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                                                                    EXHIBIT 10.7

               TERMS OF EMPLOYMENT AGREEMENT WITH ARTHUR BEDROSIAN
                           EFFECTIVE JANUARY 25, 2002

      Your salary for this position (Vice President of Business Development)
will be paid at the rate of $2,980.77 per pay period (which is equivalent to an
annual base salary of $155,000 per year), in accordance with the weekly payment
schedule now being used by the Company. At the end of each calendar year, the
Board of Directors, or its designee, may, in their sole discretion, award you a
bonus based upon your individual performance and the Company's performance
during the immediately preceding calendar year.

      You will be eligible upon the inception of your employment to participate
in the employee benefit plans that the Company offers to other full-time
employees, including its health and dental insurance plans, subject to the same
cost-sharing and co-payment provisions, where applicable. Descriptions of the
benefit plans currently being offered are available in our Human Resources
Department. These plans may, from time to time, be amended or terminated by the
Company in its sole discretion with or without prior notice. Lannett also will
provide you during your employment with a $600 net monthly allowance for a car.

      Should Lannett terminate your employment other than "for cause" (as
defined below) within the first year of your employment, you will be eligible
for severance compensation in an amount to be determined by Lannett, but not
less than the amount that when added to your compensation paid to date would be
equal to one year of compensation, or $155,000. You will also be eligible to
continue your participation in the Company's medical benefit plans for six (6)
months, at no cost to you. For purposes hereof, "for cause" is defined to
include engaging in unethical business practices or conduct which creates a
conflict of interest, fraud, malfeasance, criminal behavior, and willful conduct
in violation of Lannett's Non-Harassment Policy or Corporate Handbook. If the
Company is sold or a majority of the Company's ANDAs (Abbreviated New Drug
Applications) are sold during your employment, and the Company or new
organization terminates your employment, you will be eligible for severance
compensation in an amount equal to one year of your current base salary at the
time of termination, which will be no less than your original base salary of
$155,000. In this scenario, you will also be eligible to continue your
participation in the Company's medical benefit plans, at no cost to you, for up
to one year. Additionally, all option grants issued to you, whether they are
vested or unvested, will become immediately vested for your benefit. If the
Company is sold during your employment, and the organization that takes control
of the Board of Directors desires to continue your employment with the same
assignment and place of business, regardless of whether you remain with the
buying organization or not, you will be paid an amount equal to six months of
your current base salary at the time of the sale transaction for the Company,
which will be no less than six (6) months of your original base salary of
$155,000.

It is understood that you are not being offered employment for a definite period
of time and that either you or the Company may terminate the employment
relationship at any time and for any reason without prior notice. Nothing in the
Company's offer to you of compensation (including salary and bonus), stock
options or benefits should be interpreted as creating anything other than an
at-will employment relationship. In addition, the Company reserves the right to
periodically review the salary, bonus and benefits it offers to you and to
adjust them from time to time in its sole discretion but in no case will the
salary be adjusted below your original base salary.

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                                                                    EXHIBIT 10.8

               TERMS OF EMPLOYMENT AGREEMENT WITH LARRY DALESANDRO
                              EFFECTIVE MAY 3, 2002

      Should Lannett terminate your employment other than "for cause" (as
defined below), you will be eligible for severance compensation in an amount to
be determined by Lannett, but not less than six (6) months of your base salary
at the time of termination. You will also be eligible to continue your
participation in the Company's medical benefit plans for six (6) months, at no
cost to you. For purposes hereof, "for cause" is defined to include engaging in
unethical business practices or conduct which creates a conflict of interest,
fraud, malfeasance, criminal behavior, and willful conduct in violation of
Lannett's Non-Harassment Policy or Corporate Handbook. If the Company is sold or
a majority of the Company's ANDAs (Abbreviated New Drug Applications) are sold
during your employment, and the Company or new organization terminates your
employment, you will be eligible for severance compensation in an amount equal
to one year of your current base salary at the time of termination. In this
scenario, you will also be eligible to continue your participation in the
Company's medical benefit plans, at no cost to you, for up to one year.
Additionally, all option grants issued to you, whether they are vested or
unvested, will become immediately vested for your benefit. If the Company is
sold during your employment, and the organization that takes control of the
Board of Directors desires to continue your employment with the same assignment
and place of business, regardless of whether you remain with the buying
organization or not, you will be paid an amount equal to six months of your then
current base salary at the time of the sale transaction for the Company.

      It is understood that these benefit terms are not being offered for a
definite period of time and that either you or the Company may terminate the
employment relationship at any time and for any reason without prior notice.
Nothing in this letter to you of compensation, stock options or benefits should
be interpreted as creating anything other than an at-will employment
relationship. In addition, the Company reserves the right to periodically review
the salary, bonus and benefits it offers to you and to adjust them from time to
time in its sole discretion but in no case will the salary be adjusted below
your current base salary.

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                                                                    EXHIBIT 10.9

        AGREEMENT BETWEEN LANNETT COMPANY, INC. AND SIEGFRIED (USA), INC.

DATED: October 31, 2002

Siegfried (USA), Inc. of 33 Industrial Park Road, Pennsville, NJ 08070
("Seller") will sell and Lannett Company Inc. of Philadelphia, Pennsylvania
19136 ("Buyer") will buy the Product on the terms and conditions contained
herein. The terms of this Agreement and any signed addenda attached to this
Agreement constitute the entire Agreement between the Seller and Buyer and
supersede any existing sales contract relating to the Product. This Agreement
must be signed and returned by Buyer within 30 days from the date first
specified above and will not bind Seller unless signed by an authorized
representative of Seller. The Agreement does not bind the Buyer unless it
receives the Agreement signed by an authorized representative of the Seller on
or before the date specified above. Subject to the terms and conditions of this
Agreement, Seller shall sell to Buyer, and Buyer shall purchase exclusively from
Seller, the Product

PRODUCT: Primidone USP

CONTRACT TERM: The initial term of this Agreement shall be for a period of
Twelve (12) months from the date first specified above.

QUANTITY: 100 Percent (100%) of Buyer's yearly requirements for Product

FOB (Incoterms 2000): Pennsville, New Jersey

BASE PRICE:

[CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION] US
Dollars per Kilogram for all quantities provided total requirements exceed
CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION]
Kilograms during a period of Twelve (12) months.

CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION] US
Dollars per Kilogram for all quantities if total purchases do not exceed
CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION]
Kilogram during a period of Twelve (12) months.

SHIP TO: Lannett Company Inc. 9000 State Road Philadelphia, PA 19136

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STANDARD TERMS AND CONDITIONS OF SALE

1.    WARRANTY. Seller warrants that the Product will conform in all material
      respects to the attached SPECIFICATIONS.

2.    DISCLAIMER OF FURTHER WARRANTIES. EXCEPT AS SET FORTH ABOVE, SELLER MAKES
      NO WARRANTY, REPRESENTATION OR CONDITION OFANY KIND, EXPRESS OR IMPLIED
      (INCLUDING NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE PRODUCT FOR
      ANY USE CONTEMPLATED BY BUYER) CONCERNING THE PRODUCT OR CONTAINERS IN,
      WHICH THE PRODUCT IS SHIPPED.

3.    LIMITATION OF REMEDIES AND LIABILITY. IN NO EVENTWILL BUYER'S DAMAGES OR
      OTHER RECOVERY FROM SELLER IN ANY CAUSE OF ACTION, WHETHER BASED ON
      CONTRACT, TORT, OR ANY OTHER THEORY, EXCEED THE PRICE PAID BY BUYER FOR
      THE SPECIFIC PRODUCT AS TO WHICH THE CLAIM IS MADE. SELLER SHALL NOT BE
      LIABLE, AND BUYER WAIVES ALL CLAIMS AGAINST SELLER, FOR PROSPECTIVE
      PROFITS OR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES BASED
      UPON NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY IN TORT OR ANY OTHER
      CAUSE OF ACTION. Seller's total, complete and exclusive liability
      hereunder shall be limited to the remedies contained in this Section 3.
      Seller will not be liable to Buyer for any contribution to or indemnity
      against all or any part of any loss, damage or injury to persons or
      property resulting from Buyer's handling, storage, transportation, resale
      or use of the Goods in manufacturing processes, or in combination with
      other substances, or otherwise. All technical advice, recommendations and
      services provided by Seller are intended for use by persons having skill,
      at their own risk, and Seller assumes no responsibility, and Buyer hereby
      waives all claims against Seller, for results obtained or damages incurred
      from the use of Seller's advice, recommendations or services. Buyer will
      indemnify and hold Seller harmless from and against all damages, costs and
      expenses resulting from special marking of the Product or containers in
      accordance with Buyer's requests, Buyer's purchase, use, marketing,
      manufacturing or sale of the Product or Buyer's failure to recall finished
      product.

      In the event Buyer rejects a lot pursuant to Section 9, Buyer may return
      to Seller, at Seller's shipping expense and risk, any Product sold by
      Seller to Buyer which does not conform to the Specifications, for credit
      or replacement, at the election of Seller within sixty (60) days of
      receipt. Credit for properly returned items will be given when Seller
      receives such Product. No such return may be made unless Buyer first
      receives written authorization for the return

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      from Seller and such return is made in accordance with such authorization.
      Shipping costs for shipment of replacement Product by Seller back to Buyer
      via ground transportation shall be paid by Seller. Seller shall have no
      obligation to grant credit for or replace any Product sold hereunder which
      has been subject to misuse, mishandling, neglect, accident, abuse or has
      been subjected to alteration or modifications unauthorized by the Seller.

4.    FORCE MAJEURE. Failure of any party to perform its obligations under this
      Agreement (except the obligation to make payments when properly due) shall
      not subject such party to any liability or place them in breach of any
      term or condition of this Agreement to the other party if such failure is
      due to any cause beyond the reasonable control of such non-performing
      party ("force majeure"), unless conclusive evidence to the contrary is
      provided. Causes of non-performance constituting force majeure shall
      include, without limitation, acts of God, fire, explosion, flood, drought,
      war, riot, sabotage, embargo, strikes or other labor trouble, failure in
      whole or in part of suppliers to deliver on schedule materials, equipment
      or machinery, interruption of or delay in transportation or energy, a
      national health emergency or compliance with any order or regulation of
      any government entity acting with color of right. The party affected shall
      within 5 (five) business days notify the other party of the condition
      constituting force majeure as defined herein and shall exert reasonable
      commercially efforts to eliminate, cure and overcome any such causes and
      to resume performance of its obligations with all possible speed; provided
      that nothing herein shall obligate a party to settle on terms
      unsatisfactory to such party any strike, lockout or other labor
      difficulty, any investigation or other proceeding by any public authority
      or any litigation by any third party. If a condition constituting force
      majeure as defined herein exists for more than thirty (30) consecutive
      days, the parties shall meet to negotiate a mutually satisfactory
      resolution to the problem, if practicable.

5.    FORECASTS.

        a.  On or prior to the 15th business day of the month preceding each
            quarter of this term (i.e. December 15, March 15, June 15, and
            September 15), Buyer shall provide Seller with a rolling eighteen
            month forecast of its estimated requirements for the Product. Each
            quarterly Forecast will provide the amount of Product required as
            well as the desired delivery dates. The forecasts provided pursuant
            to this Section 5 are hereafter referred to individually as a
            "Forecast" and collectively as the "Forecasts." Buyer may amend its
            Forecasts, provided that such changes to the Forecasts shall not
            affect Product delivery dates and quantities that are within ninety
            (90) days after the date of such change. The binding forecast, the
            current calendar quarter, automatically becomes a purchase order for
            the quantity and delivery dates requested upon acceptance by Seller
            pursuant to Section 5(b).

        b.  Exhibit B contains the Forecast for the first Eighteen (18) months
            of this Agreement and the Seller warrants that it has the production
            capacity to manufacture the Product taking into account its other
            commitments and obligations in the quantities and delivery dates set
            out in the Forecast.

        c.  Within ten (10) business days of receiving a Forecast the Seller
            will notify the Buyer whether or not it has the production capacity
            to manufacture the quantities of the Product as forecasted and to
            deliver the Product on the requested delivery date. If the seller
            confirms the quantity and delivery dates, the quantity becomes the
            Deliverable Quantity and the delivery dates become the Confirmed
            Delivery Dates. If the Seller cannot meet the quantity and delivery
            date requirements, the Seller and Buyer shall agree on the
            quantities and delivery dates that are acceptable. Buyer

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            may obtain, at its own expense, any quantity that the Seller cannot
            supply on the requested delivery date(s), but only for the period of
            time that the Seller is unable to supply the quantity requested.
            Buyer may deduct the amount of the Product obtained by an alternate
            source from the Quantity specified in this Agreement, without
            affecting the Price.

        d.  Seller shall be under no obligation to supply Product to Buyer in
            excess of the Quantity specified in this Agreement, unless otherwise
            agreed upon in accordance with this Section 5.

        e.  In the event the Seller is unable to supply Buyer with all or part
            of the Deliverable Quantity within fourteen days following the
            Confirmed Delivery Date or unable to supply the agreed upon
            quantities, by force majeure under Section 15, or otherwise, Seller
            will reconfirm the Deliverable Quantity and New Delivery Date. If
            acceptable to the Buyer, the new Quantity becomes the Deliverable
            Quantity and the new Date becomes the Confirmed Delivery date. If
            Seller has to change the Deliverable Quantity and Confirmed Delivery
            and such new dates are not acceptable to Buyer on more than three
            occasions in a calendar year, the Buyer may terminate this Agreement
            in accordance Section 15, Termination for Cause provision. If the
            new Deliverable Quantity and Confirmed Delivery Dates are not
            acceptable, the Buyer may purchase at its own expense from another
            source such portion of Deliverable Quantity, which Seller cannot
            supply, but only for the period of time that Seller is unable to
            supply the Deliverable Quantity. Buyer may deduct any quantity not
            shipped to Seller because of any such shortage of materials from the
            Quantity specified in this Agreement, without affecting the Price.

6.    SHORTAGES. If for any reason a shortage occurs in Seller's supply of the
      materials necessary to produce the Product, Seller shall have the right to
      satisfy its own requirements, and the requirements of its or its parent's
      divisions, subsidiaries and affiliates for such materials, whether or not
      any of such materials are allocated to the production of Product. Seller
      will make best efforts to provide Buyer with the maximum allocation of
      product should the situation exist because of any such shortage of
      materials.

7.    HARDSHIP. If, during the term of the Agreement, performance of the
      Agreement should lead to unreasonable hardship for one or other party,
      taking the interests of both parties into account, both parties shall
      endeavor to agree amicably to amend the Agreement in the light of the
      change in circumstances. This includes but is not limited to: extra
      production costs exceeding ten percent (10%) incurred by the Seller and
      not in their immediate control; a decreased demand exceeding ten percent
      (10%) of the minimum requirements for Buyer's Products; any competitive
      disadvantage for Seller or Buyer which may arise under this Agreement.

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8.    PAYMENT TERMS. Seller shall invoice Buyer upon shipment. Payment is due
      thirty (30) days from date of invoice. The date of the invoice shall be no
      sooner than the date of shipment. Buyer shall have the right in the case
      of a shipment of Product which the Buyer has determined in good faith does
      not conform to the Specifications to withhold payment until such time as
      the Product's conformity to the Specifications is determined in accordance
      with Section 11 hereof.

9.    CLAIMS. Seller will provide a Certificate of Analysis (C of A) for each
      lot of Product shipped to Buyer. Buyer shall analyze each lot of Product
      within Thirty (30) business days of receipt. If Product fails to meet
      SPECIFICATIONS based on such tests, Buyer shall have the option of
      accepting or rejecting such lot. If Buyer accepts such lot, Seller shall
      have no further liability. If Buyer rejects such lot, Seller's liability,
      if any, shall be as set forth in Section 1 and 2 above. Acceptance or
      Rejection shall be made within forty-five (45) business days of receipt
      and shall be sent in writing to Seller. Failure to test or failure to
      reject within the time frames set forth above shall constitute an
      acceptance and Seller shall have no further liability with respect
      thereto.

10.   NOTICES. All notices under this Contract must be in writing and mailed or
      delivered to the attention of the General Plant Manager and the
      appropriate address set forth in the beginning of this Contract.

11.   CHANGE IN PROCESS. Seller shall notify Buyer prior to making any
      significant change in process reaction conditions for manufacture of
      Product. Following such a change, Seller will submit samples from finished
      lots to Buyer for their evaluation and approval of process change.

12.   TERMINATION FOR CAUSE. In the event one party is in material default of an
      obligation under this Contract (the Defaulting Party) the other party (the
      Non-defaulting Party) may terminate this agreement provided that (i) the
      Non-Defaulting Party has received notice in writing specifying the nature
      of the default (the Default Notice); and (ii) the Defaulting Party has not
      rectified the default within thirty (30) days after receipt from the
      Non-Defaulting Party. In the event of such termination, Buyer shall remain
      obligated to purchase and pay for and Seller shall be obligated to sell,
      all Deliverable Qualities. The Contract may also be terminated by either
      party if the other shall at any time (i) institute or have instituted
      against it any proceeding in bankruptcy or reorganization; (ii) enter into
      any composition or other arrangement with its creditors; or (iii) enter
      into liquidation.

13.   MISCELLANEOUS. No modification, waiver, or discharge of this Contract
      shall bind either party unless signed by its authorized representative. If
      either party assigns this Contract (other than to an affiliate) by
      operation of law or otherwise, without the consent of the other party, the
      assignment shall be null and void. New Jersey law will govern the
      validity, performance, construction and effect of this Contract. Seller
      may assign this contract without consent to a purchaser of all or
      substantially all of its assets or business.

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14.   SEVERABILITY. Each and every sentence, and each and every paragraph and
      provision of this Agreement shall be severable, and in the event any one
      or more of them is/are declared invalid or unenforceable, the others shall
      survive.

15.   RESOLUTION OF DISPUTE; CONTROLLING LAW. Any dispute arising out of or
      relating to this Agreement shall first be submitted to mediation in
      accordance with the CPR Mediation Procedure of the CPR Institute. Unless
      otherwise agreed, the parties will select a mediator from the CPR Panels
      of Distinguished Neutrals. Any such dispute arising out of or relating to
      this Agreement which has not been resolved by non-binding procedure as
      provided hereunder within thirty (30) days of the appointment of a
      mediator, shall be settled by arbitration; provided, however, that if a
      mediator is not selected within ten (10) days of submission of the dispute
      for mediation, or if either party will not participate in a non-binding
      procedure, the other party may initiate arbitration before expiration of
      the thirty (30) day period. The Federal Arbitration Act, 9 U.S.C. Sections
      1-16, shall govern the arbitration and any court having jurisdiction
      thereof may enter judgment upon the award rendered by the arbitrator. The
      place of arbitration shall be in the State of New Jersey. The arbitrator
      shall make his determination within thirty (30) days after the parties
      submit briefings with respect thereto. The award rendered by the
      arbitrator shall be in writing.

16.   HEADINGS. Headings used in this Agreement are for reference purposes only.

WHEREOF, the parties have executed this Contract as of the day and year first
above written.

LANNETT COMPANY, INC.

By: /s/ Larry Dalesandro
    -----------------------

Name: Larry Dalesandro

Title: Chief Operating Officer

Date: October 28, 2002

SIEGFRIED (USA), INC.

By: /s/ Dennis P. Bauer
    -----------------------

Name: Dennis P. Bauer

Title: VP Business Areas USA
Date: October 28, 2002

Note: Portions of Exhibit 10.9 have been omitted pursuant to a request fro
confidential treatment.

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