

SALE AND PURCHASE OF TARGET STOCK

1.1 Sale and Purchase of Target Stock. On the Date of this Agreement, the Selling Shareholder does hereby sell, assign and transfer to the Purchaser the Target Stock, free and clear of any and all pledges, security interests, collateral assignments, community property interests, rights of first refusal, options, warrants, puts, calls, and/or other such encumbrances (the “Encumbrances”), and the Purchaser does hereby purchase the Target Stock from the Selling Shareholder. The sale and purchase of the Target Stock under this Agreement is sometimes referred to as the “Purchase Transaction”. If the Selling Shareholder receives any dividends or other distributions from the Target Company, whether in cash, securities or other property, with a record date on or after the Date of this Agreement, on account of the Target Stock (the “Post Closing Dividends”), the Selling Shareholder shall be deemed to be holding the Post Closing Dividends in trust for the benefit of the Purchaser, shall not commingle the Post Closing Dividends with the Selling Shareholder’s accounts or other assets, and shall immediately remit the Post Closing Dividends to the Purchaser.

1.2 Purchase Price

1.2.1 Determination of Purchase Price. For and in consideration of the sale and purchase of the Target Stock, Purchaser shall pay to the Selling Shareholder the total amount of eleven million three hundred ten thousand dollars ($11,310,000.00) (the “Purchase Price”), calculated by applying a 35% blockage and non-marketability discount multiplied by the average of the high and low price of the Stock on the Exchange on the trading day coinciding with the Date of this Agreement (i.e., $3.48) multiplied by five million (5,000,000) shares of Target Stock.

1.2.2 Payment of Purchase Price. The Purchaser shall pay the Purchase Price to the Selling Shareholder in accordance with the terms and conditions of a Non-Recourse Promissory Note in the form attached to this Agreement as Exhibit A (the “Note”), which shall provide for the terms and conditions set forth below in this Section 1.2.2. The Purchaser agrees to execute and deliver the Note to the Selling Shareholder on the Date of this Agreement.

(A) The entire principal balance and all accrued but unpaid interest will be due and payable in full in a single, lump sum balloon payment on the nine (9) year anniversary of the Date of this Agreement (the “Maturity Date”).

(B) Prior to the Maturity Date, interest will accrue at the mid-term applicable federal rate fixed as of May 2008, compounding annually, as published in United States Department of Treasury Revenue Ruling 2008-20, which is 2.74%.

(C) The Purchaser’s obligation for payment of the Note shall be without recourse, other than the Selling Shareholder’s recourse to the “Collateral” pledged under and pursuant to the Pledge Agreement referenced in Section 1.2.3 below.

1.2.3 Security for Payment of Purchase Price. Payment of the Note will be secured by a Stock Pledge and Security Agreement in the form attached to this Agreement as Exhibit B (the “Pledge Agreement”). The Purchaser agrees to execute and deliver the Pledge Agreement to the Selling Shareholder on the Date of this Agreement.

1.3 Compliance with Securities Laws. The Parties agree to comply with all requirements of the Securities Act of 1933 (as amended, the “1933 Act”), and the applicable securities laws of the State of Michigan, the State of Delaware, the Commonwealth of Pennsylvania and each other competent jurisdiction, (collectively the “Securities Laws”), including, without limitation, the filing of all notice and registration requirements of the Securities Laws, and to generally cooperate with each other with respect to such compliance.

1.4 Conveyance of Target Stock. On the Date of this Agreement, the Selling Shareholder shall sign, execute and deliver an Assignment of Stock (Separate from Certificate), in form reasonably satisfactory to Purchaser and each transfer agent for the Target Company (the “Target Stock Assignment”), sufficient and effective so as to assign and transfer the Target Stock from the Selling Shareholder to the Purchaser free and clear of all Encumbrances.

PART 2

REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDER

The Selling Shareholder represents and warrants to the Purchaser that all of the statements, representations and warranties made or given below in this Part 2 are true and correct, knowing and intending that the Purchaser will rely thereon:

2.1 Competence and Authority. Selling Shareholder is legally competent and has the power and authority to enter into and perform the Selling Shareholder’s obligations under this Agreement, and to consummate the Purchase Transaction.

2.2 Enforcement. This Agreement is a valid and binding obligation of the Selling Shareholder, enforceable against the Selling Shareholder in accordance with the terms and conditions hereof.

2.3 Beneficial and Record Ownership of Target Stock. The Selling Shareholder is the sole beneficial and record owner of the Target Stock, free and clear of all Encumbrances. Except for this Agreement, no one has asserted or made a claim to any rights, title or interest in the Selling Shareholder’s Target Stock, and Selling Shareholder is not a party to or bound by any oral or written contract, agreement or commitment (a “Contract”) to grant or issue, and Selling Shareholder has not granted or issued, any options, calls or other rights to purchase, acquire, vote or control the Target Stock.

2.4 No Violation. The execution, delivery and performance of this Agreement by the Selling Shareholder and the consummation of the Purchase Transaction by the Selling Shareholder will not violate any law, regulation, judgment, consent decree, court order or Contract to which Selling Shareholder is a party or by which Selling Shareholder is bound.

2.5 Litigation. There is no legal, administrative, arbitration or other proceeding, lawsuit or governmental investigation (collectively, “Litigation”) pending and, to the best knowledge of the Selling Shareholder, there is no Litigation threatened which in either such case involves the Purchase Transaction and/or otherwise affects the power, authority or ability of the Selling Shareholder to sell, assign and convey the Target Stock to Purchaser free and clear of Encumbrances in accordance with the terms and conditions of this Agreement.

2.6 Judgments. The Selling Shareholder is not subject to any outstanding order, judgment, ruling, or declaration of any court, arbitration or alternative dispute resolution moderator, adjudicator, panel, or tribunal which would be violated by the execution, delivery and performance of this Agreement and/or consummation of the Purchase Transaction.

2.7 Consents. The execution, delivery, and performance of the Selling Shareholder’s obligations under this Agreement, and the consummation of the Purchase Transaction, will not require approval, consent, waiver, discharge, release, permit, license or other authority from any individual, trust, corporation, limited liability company, partnership, sole proprietorship, joint venture, business division, business trust, estate, unincorporated association, or other entity, whether or not a legal entity, or any government or representative, department, authority or agency of or exercising the authority of government, including, without limitation, the Securities Exchange Commission.

PART 3

REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER

Purchaser represents and warrants to the Selling Shareholder, and agrees, as follows:

3.1 Competence and Authority. The Purchaser is a limited liability company, organized, validly existing and in good standing under the laws of the State of Michigan. Purchaser has the power and authority to enter into and perform its obligations under this Agreement, and to consummate the Purchase Transaction.

3.2 Enforcement. This Agreement is a valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with the terms and conditions hereof.

3.3 No Violation. The execution, delivery and performance of this Agreement by the Purchaser and the consummation of the Purchase Transaction by the Purchaser will not violate any law, regulation, judgment, consent decree, court order or Contract to which the Purchaser is a party or by which the Purchaser is bound.

3.4 No Litigation. There is no Litigation pending and, to the best knowledge of the Purchaser, there is no Litigation threatened which in either such case involves the Purchase Transaction and/or otherwise affects the power, authority or ability of the Purchaser to purchase the Target Stock from the Selling Shareholder in accordance with the terms and conditions of this Agreement.

3.5 Judgments. Purchaser is not subject to any outstanding order, judgment, ruling, or declaration of any court, arbitration or alternative dispute resolution moderator, adjudicator, panel, or tribunal which would be violated by the execution, delivery and performance of this Agreement and/or consummation of the Purchase Transaction.

PART 4

GENERAL TERMS AND CONDITIONS

4.1 Amendment. This Agreement may not be modified or amended orally or by contrary course of conduct, and may only be modified or amended in writing signed by all of the Parties to this Agreement.

4.2 Entire Agreement. This Agreement constitutes the entire agreement between the Parties in connection with the subject matter of this Agreement, and supersedes any and all other agreements, either oral or written, between the Parties with respect to the subject matter of this Agreement.

4.3 Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

4.4 No Third Party Beneficiaries. This Agreement will not be enforceable against the Parties by any third parties, and this Agreement will not otherwise inure to the benefit of any third parties.

4.5 Choice of Law. This Agreement shall be governed by, construed, interpreted, and enforced in accordance with the internal laws of the State of Michigan, notwithstanding the choice of law or conflicts of law provisions of the State of Michigan or any other jurisdiction.

4.6 Venue for Resolution of Disputes. The Parties stipulate and agree to the exclusive jurisdiction of the Oakland County, Michigan Circuit Court for the resolution of all disputes and controversies arising out of or based on this Agreement and the Purchase Transaction, and the Parties forever waive all immunities or defenses to the jurisdiction of such court.

4.7 WAIVER OF TRIAL BY JURY. EACH PARTY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY DISPUTE, CLAIM, ACTION, SUIT OR LITIGATION BASED ON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE BROAD, ENCOMPASSING ALL DISPUTES INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS OR DEFENSES. EACH PARTY

ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE OTHER TO ENTER INTO THIS AGREEMENT. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENT, RENEWAL, MODIFICATION OR SUPPLEMENT TO THIS AGREEMENT. EACH PARTY UNDERSTANDS THAT THIS WAIVER IS A WAIVER OF RIGHTS WHICH MAY BUT FOR THIS WAIVER BE PROTECTED BY APPLICABLE LAW.

4.8 Construction

4.8.1 Years, Months, Days. References to a years, months and days refer to calendar years, months and days, unless expressly indicated to the contrary.

4.8.2 Nouns and Pronouns. Nouns and pronouns will be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or persons, firm or Target Company may in the context require.

4.8.3 Descriptive Headings. The headings to the sections and subsections of this Agreement are inserted for reference only and are not to be either taken as limiting or extending the provisions of this Agreement, or given any effect on the construction or interpretation of this Agreement.

4.8.4 Vague Terms. Each Party to this Agreement participated in the drafting, preparation and negotiation of this Agreement. Therefore, no one Party to this Agreement is or should be considered to be the drafter of this Agreement, and any rule of construction which favors or gives the benefit of any doubt, uncertainty or ambiguity over the interpretation of this Agreement to one Party over the other shall not be applicable, even if one party physically reduced this Agreement to writing

4.8.5 Include or Including. Whenever the words “include”, “includes” and “including” are used in this Agreement, such words shall be deemed to be followed by the words “without limitation”.

4.8.6 Dollars. All references to dollars or Dollars shall refer to legal tender and currency of the United States.

4.8.7 Introduction. The Introduction Paragraphs of this Agreement, as set forth on Page 1, are incorporated within and made a part of this Section 4.8.7 by reference.

4.9 Signatures

4.9.1 Counterparts. This Agreement may be executed in separate counterparts, none of which need contain the signatures of all Parties, each of which shall be deemed to be an original, and all of which taken together shall constitute one and the same instrument.

4.9.2 Electronic Copies. This Agreement may be transmitted by facsimile, email as an attached image file or other electronic means, in which case each facsimile, image file or other electronic copy will be effective as if an original.

4.10 Severability. If any one or more provisions of this Agreement are adjudged or declared invalid or unenforceable by a court of competent jurisdiction, the validity or enforceability of any of the other provisions of this Agreement will not be affected.

SIGNATURES ON THE FOLLOWING PAGE

SIGNATURE PAGE TO

STOCK PURCHASE AGREEMENT

In the presence of the witness whose signature appears below, each Party to this Agreement has caused this Agreement to be duly executed on the Date of this Agreement.

WITNESS	SELLING SHAREHOLDER


/s/ Sherri Brown	/s/ William Farber
	William Farber


WITNESS	PURCHASER

	Farber Properties Group, LLC


/s/ Sherri Brown	By	/s/ David Farber
		David Farber, Its: Manager


/s/ Sherri Brown	And By			/s/ Jeffrey Farber
			Jeffrey Farber, Its: Manager

EX-99.2 3 a08-11798_2ex99d2.htm EX-99.2

EXHIBIT 99.2

Non-Recourse Promissory Note

NON-RECOURSE

PROMISSORY NOTE

PRINCIPAL AMOUNT	$11,310,000.00

NOTE DATE	May 7, 2008

MATURITY DATE		May 7, 2017

For value received, Farber Properties Group, LLC, a Michigan limited liability company (the “Debtor”), whose address is 1775 John R, Troy, Michigan 48083, promises to pay to William Farber (the “Creditor”), whose address is 32640 Whatley, Franklin, Michigan 48025, in lawful currency of the United States of America, the principal sum of eleven million three hundred ten thousand dollars ($11,310,000.00), or so much of such sum as is outstanding (the “Debt”) under this Non-Recourse Promissory Note (this “Note”), as follows:

1. Interest will accrue on the principal balance of the Debt at the mid-term applicable federal rate fixed as of May 2008, compounding annually, as published in United States Department of Treasury Revenue Ruling 2008-20 (the “Index Rate”), which is 2.74%. The interest rate accruing under this Note at the Index Rate is referred to as the “Interest Rate”.

2. The entire Debt, including the outstanding principal balance and all accrued but unpaid interest, will be due and payable in full in a single, lump sum balloon payment on May 7, 2017 (the “Maturity Date”), which is the nine (9) year anniversary of the Note Date.

3. The Debtor may prepay the Debt at any time, in whole or in part, without penalty or premium.

4. Debtor waives presentment for payment, demand, notice of demand, protest, notice of protest, notice of default for nonpayment, notice of acceleration or intent to accelerate, and all other notices. Debtor waives diligence in collection or bringing suit.

5. This Note and the exercise of all rights and remedies under this Note shall be governed by, construed, interpreted, and enforced in accordance with the internal laws of the state of Michigan.

6. Payment of this Note is secured by a Stock Pledge and Security Agreement, dated as of the Note Date, from Debtor to and for the benefit of Creditor (the “Pledge Agreement”). The term “Collateral” shall have the meaning given to it in the Pledge Agreement. Notwithstanding anything in this Note to the contrary or otherwise, in the event of any breach or default of this Note by Debtor, the obligation of the Debtor to the Creditor shall be limited in recourse to the Collateral pledged under the Pledge Agreement, and the Creditor shall have no right to enforce any judgment or claim against Debtor on account of the Debt against or by levy or attachment upon any assets or properties of the Debtor other than the Collateral pledged under the Pledge Agreement.

SIGNATURE OF DEBTOR

WITNESS	Farber Properties Group, LLC


/s/ Jill Farber	By	/s/ David Farber
		David Farber, Its: Manager

/s/ Jennifer Farber	And By		/s/ Jeffrey Farber
			Jeffrey Farber, Its: Manager

EX-99.3 4 a08-11798_2ex99d3.htm EX-99.3

EXHIBIT 99.3

Stock Pledge and Security Agreement

STOCK PLEDGE AND SECURITY AGREEMENT

This Stock Pledge and Security Agreement (this “Agreement”) is made on or as of May 7, 2008 (the “Date of this Agreement”), by Farber Properties Group, LLC, a Michigan limited liability company (the “Debtor”), whose address is 1775 John R, Troy, Michigan 48083, to and for the benefit of William Farber (the “Creditor”), whose address is 32640 Whatley, Franklin, Michigan 48025.

INTRODUCTION

A. Debtor is indebted to Creditor in the amount of eleven million three hundred ten thousand dollars ($11,310,000.00) (the “Loan”). The Loan is evidenced by a Non-Recourse Promissory Note dated as of the Date of this Agreement (the “Note”). The Note and this Agreement are sometimes collectively referred to as the “Loan Documents”, and each is a “Loan Document”.

B. In order to induce Creditor to continue to extend credit to Debtor in the form of the Loan as evidenced by the Note, Debtor desires to enter into this Agreement.

Therefore, Debtor agrees as follows:

1. Indebtedness. This Agreement is made to secure payment when due, whether by stated maturity, demand, acceleration or otherwise, of all existing and future indebtedness of Debtor to Creditor under the Note (the “Indebtedness”). Indebtedness includes without limitation any and all obligations or liabilities of the Debtor to the Creditor, whether absolute or contingent, direct or indirect, voluntary or involuntary, liquidated or unliquidated, joint or several, known or unknown; any and all obligations or liabilities for which the Debtor would otherwise be liable to the Creditor were it not for the invalidity or unenforceability of them by reason of any bankruptcy, insolvency or other law, or for any other reason; any and all amendments, modifications, renewals and/or extension of any of the above; all costs incurred by Creditor in establishing, determining, continuing, or defending the validity or priority of its security interest, or in pursuing its rights and remedies under this Agreement or under any other Loan Document or in connection with any proceeding involving Creditor as a result of any financial accommodation to Debtor; and all other costs of collecting the Indebtedness, including, without limitation, attorney fees. Debtor agrees to pay Creditor all such costs incurred by the Creditor, immediately upon demand, and until paid all costs shall bear interest at the highest per annum rate applicable to any of the Indebtedness, but not in excess of the maximum rate permitted by law. Any reference in this Agreement to attorney fees shall be deemed a reference to fees, costs, and expenses of both in-house and outside counsel and paralegals, whether or not a suit or action is instituted, and to court costs if a suit or action is instituted, and whether attorney fees or court costs are incurred at the trial court level, on appeal, in a bankruptcy, administrative or probate proceeding or otherwise.

2. Reaffirmation of Loan. Debtor hereby reaffirms its obligation for the prompt, full and punctual payment and performance of the Note and all other obligations of the Debtor under the Note and other Loan Documents.

3. Collateral. Debtor represents to the Creditor that Debtor is the sole record and beneficial owner of five million (5,000,000) shares of the authorized, issued and outstanding capital stock (the “Target Stock”) of Lannett Company, Inc., a Delaware corporation (the “Target Company”).

The term “Collateral” means and refers to all of the following:

(I) the Target Stock,

(II) all securities which Debtor receives, is or becomes entitled to receive, or to which Debtor has a claim or interest by reason of any reorganization, recapitalization, equity split, equity dividend, conversion, merger, consolidation, exercise of preemptive rights or otherwise, in exchange for or by reason of the Target Stock,

(III) all proceeds of the Target Stock, and

(IV) all replacements, substitutions and additions to the Target Stock or any of the foregoing,

and, as to all of the foregoing, whether now or later owned or received by, issued or belonging to, or otherwise inuring to the benefit of Debtor.

Notwithstanding the foregoing, or anything else in this Agreement to the contrary, the Collateral shall not include (and shall expressly exclude) all shares of capital stock now or later owned by the Debtor, and/or the members, managers, officers, successors or assigns of Debtor, other than the Target Stock.

4. Pledge and Grant of Security Interest in Collateral

4.1 Debtor hereby pledges and grants to Creditor a continuing security interest in and to the Collateral in order to secure the full and timely payment and performance to the Creditor of the Indebtedness and all other obligations of the Debtor to Creditor as and when due.

4.2 On the Date of this Agreement, Debtor hereby delivers and deposits with the Creditor, to have and to hold for purposes of putting into effect and/or perfecting the security interest granted hereunder and for all other purposes of this Agreement, a Collateral Assignment of Target Stock duly signed by Debtor to Creditor in the form of Exhibit A to this Agreement (the “Target Stock Assignment”).

4.3 If Debtor shall hereafter have beneficial or record title or rights in or to any additional securities of the Target Company, or any other limited liability company, partnership, corporation or legal entity by reason of Debtor’s ownership of the Target Stock, whether issued pursuant to a corporate reorganization, recapitalization, equity split, equity dividend, conversion, merger, or consolidation, the Debtor shall immediately cause each certificate or other instrument evidencing the Debtor’s rights in and to such securities to be delivered to Creditor to have and to hold for purposes of perfecting the security interest granted hereunder and for all other purposes of this Agreement, together with a collateral assignment or assignment separate from certificate or instrument substantially in the form of the Target Stock Assignment attached as Exhibit A to this Agreement or such other form as Creditor shall require. Debtor agrees that such additional securities shall be a part of the Collateral and subject to this Agreement as if originally pledged to Creditor upon the execution of this Agreement and shall be included within the definition of the Target Stock. Debtor further agrees to sign, execute, and deliver any and all other documents, agreements, and instruments, and to do any and all other things,

requested by Creditor from time to time for the purpose of securing and perfecting the rights of Creditor in and to the Collateral.

5. Representations, Warranties and Covenants of Debtor. Debtor represents and warrants to Creditor, and agrees, as follows:

(A) there is not now any, and so long as the Collateral is pledged to Creditor there will be no, outstanding rights, subscriptions, options, convertible debentures, warrants, calls, contracts, commitments, voting agreements, voting trusts, proxies, or demands of any kind or nature, relating to the Collateral, other than this Agreement (or otherwise in favor of Creditor);

(B) Debtor is authorized and empowered to enter into this Agreement, and to pledge the Collateral to Creditor in accordance with the terms and conditions of this Agreement;

(C) Debtor will be bound by the obligations of this Agreement and this Agreement is enforceable against Debtor in accordance with its terms;

(D) the Collateral is and will at all times remain free and clear of all liens, security interests, pledges and encumbrances, other than the rights of the Creditor created by this Agreement;

(E) the Creditor’s security interest in the Collateral is first and senior to any and all other security interests in, or pledges of, the Collateral;

(F) Debtor will defend the Creditor’s interest in the Collateral against the claim and demand of all other persons; and

(G) Debtor will not sell, assign, transfer, pledge, gift, or otherwise dispose of, or encumber, any Collateral while this Agreement is in effect without the prior written consent of Creditor, which consent may be withheld or given in Creditor’s sole discretion.

6. Voting Rights. Debtor shall have the sole and exclusive right and authority to vote the Collateral, except, effective from and after the occurrence of an Event of Default only, Debtor irrevocably constitutes and appoints the Creditor as the Debtor’s true and lawful attorney-in-fact, with power of substitution, for Debtor and in Debtor’s name, place, and stead, to vote the Collateral as the Debtor’s proxy, whether at an annual, special or regular meeting (or an adjournment of such a meeting) or by written consent (without a meeting) of the shareholders of the Target Company, in any manner which the Creditor shall determine in its unrestricted discretion. This proxy will inure to the benefit of the Creditor and its successors and assigns in interest. This proxy shall not terminate by reason of the death or disability of the Debtor, but shall terminate upon the termination of this Agreement as and when the Indebtedness and all other obligations of Debtor to Creditor have been indefeasibly paid in full without right of reinstatement, disgorgement or repayment by reason of a preference, other creditor action or by operation of law.

7. Distributions. Debtor shall have the right and power to take exclusive receipt and otherwise have possession or control of, and shall have the exclusive claim to, any dividends or distributions, whether in cash or other property, on account of the Target Stock (the “Distributions”), except, from

and after an Event of Default, Debtor shall immediately deliver, remit and turn over to Creditor all such Distributions received by or in the possession or control of Debtor, without commingling such Distributions with the Debtor’s other properties and assets. From and after an Event of Default, Debtor shall be deemed to hold such Distributions in trust for the exclusive benefit of Creditor.

8. Events of Default. The occurrence of any or more of the following events shall be a default of this Agreement (each an “Event of Default”):

(a) Any failure of Debtor to pay the Indebtedness as and when due, or such portion of it as may be due, whether on any installment due date, at maturity, by acceleration, upon demand or otherwise, which failure continues without cure for a period of sixty (60) days following written notice from Creditor to Debtor.

(b) Any failure or neglect to comply with, or any breach of or default under, any terms or conditions of this Agreement or any other Loan Document, which failure continues without cure for a period of sixty (60) days following written notice from Creditor to Debtor.

(c) The issuance of an order from a court of competent jurisdiction of any transfer, disposition, attachment, levy or garnishment of or upon the Collateral, which order is not stayed or lifted prior to the first to occur of execution or the elapse of ninety (90) days.

(d) The sale, transfer or other disposition by Debtor of all or any part of the Collateral.

(e) The termination of existence or dissolution (without reinstatement) of Debtor.

(f) Any voluntary assignment for the benefit of creditors of Debtor, commencement of any proceedings under any state or federal bankruptcy or insolvency laws or laws for the relief of debtors by or against Debtor, or appointment of a receiver, trustee, court appointee, custodian or otherwise, for all or any part of the property of Debtor.

(g) Any involuntary assignment for the benefit of creditors of Debtor, commencement of any proceedings under any state or federal bankruptcy or insolvency laws or laws for the relief of debtors by or against Debtor, or appointment of a receiver, trustee, court appointee, custodian or otherwise, for all or any part of the property of Debtor, to the extent that the same is not stayed or lifted prior to the first to occur of execution or the elapse of ninety (90) days.

9. Cumulative Remedies Upon Occurrence Of Event Of Default. Upon the occurrence of any Event of Default, Creditor will have each and all of the remedies set forth below, exercisable if the Event of Default is not cured within sixty (60) days following written notice from Creditor to Debtor. Each and all of these remedies will be cumulative, such that Creditor may exercise one or more or all of such remedies until the Indebtedness is indefeasibly paid in full without right of reinstatement, disgorgement or repayment by reason of a preference, other creditor action or by operation of law:

(I) Creditor may cause all or any portion of the Collateral to be registered in its name or the name of its nominee, designee, or assignee;

(II) Creditor may retain all or any portion of the Collateral for so long as it determines without being liable for any diminution in value, such retention being deemed necessary to the security of the Creditor;

(III) Creditor may exercise all voting powers and otherwise exercise all rights of a member of the Target Company with respect to the Collateral, in such manner as Creditor determines in its sole discretion, including, without limitation, voting the Collateral to sell or otherwise dispose of all assets and properties of the Target Company;

(IV) Creditor shall have the exclusive right to receive all distributions, of any kind, with respect to the Collateral, including, without limitation, Distributions;

(V) Creditor may sell, transfer, or otherwise dispose of all or any part of the Collateral, at private or public sale, without advertisement of the time or place of the sale (or any adjournment thereof), free and clear of any right of redemption by the Debtor or Debtor’s successors and assigns (such right of redemption being expressly waived by Debtor), whether for cash or credit or other property, at such prices and in such manner and to such purchaser (including the Creditor) as the Creditor may determine in its sole discretion; it being understood that the proceeds thereof will be applied to the Indebtedness and the expenses of sale (it being understood by the Debtor that the Debtor will remain liable for any and all deficiencies); and/or

(VI) Creditor may exercise any and all other rights and remedies expressly set forth in or arising pursuant to this Agreement or under applicable law.

If any notification of intended disposition by Creditor of any of the Collateral is required by law, such notification will be deemed reasonably and properly given if given at least seven (7) days before such disposition. The Creditor shall have no obligation or duty to exercise any of the rights, privileges, options or powers inuring to the Creditor under this Agreement, and shall have no responsibility for its delay or failure to do so. The Creditor shall not be required at any time to register the Collateral under the Securities Act of 1933 or any applicable state securities laws.

10. Termination. This Agreement and all rights of the Creditor under and pursuant to this Agreement will terminate at such time as Creditor is satisfied that the Indebtedness and all other obligations of the Debtor and Debtor under the Note and other Loan Documents are indefeasibly paid and performed in full without reinstatement, disgorgement or repayment by reason of a preference, other creditor action or by operation of law.

11. Appointment of Creditor. Debtor hereby makes, constitutes and appoints Creditor its true and lawful attorney-in-fact with full power of substitution to take any action in furtherance of this Agreement, including, without limitation, the signing of financing statements, endorsing of instruments, and, the execution and delivery of all documents and agreements necessary to perfect its security interest, prevent waste to the Collateral, and, upon the occurrence of an Event of Default only, collect, dispose of or enforce its rights in the Collateral. Such appointment shall be deemed irrevocable and coupled with an interest.

12. Waivers. Debtor hereby waive all defenses otherwise available to parties liable or whose property stands as security, including, without being limited to, the following: presentment, demand,

protest and notice of dishonor and nonpayment with respect to any of the Indebtedness, the enforcement and preservation of any lien or rights of setoff otherwise held by Creditor and the enforcement and preservation of any of the Indebtedness or of any guaranty or other undertaking. Debtor agrees that Creditor may enforce any security interest granted hereunder without being obligated first to enforce any other security interest, mortgage, guaranty or other source of collection whether granted by Debtor or any other person.

Debtor’s obligations hereunder shall remain fully binding although Creditor may have waived one or more defaults by Debtor, extended the time for performance by Debtor, released, returned or misapplied other collateral at any time given as security for Debtor’s obligations and/or released Debtor from the performance of its obligations under the Loan Documents. Any modification of the Loan Documents or waiver of the performance thereof, the giving by the Creditor of any extension of time for the performance of any of the obligations of the Debtor, any other forbearance on the part of the Creditor or any failure by the Creditor to enforce any of its rights under the Note and other Loan Documents shall not in any way release the Debtor from liability hereunder or terminate, affect or diminish the validity of this Agreement, notice to the Debtor of any such modification, waiver, extension, forbearance or failure or of any default by the Debtor under the terms thereof being hereby waived. The Debtor waives any defense based upon or arising by reason of (a) any disability or other defense of the Debtor or any other person; (b) the cessation or limitation from any cause whatsoever, other than final and irrevocable payment and performance in full, of the Debtor’s obligations under the Loan Documents; (c) any lack of authority of any officer, director, partner, agent or any other person acting or purporting to act on behalf of the Debtor which is a corporation, partnership or other type of entity, or any defect in the formation of the Debtor; or (d) any modification of the Loan Documents, in any form whatsoever.

This Agreement shall remain in full force and effect notwithstanding the institution by or against Debtor of bankruptcy, reorganization, readjustment, receivership or insolvency proceedings of any nature, or the disaffirming of the Loan Documents in any such proceedings or otherwise. Notwithstanding any prior revocation, termination or discharge hereof, the effectiveness of this Agreement shall continue to be reinstated, as the case may be, in the event that any payment received or credit given by Creditor in respect of the liabilities is returned, disgorged or rescinded as a preference, impermissible setoff, diversion of trust funds, fraudulent conveyance or otherwise under any applicable state or federal law, including, without limitation, laws pertaining to bankruptcy or insolvency, in which case this Agreement shall thereafter be enforceable against Debtor as if such returned, disgorged or rescinded payment or credit had not been received or given by Creditor, and whether or not Creditor relied upon such payment or credit or changed its position as a consequence thereof.

13. Cooperation Agreement. Until the Indebtedness and all other obligations of the Debtor under the Note and other Loan Documents are indefeasibly paid and performed in full without right of reinstatement, disgorgement or repayment by reason of a preference, other creditor action or by operation of law, and until the termination of this Agreement in accordance with Section 10 of this Agreement, Debtor agrees to not take or permit any action which obstructs, impedes or infringes upon the enforcement by the Creditor of the Creditor’s rights, benefits and remedies under this Agreement, the Note and/or the other Loan Documents.

14. General Terms and Conditions

14.1 Introduction Paragraphs. The Introduction Paragraphs to this Agreement are incorporated in and made a part of this Section 14.1 by reference.

14.2 Facsimiles and Electronic Transmissions. This Agreement may be signed by facsimile or electronically, in which case each facsimile or electronic version will be effective as if an original. Any party delivering an executed counterpart of this Agreement by facsimile or electronic transmission shall also deliver a manually executed counterpart of this Agreement but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.

14.3 Further Assurance. From time to time, the Debtor shall execute and deliver to Creditor such additional documents, certificates and instruments as Creditor may require to carry out the purposes of this Agreement and to protect Creditor’s rights hereunder.

14.4 No Waiver. No delay on the part of Creditor in exercising any right, power or privilege hereunder shall operate as a waiver thereof, and no single or partial exercise of any right, power or privilege hereunder shall preclude other or further exercise thereof, or be deemed to establish a custom or course of dealing or performance between the parties hereto, or preclude the exercise of any other right, power or privilege.

14.5 Modification. No waiver of any provision of this Agreement shall be effective unless the same shall be in writing signed by Creditor, and then such waiver shall be effective only in the specific instance and for the purpose for which given. An amendment, allonge, extension, modification, renewal, replacement, restatement or supplement to this Agreement will only be effective if consented to in writing by Creditor. No notice to or demand on Debtor in any case shall entitle Debtor to any other or further notice or demand in the same, similar or other circumstances. This Agreement may not be modified by contrary course of conduct or usage of trade. Creditor shall not be deemed to have consented to any modification or waiver by its silence, even if Creditor fails, refuses or delays its response to a request for modification or waiver from Debtor.

14.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the Debtor and Creditor, provided, Debtor shall not have the right to assign this Agreement or any rights or obligations under this Agreement without the prior express written consent of Creditor which consent may be withheld, delayed or conditioned in the discretion of the Creditor and with or without notice to Debtor. The Creditor’s silence or other failure to respond to any such request for consent shall be deemed to signify the Creditor’s refusal to give such consent. Any purported assignment made in violation hereof shall be void.

This Agreement shall be enforceable by and inure to the benefit of the Creditor and its successors and assigns even if it is not signed by the Creditor.

14.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF MICHIGAN, WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS OF THE STATE OF MICHIGAN OR ANY OTHER JURISDICTION.

14.8 WAIVER OF RIGHT TO JURY TRIAL. DEBTOR UNDERSTANDS THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THE SAME MAY BE WAIVED. DEBTOR, AFTER CONSULTATION OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN THE EVENT OF ANY LITIGATION OR COURT PROCEEDING REGARDING PERFORMANCE OR ENFORCEMENT OF OR IN ANY WAY RELATED TO THE LOAN, THIS AGREEMENT, THE NOTE, OR ANY OTHER LOAN DOCUMENTS.

14.9 Construction

14.9.1 Nouns and Pronouns. Nouns and pronouns will be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or persons, firm or corporation may in the context require.

14.9.2 Descriptive Headings and Captions. The headings and captions to the sections and subsections of this Agreement are inserted for reference only and are not to be either taken as limiting or extending the provisions of this Agreement, or given any effect on the construction or interpretation of this Agreement.

14.9.3 Vague Terms. Debtor and Creditor each participated in the drafting, preparation and negotiation of this Agreement. Therefore, no one party is or should be considered to be the drafter of this Agreement, and any rule of construction which favors or gives the benefit of any doubt, uncertainty or ambiguity over the interpretation of this Agreement to one party over the other shall not be applicable (and is waived), even if one party physically reduced this Agreement to writing.

14.9.4 Include or Including. Whenever the words “include”, “includes” and “including” are used in this Agreement, such words shall be deemed to be followed by the words “without limitation”.

SIGNATURE ON FOLLOWING PAGE

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE TO

STOCK PLEDGE AND SECURITY AGREEMENT

In the presence of the witnesses whose signatures appear below, the Debtor has caused this Agreement to be executed and delivered as of the date set forth above:

WITNESS	Farber Properties Group, LLC


/s/ Sherri Brown	By	/s/ David Farber
		David Farber, Its: Manager


/s/ Sherri Brown	And By		/s/ Jeffrey Farber
		Jeffrey Farber, Its: Manager

CREDITOR ACCEPTANCE

The Creditor accepts and agrees to the foregoing:

/s/ William Farber
William Farber

EXHIBIT A

COLLATERAL ASSIGNMENT OF STOCK

FOR VALUE RECEIVED, Farber Properties Group, LLC, a Michigan limited liability company (the “Assignor”), hereby assigns and transfers to (the “Assignee”), five million (5,000,000) shares of the authorized, issued and outstanding capital stock (the “Target Stock”) of Lannett Company, Inc., a Delaware corporation (the “Target Company”). Assignor does hereby irrevocably appoint the Target Company and its Officers to act as attorney and agent to transfer the Target Stock on the books of the Target Company with full power of substitution.

This Collateral Assignment of Target Stock is made pursuant to a Stock Pledge and Security Agreement dated as of , 2008 from Assignor to and for the benefit of Assignee.

Dated:

IN THE PRESENCE OF:

WITNESS

Farber Properties Group, LLC

		DO NOT SIGN EXHIBIT


Signature	By David Farber, Its: Manager


		DO NOT SIGN EXHIBIT


Signature	By Jeffrey Farber, Its: Manager

EX-99.4 5 a08-11798_2ex99d4.htm EX-99.4

EXHIBIT 99.4

Joint Filing Agreement

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock, $0.001 par value per share of Lannett Company, Inc., and that this Agreement be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned hereby executed this Agreement this 16^th day of May, 2008

	Farber Properties Group, LLC

	/s/ David Farber
	Name:	David Farber
	Title:	Manager


	/s/ David Farber
	Name:	David Farber


	/s/ Jeffrey Faber
	Name:	Jeffrey Farber

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