Exhibit 10.3


 


Execution Copy


 


REGISTRATION RIGHTS AGREEMENT dated as of October 26,
2007, 2007 (this “Agreement”) among Paramount
Acquisition Corp., a Delaware corporation (“Paramount”) and
the stockholders of B.J.K., Inc., a Delaware corporation doing business as
ChemRx (the “Company”), listed on Exhibit A
hereto (each a “Seller” and collectively, the “Sellers”).


 


Paramount, the Company and the Sellers, are parties to a Stock Purchase
Agreement, dated as of June 1, 2007 (the “Stock
Purchase Agreement”), pursuant to which Paramount agreed to purchase
from the Sellers, and the Sellers agreed to sell to Paramount, all the issued
and outstanding shares of common stock, without par value, of the Company in
exchange for the Cash Consideration and Stock Consideration (as such terms are
defined in the Stock Purchase Agreement).


 


In consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, the parties hereto agree
as follows:


 


ARTICLE 1


DEFINITIONS


 


Section 1.1                                      Definitions.
Capitalized terms used in this Agreement and not otherwise defined shall have
the meanings ascribed to them in the Stock Purchase Agreement. The following
terms shall, for the purposes of this Agreement and the Exhibits hereto, have
the following meanings (terms defined in the singular or the plural include the
plural or the singular, as the case may be):


 


“Commission”
means the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.


 


“Common
Stock” means the common stock, par value $0.0001 per share, of
Paramount.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect at the time.


 


“Other Registrable Securities” means the
shares of Common Stock or other securities registrable pursuant to the
Registration Rights Agreement, dated October 21, 2005, among Paramount and
the Investors party thereto.


 


“Register,”
“Registered”
and “Registration”
mean a registration effected by preparing and filing a registration statement
or similar document in compliance with the requirements of the Securities Act,
and the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.


 


“Registrable
Securities” means the shares of Common Stock issued to the Sellers
pursuant to the Stock Purchase Agreement, including any warrants, shares of
capital stock or other securities of Paramount issued as a dividend or other
distribution with respect to or in 


 

















 


exchange for or in replacement of such shares
of Common Stock; provided, however,
that as to any particular Registrable Securities, such securities shall cease
to be Registrable Securities when: (a) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been sold, transferred, disposed
of or exchanged in accordance with such Registration Statement; (b) such
securities shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by
Paramount and subsequent public distribution of them shall not require
registration under the Securities Act; (c) such securities shall have
ceased to be outstanding, or (d) the Commission makes a definitive
determination to Paramount that the Registrable Securities are salable under Rule 144(k).


 


“Registration
Statement” means a registration statement filed by Paramount with
the Commission in compliance with the Securities Act and the rules and
regulations promulgated thereunder for a public offering and sale of Common
Stock (other than a registration statement on Form S-4 or Form S-8,
or their successors, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another entity).


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect at the time.


 


“Underwriter”
means a securities dealer who purchases any Registrable Securities as principal
in an underwritten offering and not as part of such dealer’s market-making
activities.


 


Section 1.2                                      Descriptive
Headings; Certain Interpretations. The headings contained in this Agreement
are for reference purposes only and shall not control or affect the meaning or
construction of this Agreement. Except where expressly stated otherwise in this
Agreement, the following rules of interpretation apply to this
Agreement:  (i) ”or” is not exclusive and “include”, “includes” and “including” are not limiting; (ii) ”hereof”,
“hereto”, “hereby”, “herein” and “hereunder” and words of similar import when
used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement; (iii) “date hereof” refers to the
date of this Agreement; (iv) “extent” in the phrase “to the extent” means
the degree to which a subject or other thing extends, and such phrase does not
mean simply “if”; (v) definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms; (vi) references
to an agreement or instrument mean such agreement or instrument as from time to
time amended, modified or supplemented; (vii) references to a Person are
also to its permitted successors and assigns; (viii) references to an “Article”,
“Section”, “Clause” or “Exhibit” refer to an Article of, a Section or
Clause of, or an Exhibit to, this Agreement; (ix) words importing the
masculine gender include the feminine or neuter and, in each case, vice versa;
and (x) references to a Law include any amendment or modification to such Law
and any rules or regulations issued thereunder, whether such amendment or
modification is made, or issuance of such rules or regulations occurs,
before or after the date of this Agreement.


 


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ARTICLE 2 

REGISTRATION RIGHTS


 


Section 2.1                                      Demand
Registration.


 


(a)                                  Request for Registration. At any time and from time to time
on or after the Lock-Up Release Date, the Sellers (or their permitted
transferees) holding a majority-in-interest of the Registrable Securities may make
a written demand for registration under the Securities Act of all or part of
their respective Registrable Securities (such demand for registration, a “Demand Registration”).
Any Demand Registration shall specify the number of shares of Registrable
Securities proposed to be sold and the intended method or methods of
distribution thereof. Each Demand Registration, other than one effected
pursuant to Section 2.3, shall be subject to an aggregate price threshold
of not less than $10,000,000. Paramount will notify all other holders of
Registrable Securities, if any, of the demand, and each holder of Registrable
Securities who wishes to include all or a portion of such holder’s Registrable
Securities in the Demand Registration (each such holder including shares of
Registrable Securities in such registration, a “Demanding Holder”) shall so
notify Paramount within 15 days after the receipt by the holder of the notice
from Paramount. Upon any such request, the Demanding Holders shall be entitled
to have their Registrable Securities included in the Demand Registration,
subject to Section 2.1(d) and the provisos set forth in Section 3.1(a).
Paramount shall not be obligated to effect more than an aggregate of two Demand
Registrations under this Section 2.1(a) in respect of Registrable Securities.


 


(b)                                 Effective Registration. A registration will not constitute a
Demand Registration until the Registration Statement filed with the Commission
with respect to such Demand Registration has been declared effective and
Paramount has complied with all of its obligations under this Agreement with
respect thereto; provided, however,
that if, after such Registration Statement has been declared effective, the
offering of Registrable Securities pursuant to a Demand Registration is
interfered with by any stop order or injunction of the Commission or any other
governmental agency or court, the Registration Statement with respect to such
Demand Registration will be deemed not to have been declared effective, unless
and until, (i) such stop order or injunction is removed, rescinded or
otherwise terminated, and (ii) a majority-in-interest of the Demanding
Holders thereafter elect to continue the offering; provided,
further, that Paramount shall not be
obligated to file a second Registration Statement until a Registration
Statement that has been filed is counted as a Demand Registration or is
terminated.


 


(c)                                  Underwritten Offering. If a majority-in-interest of the Demanding
Holders so elect and such holders so advise Paramount as part of their
written demand for a Demand Registration, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, the right of any holder to include its
Registrable Securities in such registration shall be conditioned upon such
holder’s participation in such underwriting and the inclusion of such holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Demanding Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the Underwriter or Underwriters selected for such underwriting by a
majority-in-interest of the holders initiating the Demand Registration;
provided that such Underwriters are reasonably acceptable to Paramount.


 


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(d)                                 Reduction of Offering. If the managing Underwriter or
Underwriters for a Demand Registration that is to be an underwritten offering
advises Paramount and the Demanding Holders in writing that the dollar amount
or number of shares of Registrable Securities that the Demanding Holders desire
to sell, taken together with all other shares of Common Stock or other
securities that Paramount desires to sell and the shares of Common Stock, if
any, as to which registration has been requested pursuant to written
contractual piggy-back registration rights held by other stockholders of
Paramount who desire to sell, exceeds the maximum dollar amount or maximum
number of shares that can be sold in such offering without adversely affecting
the proposed offering price, the timing, the distribution method, or the
probability of success of such offering (such maximum dollar amount or maximum
number of shares, as applicable, the “Maximum Number of Shares”), then
Paramount shall include in such registration: (i) first, the Registrable
Securities as to which Demand Registration has been requested by the Demanding
Holders (pro rata in accordance with the number of shares that each such Person
has requested be included in such registration, regardless of the number of
shares held by each such Person (such proportion is referred to herein as “Pro Rata”))
that can be sold without exceeding the Maximum Number of Shares; (ii) second,
to the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (i), the shares of Common Stock or other securities that
Paramount desires to sell that can be sold without exceeding the Maximum Number
of Shares; (iii) third, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses (i) and (ii), Other
Registrable Securities and the shares of Common Stock or other securities
registrable pursuant to the terms of the Unit Purchase Option issued to EarlyBirdCapital, Inc.
or its designees in connection with Paramount’s initial public offering (the “Unit Purchase Option”
and such registrable securities, the “Option Securities”) as to which “piggy-back”
registration has been requested by the holders thereof, Pro Rata, that can be
sold without exceeding the Maximum Number of Shares; and (iv) fourth, to
the extent that the Maximum Number of Shares have not been reached under the
foregoing clauses (i), (ii) and (iii), the shares of Common Stock or other
securities for the account of other persons that Paramount is obligated to
register pursuant to written contractual arrangements with such persons and
that can be sold without exceeding the Maximum Number of Shares.


 


(e)                                  Withdrawal. If a majority-in-interest of the Demanding
Holders disapprove of the terms of any underwriting or are not entitled to
include all of their Registrable Securities in any offering, such
majority-in-interest of the Demanding Holders may elect to withdraw from
such offering by giving written notice to Paramount and the Underwriter or
Underwriters of their request to withdraw prior to the effectiveness of the
Registration Statement filed with the Commission with respect to such Demand
Registration. If the majority-in-interest of the Demanding Holders withdraws
from a proposed offering relating to a Demand Registration, then such
registration shall not count as a Demand Registration provided for in this Section 2.1.


 


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Section 2.2                                      Piggy-Back
Registration.


 


(a)                                  Piggy-Back Rights. If at any time on or after the Lock-Up
Release Date Paramount proposes to file a Registration Statement under the
Securities Act with respect to an offering of equity securities, or securities
or other obligations exercisable or exchangeable for, or convertible into,
equity securities, by Paramount for its own account or for stockholders of
Paramount for their account (or by Paramount and by stockholders of Paramount
including, without limitation, pursuant to Section 2.1), other than a
Registration Statement (i) filed in connection with any employee stock
option or other benefit plan, (ii) for an exchange offer or offering of
securities solely to Paramount’s existing stockholders, (iii) for an
offering of debt that is convertible into equity securities of Paramount or (iv) for
a dividend reinvestment plan, then Paramount shall (x) give written notice of
such proposed filing to the holders of Registrable Securities as soon as
practicable but in no event less than 10 days before the anticipated filing
date, which notice shall describe the amount and type of securities to be
included in such offering, the intended method or methods of distribution, and
the name of the proposed managing Underwriter or Underwriters, if any, of the offering,
and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register the sale of such number of shares of Registrable
Securities as such holders may request in writing within five days
following receipt of such notice (a “Piggy-Back Registration”). Paramount
shall cause such Registrable Securities to be included in such registration and
shall use its best efforts to cause the managing Underwriter or Underwriters of
a proposed underwritten offering to permit the Registrable Securities requested
to be included in a Piggy-Back Registration on the same terms and conditions as
any similar securities of Paramount and to permit the sale or other disposition
of such Registrable Securities in accordance with the intended methods of
distribution thereof. All holders of Registrable Securities proposing to
distribute their securities through a Piggy-Back Registration that involves an
Underwriter or Underwriters shall enter into an underwriting agreement in
customary form with the Underwriter or Underwriters selected for such
Piggy-Back Registration.


 


(b)                                 Reduction of Offering. If the managing Underwriter or
Underwriters for a Piggy-Back Registration that is to be an underwritten
offering advises Paramount and the holders of Registrable Securities in writing
that the dollar amount or number of shares of Common Stock that Paramount
desires to sell, taken together with shares of Common Stock, if any, as to
which registration has been demanded pursuant to written contractual
arrangements with persons other than the holders of Registrable Securities
hereunder, the Registrable Securities as to which registration has been
requested under this Section 2.2, and the shares of Common Stock, if any,
as to which registration has been requested pursuant to the written contractual
piggy-back registration rights of other stockholders of Paramount, exceeds the
Maximum Number of Shares, then Paramount shall include in any such
registration:


 


(i)                                     If
the registration is undertaken for Paramount’s account: (A) first, the
shares of Common Stock or other securities that Paramount desires to sell that
can be sold without exceeding the Maximum Number of Shares; (B) second, to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the shares of Common Stock or other securities, if any,
comprised of Registrable Securities, Option Securities and Other Registrable
Securities as to which registration has been requested pursuant to the
applicable written contractual piggy-back registration


 


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rights of such security
holders, Pro Rata, that can be sold without exceeding the Maximum Number of
Shares; and (C) third, to the extent that the Maximum Number of shares has
not been reached under the foregoing clauses (A) and (B), the shares of
Common Stock or other securities for the account of other persons that
Paramount is obligated to register pursuant to written contractual piggy-back
registration rights with such persons and that can be sold without exceeding
the Maximum Number of Shares;


 


(ii)                                  If
the registration is a “demand” registration undertaken at the demand of holders
of Option Securities or Other Registrable Securities, (A) first, the
shares of Common Stock or other securities for the account of the demanding
persons, Pro Rata, that can be sold without exceeding the Maximum Number of
Shares; (B) second, to the extent that the Maximum Number of Shares has
not been reached under the foregoing clause (A), the shares of Common Stock or
other securities that Paramount desires to sell that can be sold without
exceeding the Maximum Number of Shares; (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A) and
(B), the shares of Registrable Securities, Option Securities and Other
Registrable Securities, Pro Rata, as to which registration has been requested,
that can be sold without exceeding the Maximum Number of Shares; and (D) fourth,
to the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A), (B) and (C), the shares of Common Stock or other
securities for the account of other persons that Paramount is obligated to
register pursuant to written contractual arrangements with such persons, that
can be sold without exceeding the Maximum Number of Shares; and


 


(iii)                               If
the registration is a “demand” registration undertaken at the demand of persons
other than either the holders of Registrable Securities, Other Registrable
Securities or of Option Securities, (A) first, the shares of Common Stock
or other securities for the account of the demanding persons that can be sold
without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (A), the shares of Common Stock or other securities that Paramount
desires to sell that can be sold without exceeding the Maximum Number of
Shares; (C) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (A) and (B), collectively the
shares of Common Stock or other securities comprised of Registrable Securities,
Other Registrable Securities and Option Securities, Pro Rata, as to which
registration has been requested pursuant to the terms hereof and of the Unit
Purchase Option, as applicable, that can be sold without exceeding the Maximum
Number of Shares; and (D) fourth, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clauses (A), (B) and (C),
the shares of Common Stock or other securities for the account of other persons
that Paramount is obligated to register pursuant to written contractual
arrangements with such persons, that can be sold without exceeding the Maximum
Number of Shares.


 


(c)                                  Withdrawal. Any holder of Registrable Securities may elect
to withdraw such holder’s request for inclusion of Registrable Securities in
any Piggy-Back Registration by giving written notice to Paramount of such
request to withdraw prior to the effectiveness of the Registration Statement. Paramount
(whether on its own determination or as the result of a


 


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withdrawal by
persons making a demand pursuant to written contractual obligations) may withdraw
a registration statement at any time prior to the effectiveness of the
Registration Statement. Notwithstanding any such withdrawal, Paramount shall
pay all expenses incurred by the holders of Registrable Securities in
connection with such Piggy-Back Registration as provided in Section 3.3.


 


Section 2.3                                      Registrations
on Form S-3. The holders of Registrable Securities may at any
time and from time to time following the Lock-Up Release Date, request in
writing that Paramount register the resale of any or all of such Registrable
Securities on Form S-3 or any similar short-form registration that may be
available at such time (“Form S-3”); provided, however, that Paramount shall not be obligated to effect
such request through an underwritten offering. Upon receipt of such written
request, Paramount will promptly give written notice of the proposed
registration to all other holders of Registrable Securities and to such other
persons to whom Paramount has granted Registration Rights, and, as soon as
practicable thereafter, effect the registration of all or such portion of such
holder’s or holders’ Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities or other
securities of Paramount, if any, of any other holder or holders joining in such
request as are specified in a written request given within 15 days after
receipt of such written notice from Paramount; provided,
however, that Paramount shall not be
obligated to effect any such registration pursuant to this Section 2.3: (i) if
Form S-3 is not available for such offering; or (ii) if the holders
of the Registrable Securities, together with the holders of any other
securities of Paramount entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at any aggregate
price to the public of less than $500,000. Registrations effected pursuant to
this Section 2.3 shall not be counted as Demand Registrations effected
pursuant to Section 2.1.


 


ARTICLE 3 

REGISTRATION PROCEDURES


 


Section 3.1                                      Filings;
Information. Whenever Paramount is required to effect the registration of
any Registrable Securities pursuant to Article 2, Paramount shall use its
best efforts to effect the registration and sale of such Registrable Securities
in accordance with the intended methods of distribution thereof as
expeditiously as practicable, and in connection with any such request:


 


(a)                                  Filing Registration Statement. Paramount shall, as
expeditiously as possible and in any event within 60 days after receipt of a
request for a Demand Registration pursuant to Section 2.1, prepare and
file with the Commission a Registration Statement on any form for which
Paramount then qualifies or that counsel for Paramount shall deem appropriate
and which form shall be available for the sale of all Registrable
Securities to be registered thereunder in accordance with the intended methods
of distribution thereof, and shall use its best efforts to cause such
Registration Statement to become and remain effective for the period required
by Section 3.1(c); provided, however, that Paramount shall have the right to defer any
Demand Registration for up to 30 days, and any Piggy-Back Registration for such
period as may be applicable to deferment of any demand registration to
which such Piggy-Back Registration relates, in each case if Paramount shall
furnish to the holders a certificate signed by the Chief Executive Officer or
President of Paramount stating that, in the good faith judgment of the Board 


 


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of Directors
of Paramount, it would be materially detrimental to Paramount and its
stockholders for such Registration Statement to be effected at such time; provided  further that
Paramount shall not have the right to exercise the right set forth in the
immediately preceding proviso more than once in any 365-day period in respect
of a Demand Registration hereunder.


 


(b)                                 Copies. Paramount shall, prior to filing a Registration
Statement or prospectus, or any amendment or supplement thereto, furnish
without charge to the holders of Registrable Securities included in such
registration, and such holders’ legal counsel, copies of such Registration
Statement as proposed to be filed, each amendment and supplement to such
Registration Statement (in each case including all exhibits thereto and
documents incorporated by reference therein), the prospectus included in such
Registration Statement (including each preliminary prospectus), and such other
documents as the holders of Registrable Securities included in such
registration or legal counsel for any such holders may request in order to
facilitate the disposition of the Registrable Securities owned by such holders.


 


(c)                                  Amendments and Supplements. Paramount shall prepare and file
with the Commission such amendments, including post-effective amendments, and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and in compliance with the provisions of the Securities Act
until all Registrable Securities and other securities covered by such
Registration Statement have been disposed of in accordance with the intended
methods of distribution set forth in such Registration Statement (which period
shall not exceed the sum of 180 days plus any period during which any such
disposition is interfered with by any stop order or injunction of the
Commission or any governmental agency or court) or such securities have been
withdrawn.


 


(d)                                 Notification. After the filing of a Registration Statement,
Paramount shall promptly, and in no event more than two Business Days after
such filing, notify the holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within two Business
Days of the occurrence of any of the following: (i) when such Registration
Statement becomes effective; (ii) when any post-effective amendment to
such Registration Statement becomes effective; (iii) the issuance or
threatened issuance by the Commission of any stop order (and Paramount shall
take all actions required to prevent the entry of such stop order or to remove
it if entered); and (iv) any request by the Commission for any amendment
or supplement to such Registration Statement or any prospectus relating thereto
or for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
promptly make available to the holders of Registrable Securities included in
such Registration Statement any such supplement or amendment; except that
before filing with the Commission a Registration Statement or prospectus or any
amendment or supplement thereto, including documents incorporated by reference,
Paramount shall furnish to the holders of Registrable Securities included in
such Registration Statement and to the legal counsel for any such holders, copies
of all such documents proposed to be filed sufficiently in advance of filing to
provide such holders and legal counsel with a reasonable opportunity to review
such documents and comment thereon, and Paramount shall not file any
Registration 


 


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Statement or
prospectus or amendment or supplement thereto, including documents incorporated
by reference, to which such holders or their legal counsel shall object.


 


(e)                                  State Securities Laws Compliance. Paramount shall use its
best efforts to (i) register or qualify the Registrable Securities covered
by the Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) take such action necessary to
cause such Registrable Securities covered by the Registration Statement to be
registered with or approved by such other Governmental Authorities as may be
necessary by virtue of the business and operations of Paramount and do any and
all other acts and things that may be necessary or advisable to enable the
holders of Registrable Securities included in such Registration Statement to
consummate the disposition of such Registrable Securities in such
jurisdictions; provided, however,
that Paramount shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph or subject itself to taxation in any such jurisdiction.


 


(f)                                    Agreements for Disposition. Paramount shall enter into
customary agreements (including, if applicable, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of such Registrable Securities. The
representations, warranties and covenants of Paramount in any underwriting
agreement that are made to or for the benefit of any Underwriters, to the
extent applicable, shall also be made to and for the benefit of the holders of
Registrable Securities included in such registration statement. No holder of
Registrable Securities included in such registration statement shall be
required to make any representations or warranties in the underwriting
agreement except, if applicable, with respect to such holder’s organization,
good standing, authority, title to Registrable Securities, lack of conflict of
such sale with such holder’s material agreements and organizational documents,
and with respect to written information relating to such holder that such
holder has furnished in writing expressly for inclusion in such Registration
Statement.


 


(g)                                 Cooperation. The principal executive officer of Paramount,
the principal financial officer of Paramount, the principal accounting officer
of Paramount and all other officers and members of the management of Paramount
shall cooperate fully in any offering of Registrable Securities hereunder,
which cooperation shall include, without limitation, the preparation of the
Registration Statement with respect to such offering and all other offering
materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.


 


(h)                                 Records. Paramount shall make available for inspection by
the holders of Registrable Securities included in such Registration Statement,
any Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
holder of Registrable Securities included in such Registration Statement or any
Underwriter, all financial and other records, pertinent corporate documents and
properties of Paramount, as shall be necessary to enable them to exercise their
due diligence responsibility, and cause Paramount’s officers, directors and
employees to supply all information requested by any of them in connection with
such Registration Statement.


 


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(i)                                     Opinions and Comfort Letters. Paramount shall furnish to
each holder of Registrable Securities included in any Registration Statement a
signed counterpart, addressed to such holder, of (i) any opinion of
counsel to Paramount delivered to any Underwriter and (ii) any comfort
letter from Paramount’s independent public accountants delivered to any
Underwriter. In the event no legal opinion is delivered to any Underwriter,
Paramount shall furnish to each holder of Registrable Securities included in
such Registration Statement, at any time that such holder elects to use a
prospectus, an opinion of counsel to Paramount to the effect that the
Registration Statement containing such prospectus has been declared effective
and that no stop order is in effect.


 


(j)                                     Earnings Statement. Paramount shall comply with all
applicable rules and regulations of the Commission and the Securities Act,
and make available to its stockholders, as soon as practicable, an earnings
statement covering a period of 12 months, beginning within three months after
the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder.


 


(k)                                  Listing. Paramount shall use its best efforts to cause all
Registrable Securities included in any registration to be listed on such
exchanges or otherwise designated for trading in the same manner as similar
securities issued by Paramount are then listed or designated or, if no such
similar securities are then listed or designated, in a manner satisfactory to
the holders of a majority of the Registrable Securities included in such
registration.


 


(l)                                     Stop Orders. Paramount shall use its reasonable best efforts
to prevent the issuance of any order suspending the effectiveness of a
registration statement, and if one is issued immediately notify each selling
holder of the receipt of such notice and use its reasonable best efforts to
obtain the withdrawal of any order suspending the effectiveness of a
registration statement at the earliest possible moment.


 


(m)                               Incorporate. Paramount shall if requested by the Underwriter,
any selling holder, or such selling holder’s counsel, promptly incorporate in a
prospectus supplement or post-effective amendment such information as such
person reasonably requests to be included therein with respect to the selling
holder or the securities being sold, including, without limitation, with
respect to the securities being sold by such selling holder to such underwriter
or underwriters, the purchase price being paid therefor by such Underwriter or
Underwriters and with respect to any other terms of an underwritten offering of
the securities to be sold in such offering, and promptly make all required
filings of such prospectus supplement or post-effective amendment.


 


Section 3.2                                      Obligation to
Suspend Distribution. Upon receipt of any notice from Paramount of the
happening of any event of the kind described in Section 3.1(d)(iv), or, in
the case of a resale registration on Form S-3 pursuant to Section 2.3
hereof, upon any suspension by Paramount, pursuant to a written insider trading
compliance program adopted by Paramount’s Board of Directors, of the ability of
all “insiders” covered by such program to transact in Paramount’s securities
because of the existence of material non-public information, each holder of
Registrable Securities included in any registration shall immediately
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such holder
receives the supplemented or amended prospectus contemplated by


 


10





















 


Section 3.1(d)(iv) or,
if such holder is an “insider,” the restriction on the ability of “insiders” to
transact in Paramount’s securities is removed, as applicable, and, if so
directed by Paramount, each such holder will deliver to Paramount all copies,
other than permanent file copies then in such holder’s possession, of the most
recent prospectus covering such Registrable Securities at the time of receipt
of such notice.


 


Section 3.3                                      Registration
Expenses. Paramount shall bear all costs and expenses incurred in
connection with any Demand Registration pursuant to Section 2.1, any
Piggy-Back Registration pursuant to Section 2.2, and any registration on Form S-3
effected pursuant to Section 2.3, and all expenses incurred in performing
or complying with its other obligations under this Agreement, whether or not
the Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities); (iii) printing
expenses; (iv) Paramount’s internal expenses (including, without
limitation, all salaries and expenses of its officers and employees); (v) the
fees and expenses incurred in connection with the listing of the Registrable
Securities as required by Section 3.1(k); (vi) National Association
of Securities Dealers, Inc. fees; (vii) fees and disbursements of
counsel for Paramount and fees and expenses for independent certified public
accountants retained by Paramount (including the expenses or costs associated
with the delivery of any opinions or comfort letters requested pursuant to Section 3.1(i));
(viii) the fees and expenses of any special experts retained by Paramount
in connection with such registration and (ix) the fees and expenses of one
legal counsel selected by the holders of a majority-in-interest of the
Registrable Securities included in such registration. Paramount shall have no
obligation to pay any underwriting discounts or selling commissions
attributable to the Registrable Securities being sold by the holders thereof,
which underwriting discounts or selling commissions shall be borne by such
holders. Additionally, in an underwritten offering, all selling stockholders
and Paramount shall bear the expenses of the Underwriter pro rata in proportion
to the respective amount of shares each is selling in such offering.


 


Section 3.4                                      Information.
The holders of Registrable Securities shall provide such information as may reasonably
be requested by Paramount, or the managing Underwriter, if any, in connection
with the preparation of any Registration Statement, including amendments and
supplements thereto, in order to effect the registration of any Registrable
Securities under the Securities Act pursuant to Section 2 and in
connection with Paramount’s obligation to comply with federal and applicable
state securities laws.


 


ARTICLE 4 

INDEMNIFICATION AND CONTRIBUTION


 


Section 4.1                                      Indemnification
by Paramount. Paramount agrees to indemnify and hold harmless each Seller and
each other holder of Registrable Securities, if any, and each of its and their
respective officers, employees, affiliates, directors, partners, members,
attorneys and agents, and each person, if any, who controls a Seller and each other
holder of Registrable Securities (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) (each, a “ChemRx Indemnified
Party”), from and against any expenses, losses, judgments, claims,
damages or liabilities, whether joint or several, arising out of or based upon
any untrue 


 


11





















 


statement (or
allegedly untrue statement) of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arising out of or based upon any
omission (or alleged omission) to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by Paramount of the Securities Act or any rule or regulation
promulgated thereunder applicable to Paramount and relating to action or
inaction required of Paramount in connection with any such registration; and
Paramount shall promptly reimburse the ChemRx Indemnified Party for any legal
and any other expenses reasonably incurred by such ChemRx Indemnified Party in
connection with investigating and defending any such expense, loss, judgment,
claim, damage, liability or action; provided, however, that Paramount will not be liable in any such case
to the extent that any such expense, loss, claim, damage or liability arises
out of or is based upon any untrue statement or allegedly untrue statement or
omission or alleged omission made in such Registration Statement, preliminary
prospectus, final prospectus, or summary prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished to
Paramount, in writing, by such selling holder expressly for use therein. Paramount
also shall indemnify any Underwriter of Registrable Securities, their officers,
affiliates, directors, partners, members and agents and each person who
controls such Underwriter on substantially the same basis as that of the
indemnification provided above in this Section 4.1.


 


Section 4.2                                      Indemnification
by Holders of Registrable Securities. Each selling holder of Registrable
Securities will, in the event that any registration is being effected under the
Securities Act pursuant to this Agreement of any Registrable Securities held by
such selling holder, indemnify and hold harmless Paramount and its directors
and officers and each Underwriter (if any), and each other selling holder and
each other person, if any, who controls another selling holder or such
underwriter within the meaning of the Securities Act, against any losses,
claims, judgments, damages or liabilities, whether joint or several, to the
extent such losses, claims, judgments, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
allegedly untrue statement of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or the alleged omission to state a material fact required to be stated
therein or necessary to make the statement therein not misleading, if the
statement or omission was made in reliance upon and in conformity with information
furnished in writing to Paramount by such selling holder expressly for use
therein, and shall reimburse Paramount, its directors and officers, and each
other selling holder or controlling person for any legal or other expenses
reasonably incurred by any of them in connection with investigation or
defending any such loss, claim, damage, liability or action. Each selling
holder’s indemnification obligations hereunder shall be several and not joint and
shall be limited to the amount of any net proceeds actually received by such
selling holder.


 


Section 4.3                                      Conduct of
Indemnification Proceedings. Promptly after receipt by any person of any
notice of any loss, claim, damage or liability or any action in respect of
which indemnity may be sought pursuant to Section 4.1 or 4.2, such
person (the “Indemnified
Party”) shall, if a claim in respect thereof is to be made against
any other person for


 


12





















 


indemnification
hereunder, notify such other person (the “Indemnifying Party”) in writing
of the loss, claim, judgment, damage, liability or action; provided,
however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability that the Indemnifying Party may have
to such Indemnified Party hereunder, except and solely to the extent the
Indemnifying Party is actually prejudiced by such failure. If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof
with counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control
of the defense of such claim or action, the Indemnifying Party shall not be
liable to the Indemnified Party for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that in any action in which both the Indemnified
Party and the Indemnifying Party are named as defendants, the Indemnified Party
shall have the right to employ separate counsel (but no more than one such
separate counsel) to represent the Indemnified Party and its controlling
persons who may be subject to liability arising out of any claim in respect
of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, with the fees and expenses of such counsel to be paid by
such Indemnifying Party if, based upon the written opinion of counsel of such
Indemnified Party, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, consent to entry of judgment or effect any settlement of any claim or
pending or threatened proceeding in respect of which the Indemnified Party is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such judgment or settlement includes an unconditional
release of such Indemnified Party from all liability arising out of such claim
or proceeding.


 


Section 4.4                                      Contribution.
(a) If the indemnification provided for in the foregoing Sections 4.1, 4.2
and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim,
damage, liability or action referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage, liability or action in such proportion as is appropriate to
reflect the relative fault of the Indemnified Parties and the Indemnifying
Parties in connection with the actions or omissions that resulted in such loss,
claim, damage, liability or action, as well as any other relevant equitable
considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.


 


(b)                                 The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro rata allocation or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding Section.


 


13





















 


(c)                                  The
amount paid or payable by an Indemnified Party as a result of any loss, claim,
damage, liability or action referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4.4, no holder of Registrable Securities shall
be required to contribute any amount in excess of the dollar amount of the net
proceeds (after payment of any underwriting fees, discounts, commissions or
taxes) actually received by such holder from the sale of Registrable Securities
that gave rise to such contribution obligation. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.


 


ARTICLE 5 

UNDERWRITING AND DISTRIBUTION


 


Section 5.1                                      Rule 144.
Paramount covenants that it shall file any reports required to be filed by it
under the Securities Act and the Exchange Act and shall take such further
action as the holders of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities
Act, as such Rules may be amended from time to time, or any similar Rule or
regulation hereafter adopted by the Commission.


 


ARTICLE 6 

MISCELLANEOUS


 


Section 6.1                                      Other
Registration Rights. Paramount represents and warrants that (a) except
with respect to the Option Securities and the Other Registrable Securities or
as disclosed in the Paramount SEC Documents, no person, other than a holder of
the Registrable Securities, has any right to require Paramount to register any
shares of Paramount’s capital stock for sale or to include shares of Paramount’s
capital stock in any registration filed by Paramount for the sale of shares of
capital stock for its own account or for the account of any other person, and (b) the
obligations of Paramount under this agreement, and the performance thereof by
Paramount, do not conflict with or result in a breach or other violation of any
other contract, agreement, commitment or undertaking of Paramount.


 


Section 6.2                                      Assignment; No
Third Party Beneficiaries. This Agreement and the rights, duties and
obligations of Paramount hereunder may not be assigned or delegated by
Paramount in whole or in part. This Agreement and the rights, duties and
obligations of the holders of Registrable Securities hereunder may be
freely assigned or delegated by such holder of Registrable Securities in
conjunction with and to the extent of any transfer of the Registrable
Securities held by any such holder; provided that
such transfer is made in accordance with the terms of the Stock Purchase
Agreement, the Voting Agreement (as defined in the Stock Purchase Agreement)
and applicable Law. This Agreement and the provisions hereof shall be binding
upon and shall inure to the benefit of each of the parties and their respective
successors and the permitted assigns. This Agreement is not intended to confer
any rights or benefits on any persons that are not party hereto other than as
expressly set forth in Article 4 and this Section 6.2.


 


14





















 


Section 6.3                                      Notices.
All notices, requests, claims, demands, waivers and other communications under
this Agreement shall be in writing and shall be by facsimile, courier services
or personal delivery to the following addresses, or to such other addresses as
shall be designated from time to time by a party in accordance with this Section 6.3:


 


if to Paramount:


 


Paramount Acquisition Corp.

787 7th Avenue

48th Floor

New York, NY 10019

Attention: J. Jay Lobell

Facsimile: (212) 580-0801


 


with a copy to:


 


Covington & Burling LLP

The New York Times Building


620 Eighth Avenue

New York, New York 10018

Attention: Stephen A. Infante

Facsimile: (212) 841-1010


 


if to a Seller:


 


The addresses set forth on Exhibit A
hereto


 


with a copy to:


 


Troutman
Sanders LLP


The Chrysler
Building


405 Lexington
Avenue


New York, NY


Facsimile:
(212) 704-5984 and (212) 704-5948


Attention:
Richard Ackerman, Esq. and Timothy I. Kahler, Esq.


 


All notices and communications under this Agreement shall be deemed to
have been duly given (x) when delivered by hand, if personally delivered, (y)
one Business Day after when delivered to a courier, if delivered by commercial
one-day overnight courier service or (z) when sent, if sent by facsimile, with an
acknowledgment of sending being produced by the sending facsimile machine.


 


Section 6.4                                      Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule or Law, or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such determination that any term or other 


 


15





















 


provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties hereto as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.


 


Section 6.5                                      Entire
Agreement. This Agreement, including the annexes hereto and the other
agreements and documents referenced herein or contemplated hereby (including
the Transaction Agreements), constitutes the entire agreement and understanding
of the parties hereto with respect to the matters herein set forth, and all
prior negotiations and understandings relating to the subject matter of this
Agreement are merged herein and are superseded and canceled by this Agreement.


 


Section 6.6                                      Counterparts.
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties hereto and
delivered to the other parties hereto.


 


Section 6.7                                      Amendments;
Waiver. Amendments to this Agreement may be made from time to time, provided, however, that
no amendment, modification or waiver of this Agreement or any provision hereof
shall be valid or effective unless in writing and signed by the parties hereto.
No consent to, or waiver, discharge or release (each, a “Waiver”)
of, any provision of or breach under this Agreement shall be valid or effective
unless in writing and signed by the party giving such Waiver, and no specific
Waiver shall constitute a Waiver with respect to any other provision or breach,
whether or not of similar nature. Failure on the part of any party hereto
to insist in any instance upon strict, complete and timely performance by
another party hereto of any provision of or obligation under this Agreement
shall not constitute a Waiver by such party of any of its rights under this
Agreement or otherwise.


 


Section 6.8                                      Governing Law;
Jurisdiction; Venue; Service Of Process; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof. Each party hereto
irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court
of the State of New York, New York County and (b) the United States District
Court for the Southern District of New York for the purposes of any suit,
action or other proceeding arising out of this Agreement, any of the other
Transaction Agreements or any transaction contemplated hereby and thereby. Each
party agrees to commence any action, suit or proceeding relating hereto in the
United States District Court for the Southern District of New York or if such
suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each party further agrees that service of any process, summons, notice
or document in any of the manners set forth in Section 6.3 shall be
effective service of process for any action, suit or proceeding in New York
with respect to any matters to which it has submitted to jurisdiction in this Section 6.8.
Each party irrevocably and unconditionally waives any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement, the
other Transaction Agreements and the transactions contemplated hereby or
thereby in (i) the Supreme Court of the State of New York, New York County
or (ii) the United States District Court for the Southern District of New
York, and hereby further irrevocably and unconditionally 


 


16





















 


waives, and
shall not assert by way of motion, defense, or otherwise, in any such Legal
Proceeding, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from attachment
or execution, that the Legal Proceeding is brought in an inconvenient forum,
that the venue of the Legal Proceeding is improper, or that this Agreement may not
be enforced in or by any of the above-named courts. Each Party irrevocably and
unconditionally waives any right to trial by jury with respect to any Legal
Proceeding relating to or arising out of this Agreement or any of the
transactions contemplated hereby.


 


Section 6.9                                      Remedies
Cumulative. In the event that Paramount fails to observe or perform any
covenant or agreement to be observed or performed under this Agreement, each
Seller or any other holder of Registrable Securities may proceed to
protect and enforce its rights by suit in equity or action at law, whether for
specific performance of any term contained in this Agreement or for an
injunction against the breach of any such term or in aid of the exercise of any
power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions, without being required to
post a bond. None of the rights, powers or remedies conferred under this
Agreement shall be mutually exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy,
whether conferred by this Agreement or now or hereafter available at law, in
equity, by statute or otherwise.


 


[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]


 


17

















 


IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed and delivered by their duly authorized representatives
as of the date first written above.


 


	
   

  	
  PARAMOUNT
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  J. Jay Lobell

  
	
   

  	
  Name: J. Jay
  Lobell

  
	
   

  	
  Title:  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
    /s/
  Jerry Silva

  
	
   

  	
  JERRY SILVA

  
	
   

  	
   

  
	
   

  	
    /s/
  Steven Silva

  
	
   

  	
  STEVEN SILVA

  
	
   

  	
   

  
	
   

  	
  JERRY SILVA,
  AS LIFE TENANT,

  
	
   

  	
  AND STEVEN
  SILVA, AS REMAINDERMAN

  
	
   

  	
   

  
	
   

  	
    /s/
  Jerry Silva

  
	
   

  	
  Jerry Silva

  
	
   

  	
   

  
	
   

  	
    /s/
  Steven Silva

  
	
   

  	
  Steven Silva

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE JODY R.
  SILVA TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rosalie
  Silva

  
	
   

  	
  Name:
  Rosalie Silva

  
	
   

  	
  Title:  Trustee

  
	
   

  	
   

  
	
   

  	
  THE JERRY
  SILVA 2007 ANNUITY TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Steven Silva

  
	
   

  	
  Name: Steven
  Silva

  
	
   

  	
  Title:
  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Jerry Silva

  
	
   

  	
  Name: Jerry
  Silva

  
	
   

  	
  Title:
  Trustee

  



 


 


[SIGNATURE PAGE TO REGISTRATION RIGHTS
AGREEMENT]


 

















 


EXHIBIT A


 


List of Sellers
and Addresses


 


 


Jerry Silva


 


Steven Silva


 


Jerry Silva, As Life Tenant,
   and Steven Silva, As Remainderman


 


The Jody R. Silva Trust


 


The Jerry Silva 2007 Annuity
Trust


 


Address for
notices:


c/o Chem Rx Corporation


750 Park Place


Long Beach, NY 11561