AGREEMENT OF SALE

TABLE OF CONTENTS

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AGREEMENT OF SALE

THIS AGREEMENT OF SALE (the “Agreement”) is made as of July 31, 2009, by and between Anvil Construction Company, Inc. a Pennsylvania Corporation,  having an address of 2817 Southampton Road, Philadelphia, PA, 19154 (the “Seller”), and Lannett Company, Inc., a Delaware Corporation having an address of  9000 State Road, Philadelphia, PA 19136 , or its nominee or assignee (the “Buyer”).

Intending to be legally bound hereby, the parties hereto agree:

1.                                       Sale and Purchase .  Subject to the terms and conditions hereinafter set forth, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase and accept from Seller:  (a) all certain lots or pieces of ground (the “Land”), together with the buildings, structures and other improvements erected thereon (the “Improvements”), situated at 13200 Townsend Road, Byberry East section of the Philadelphia Industrial Park, Philadelphia, PA (under and subject to a lease with Buyer as Lessee and Seller as Lessor referred to herein as (the “Existing Lease”) and attached hereto as Exhibit “E”, all as more particularly described in Exhibit “A” attached hereto (the Land and the Improvements are referred to herein, together, as the “Real Estate”); (b) all easements, rights and privileges appurtenant to the Real Estate (the “Appurtenances”) (the Real Estate and Appurtenances are referred to herein collectively as the “Property).

2.                                       Purchase Price .  The aggregate purchase price for the Property (the “Purchase Price”) shall be as outlined below based on the date of Closing under this Agreement:

The Purchase Price shall be paid to Seller by Buyer as follows:

2.1                                          Three Hundred, Sixty Thousand ($360,000.00) Dollars (the “Deposit”) by certified check on the date of this Agreement, the receipt whereof (subject to collection) is hereby acknowledged, which sum has been delivered into escrow in accordance with Paragraph 3 hereof; and

2.2                                          The balance of the Purchase Price at Closing (as hereinafter defined) in cash or by bank certified or cashier’s check or, at Seller’s direction, by wire transfer of immediately available federal funds (if a check or by wire transfer, then in any case payable to or transferred to the order or account of Seller or such other person as Seller may designate in writing).

3.                                       Escrow of Deposit .

3.1                                          The Deposit has this day been deposited with and shall be held in escrow by Roddy, Inc. (the “ Agent”).  The parties and Agent agree that the Deposit, together with all interest earned thereon (the “Escrow Funds”), shall be applied as follows:

3.1.1                                   If Closing is held, the Escrow Funds shall be paid over to Seller and shall be credited to the Purchase Price.

3.1.2                                   If Closing is not held by reason of Buyer’s default, the Escrow Funds shall be paid over to Seller and shall be retained by Seller as provided for in Paragraph 15.1 below.

3.1.3                                   If Closing is not held by reason of Seller’s default, the Escrow Funds shall be paid over to Buyer for use and application by Buyer as provided for in Paragraph 15.2 below.

3.1.4                                   If Closing is not held by reason of a failure of condition and not by reason of a default by Seller or Buyer hereunder, the Escrow Funds shall be paid over to Buyer, neither party shall have any further liability or obligation hereunder, and this Agreement shall terminate.

3.2                                          The Escrow Funds shall be held in an interest bearing money-market type account with a federally insured national or state-chartered bank, savings bank, or savings and loan association.

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3.3                                          Agent and its stockholders and employees are acting as agents only, and will in no case be held liable either jointly or severally to either party for the performance of any term or covenant of this Agreement or for damages for the nonperformance hereof, nor shall Agent be required or obligated to determine any questions of fact or law.  Agent’s only responsibility hereunder shall be for the safekeeping of the Escrow Funds and the full and faithful performance by the Agent of the duties imposed by this Paragraph 3.

3.4                                          Agent shall be obligated to disburse the proceeds of the Escrow Funds at Closing or upon any cancellation or termination of this Agreement, only upon the written instructions of both parties, should Agent in its sole discretion request such instructions; and in the absence of such instructions or in the event of any dispute, Agent shall be and is hereby authorized, but not obligated, to pay the entire amount of the Escrow Funds into court, and any expenses to Agent for so doing shall be payable out of the Escrow Funds.

4.                                       Covenants, Representations and Warranties of Seller .  Seller covenants, represents and warrants to Buyer as follows:

4.1                                          Seller has the power and authority to sell, transfer, convey and deliver the Property to be sold and purchased hereunder.

4.2                                          The execution and delivery of this Agreement, the consummation of the transactions provided for herein and the fulfillment of the terms hereof will not result in a breach of any of the terms or provisions of, or constitute a default under, any agreement of Seller or any instrument to which Seller is a party or by which Seller or the Properties are bound, or any judgment, decree or order of any court or governmental body, or any applicable law, rule or regulation.

4.3                                          No notice by any governmental or other public authority has been served upon the Seller, or anyone on the Seller’s behalf, nor does Seller have any knowledge relating to violations of any applicable state or federal statutes or regulations together with all housing, building, safety, fire or other local ordinances.  Provided there is a Closing hereunder, Buyer will be responsible for and shall comply, at Buyer’s expense, with the requirements of any and all notices relating to violations of the foregoing issued after Closing.  Seller further represents that the Property is zoned L-2 — Limited Industrial.

4.4                                          As of the Commencement Date of the Lease between Seller and Buyer referred to in Article 6.2.4 hereinbelow, there is no action, suit or proceeding pending or, to the knowledge of Seller, threatened, against or affecting the Property or any portion thereof or relating to or arising out of the ownership, management or operation of the Property in any court or before or by any federal, state or local department, commission, board, bureau or agency or other governmental instrumentality which could, if adversely decided, have any adverse effect on Buyer’s acquisition, ownership, development or use of the Property.

4.5                                          Except for the Lease, there are no outstanding leases, tenancies, licenses or other rights of occupancy or use for any portion of the Property.

5.                                       Representations and Warranties of Buyer .  Buyer represents and warrants to Seller as follows:

5.1                                          Buyer has the power and authority to purchase the Property hereunder.

5.2                                          The execution and delivery of this Agreement, the consummation of the transactions provided for herein and the fulfillment of the terms hereof will not result in a breach of any of the terms or provisions of, or constitute a default under, any agreement of Buyer or any instrument to which Buyer is a party or by which Buyer is bound or any judgment, decree or order of any court or governmental body or any applicable law, rule or regulation.

5.3                                          It is understood that the Property has been or will be inspected by Buyer or Buyer’s duly authorized agent pursuant to Paragraph 21 hereof; that the same shall be purchased as a result of such inspections and not in reliance upon any representations, inducements or promises, either oral or written, made by the Seller, Agent or any selling agent or other agent or Seller except as expressly stated in this Agreement, and Seller and Agent shall not be responsible or liable for any agreement, condition or stipulation not set forth herein relating to or affecting the Property.

6.                                       Closing .

6.1                                          The Closing under this Agreement (the “Closing”) shall be held on or before the date that is sixty (60) days  from the date of this Agreement.

6.2                                          At Closing, Seller shall deliver to Buyer the following:

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6.2.1                                        A Special Warranty Deed to the Real Estate, duly executed and acknowledge by Seller and in proper form for recording, conveying fee simple title to the Real Estate to Buyer;

6.2.2                                         Possession to the Property shall be delivered in “AS IS WHERE IS” condition as of the date of this Agreement, under and subject to the existing lease between Buyer as Lessee and Seller as Lessor.

6.2.3                                      A valid assignment of the existing lease, duly executed and acknowledged, pursuant to which Seller shall assign to Buyer all of Seller’s right, title and interest in and to the existing lease and Buyer shall assume the obligations of Seller under the existing lease.  Such assignment shall include an indemnification from Seller to Buyer against liability for claims asserted against Buyer under the existing lease for events occurring prior to Closing and an indemnification from Buyer to Seller against liability for claims asserted against Seller for events occurring after Closing.

6.2.4                                      A written certification from the Department of Licenses and Inspections of the City of Philadelphia setting forth the zoning classification of the Property and that there are no notices of any uncorrected municipal code violations.  Buyer shall be responsible to correct any municipal code violations in accordance with its obligations under the Existing Lease  by and between Seller and Buyer for the Premises dated June 26, 2006, a copy of which is attached hereto as Exhibit “       ” , but in no event is Buyer responsible for any violations relating to conditions that pre-date the Commencement Date of the Existing Lease so long as any such violations are not due to acts of Buyer.

6.3                                          At Closing, Buyer shall deliver to Seller the following:

6.3.1                                    A title company or bank certified or cashier’s check, or at Seller’s direction, a wire transfer of immediately available federal funds in either case payable to or transferred to the order or account of Seller or to such other person as Seller shall designate in writing for the balance of the Purchase Price required under Paragraph 2 hereof.

6.4                                          Notwithstanding anything to the contrary herein concerning apportionment and/or responsibility for expenses, real estate taxes, insurance, pro rations and maintenance the responsibilities, terms and conditions of the Existing Lease shall supersede and amend any terms to the contrary set forth in this Agreement of Sale.

7.                                       Apportionments; Expenses .

7.1                                          Apportionments .  The following items shall be adjusted and apportioned between Seller and Buyer as follows:

(a)                                        Real estate taxes, minimum and addition