STOCK ESCROW AGREEMENT

          STOCK ESCROW AGREEMENT, dated as of _________, 2005 ("Agreement"), by
and among PARAMOUNT ACQUISITION CORP., a Delaware corporation ("Company"),
LINDSAY A. ROSENWALD, LINDSAY A. ROSENWALD 2000 FAMILY TRUSTS, J. JAY LOBELL, I.
KEITH MAHER, MICHAEL WEISER, ARIE BELLDEGRUN and ISAAC KIER (collectively
"Initial Stockholders") and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New
York corporation ("Escrow Agent").

          WHEREAS, the Company has entered into an Underwriting Agreement, dated
_____________, 2005 ("Underwriting Agreement"), with EarlyBirdCapital, Inc.
("EBC") acting as representative of the several underwriters (collectively, the
"Underwriters"), pursuant to which, among other matters, the Underwriters have
agreed to purchase 8,500,000 units ("Units") of the Company. Each Unit consists
of one share of the Company's common stock, par value $.0001 per share ("Common
Stock"), and two Warrants, each Warrant to purchase one share of Common Stock,
all as more fully described in the Company's final Prospectus, dated
_____________, 2005 ("Prospectus") comprising part of the Company's Registration
Statement on Form S-1 (File No. 333-_______) under the Securities Act of 1933,
as amended ("Registration Statement"), declared effective on _____________, 2005
("Effective Date").

          WHEREAS, the Initial Stockholders have agreed as a condition of the
sale of the Units to deposit their shares of Common Stock of the Company, as set
forth opposite their respective names in Exhibit A attached hereto (collectively
"Escrow Shares"), in escrow as hereinafter provided.

          WHEREAS, the Company and the Initial Stockholders desire that the
Escrow Agent accept the Escrow Shares, in escrow, to be held and disbursed as
hereinafter provided.

          IT IS AGREED:

     1. Appointment of Escrow Agent. The Company and the Initial Stockholders
hereby appoint the Escrow Agent to act in accordance with and subject to the
terms of this Agreement and the Escrow Agent hereby accepts such appointment and
agrees to act in accordance with and subject to such terms.

     2. Deposit of Escrow Shares. On or before the Effective Date, each of the
Initial Stockholders shall deliver to the Escrow Agent certificates representing
his respective Escrow Shares, to be held and disbursed subject to the terms and
conditions of this Agreement. Each Initial Stockholder acknowledges that the
certificate representing his Escrow Shares is legended to reflect the deposit of
such Escrow Shares under this Agreement.

     3. Disbursement of the Escrow Shares. The Escrow Agent shall hold the
Escrow Shares until the third anniversary of the Effective Date ("Escrow
Period"), on which date it shall, upon written instructions from each Initial
Stockholder, disburse each of the Initial Stockholder's Escrow Shares (and any
applicable stock power) to such Initial Stockholder; provided, however, that if
the Escrow Agent is notified by the Company pursuant to Section 6.7 hereof that
the Company is being liquidated at any time during the Escrow Period, then the
Escrow Agent shall promptly destroy the certificates representing the Escrow
Shares; provided further, however, that if, after the Company consummates a
Business Combination (as such term is defined in the Registration Statement), it
(or the surviving entity) subsequently consummates a liquidation,



merger, stock exchange or other similar transaction which results in all of the
stockholders of such entity having the right to exchange their shares of Common
Stock for cash, securities or other property, then the Escrow Agent will, upon
receipt of a certificate, executed by the Chief Executive Officer or Chief
Financial Officer of the Company, in form reasonably acceptable to the Escrow
Agent, that such transaction is then being consummated, release the Escrow
Shares to the Initial Stockholders upon consummation of the transaction so that
they can similarly participate. The Escrow Agent shall have no further duties
hereunder after the disbursement or destruction of the Escrow Shares in
accordance with this Section 3.

     4. Rights of Initial Stockholders in Escrow Shares.

          4.1 Voting Rights as a Stockholder. Subject to the terms of the
Insider Letter described in Section 4.4 hereof and except as herein provided,
the Initial Stockholders shall retain all of their rights as stockholders of the
Company during the Escrow Period, including, without limitation, the right to
vote such shares.

          4.2 Dividends and Other Distributions in Respect of the Escrow Shares.
During the Escrow Period, all dividends payable in cash with respect to the
Escrow Shares shall be paid to the Initial Stockholders, but all dividends
payable in stock or other non-cash property ("Non-Cash Dividends") shall be
delivered to the Escrow Agent to hold in accordance with the terms hereof. As
used herein, the term "Escrow Shares" shall be deemed to include the Non-Cash
Dividends distributed thereon, if any.

          4.3 Restrictions on Transfer. During the Escrow Period, no sale,
transfer or other disposition may be made of any or all of the Escrow Shares
except (i) by gift to a member of Initial Stockholder's immediate family or to a
trust, the beneficiary of which is an Initial Stockholder or a member of an
Initial Stockholder's immediate family, (ii) by virtue of the laws of descent
and distribution upon death of any Initial Stockholder, or (iii) pursuant to a
qualified domestic relations order; provided, however, that such permissive
transfers may be implemented only upon the respective transferee's written
agreement to be bound by the terms and conditions of this Agreement and of the
Insider Letter signed by the Initial Stockholder transferring the Escrow Shares.

          4.4 Insider Letters. Each of the Initial Stockholders has executed a
letter agreement with EBC and the Company, dated as indicated on Exhibit A
hereto, and which is filed as an exhibit to the Registration Statement ("Insider
Letter"), respecting the rights and obligations of such Initial Stockholder in
certain events, including but not limited to the liquidation of the Company.

     5. Concerning the Escrow Agent.

          5.1 Good Faith Reliance. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith and in the exercise of its own best
judgment, and may rely conclusively and shall be protected in acting upon any
order, notice, demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent), statement, instrument, report or other
paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which is believed by the Escrow Agent to be
genuine and to be signed or presented by the proper person or persons. The
Escrow Agent shall not be bound by any notice or demand, or any waiver,


                                        2



modification, termination or rescission of this Agreement unless evidenced by a
writing delivered to the Escrow Agent signed by the proper party or parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall have
given its prior written consent thereto.

          5.2 Indemnification. The Escrow Agent shall be indemnified and held
harmless by the Company from and against any expenses, including counsel fees
and disbursements, or loss suffered by the Escrow Agent in connection with any
action, suit or other proceeding involving any claim which in any way, directly
or indirectly, arises out of or relates to this Agreement, the services of the
Escrow Agent hereunder, or the Escrow Shares held by it hereunder, other than
expenses or losses arising from the gross negligence or willful misconduct of
the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of
any demand or claim or the commencement of any action, suit or proceeding, the
Escrow Agent shall notify the other parties hereto in writing. In the event of
the receipt of such notice, the Escrow Agent, in its sole discretion, may
commence an action in the nature of interpleader in an appropriate court to
determine ownership or disposition of the Escrow Shares or it may deposit the
Escrow Shares with the clerk of any appropriate court or it may retain the
Escrow Shares pending receipt of a final, non-appealable order of a court having
jurisdiction over all of the parties hereto directing to whom and under what
circumstances the Escrow Shares are to be disbursed and delivered. The
provisions of this Section 5.2 shall survive in the event the Escrow Agent
resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

          5.3 Compensation. The Escrow Agent shall be entitled to reasonable
compensation from the Company for all services rendered by it hereunder. The
Escrow Agent shall also be entitled to reimbursement from the Company for all
expenses paid or incurred by it in the administration of its duties hereunder
including, but not limited to, all counsel, advisors' and agents' fees and
disbursements and all taxes or other governmental charges.

          5.4 Further Assurances. From time to time on and after the date
hereof, the Company and the Initial Stockholders shall deliver or cause to be
delivered to the Escrow Agent such further documents and instruments and shall
do or cause to be done such further acts as the Escrow Agent shall reasonably
request to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected in acting hereunder.

          5.5 Resignation. The Escrow Agent may resign at any time and be
discharged from its duties as escrow agent hereunder by its giving the other
parties hereto written notice and such resignation shall become effective as
hereinafter provided. Such resignation shall become effective at such time that
the Escrow Agent shall turn over to a successor escrow agent appointed by the
Company, the Escrow Shares held hereunder. If no new escrow agent is so
appointed within the 60 day period following the giving of such notice of
resignation, the Escrow Agent may deposit the Escrow Shares with any court it
reasonably deems appropriate.

          5.6 Discharge of Escrow Agent. The Escrow Agent shall resign and be
discharged from its duties as escrow agent hereunder if so requested in writing
at any time by the other parties hereto, jointly, provided, however, that such
resignation shall become effective only upon acceptance of appointment by a
successor escrow agent as provided in Section 5.5.


                                        3



          5.7 Liability. Notwithstanding anything herein to the contrary, the
Escrow Agent shall not be relieved from liability hereunder for its own gross
negligence or its own willful misconduct.

     6. Miscellaneous.

          6.1 Governing Law. This Agreement shall for all purposes be deemed to
be made under and shall be construed in accordance with the laws of the State of
New York, without giving effect to conflicts of law principles that would result
in the application of the substantive laws of another jurisdiction.

          6.2 Third Party Beneficiaries. Each of the Initial Stockholders hereby
acknowledges that the Underwriters are third party beneficiaries of this
Agreement and this Agreement may not be modified or changed without the prior
written consent of EBC.

          6.3 Entire Agreement. This Agreement contains the entire agreement of
the parties hereto with respect to the subject matter hereof and, except as
expressly provided herein, may not be changed or modified except by an
instrument in writing signed by the party to the charged.

          6.4 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation thereof.

          6.5 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the respective parties hereto and their legal representatives,
successors and assigns.

          6.6 Notices. Any notice or other communication required or which may
be given hereunder shall be in writing and either be delivered personally or be
mailed, certified or registered mail, or by private national courier service,
return receipt requested, postage prepaid, and shall be deemed given when so
delivered personally or, if mailed, two days after the date of mailing, as
follows:

          If to the Company, to:

               Paramount Acquisition Corp.
               787 7th Avenue, 48th Floor
               New York, New York 10019
               Attn: Chairman

          If to a Stockholder, to his address set forth in Exhibit A.

          and if to the Escrow Agent, to:

               Continental Stock Transfer & Trust Company
               17 Battery Place
               New York, New York 10004
               Attn: Chairman

          A copy of any notice sent hereunder shall be sent to:


                                        4



               Greenberg Traurig, LLP
               Met Life Building
               200 Park Avenue
               New York, New York 1016
               Attn:

          and:

               EarlyBirdCapital, Inc.
               275 Madison Avenue, Suite 1203
               New York, New York 10016
               Attn: David M. Nussbaum, Chairman

          and:

               Graubard Miller
               The Chrysler Building
               405 Lexington Avenue
               New York, New York 10174
               Attn: David Alan Miller, Esq.

          The parties may change the persons and addresses to which the notices
or other communications are to be sent by giving written notice to any such
change in the manner provided herein for giving notice.

          6.7 Liquidation of the Company. The Company shall give the Escrow
Agent written notification of the liquidation and dissolution of the Company in
the event that the Company fails to consummate a Business Combination within the
time period(s) specified in the Prospectus.


                                        5



          WITNESS the execution of this Agreement as of the date first above
written.

                                                     PARAMOUNT ACQUISITION CORP.


                                                 By:
                                                     ---------------------------
                                                     J. Jay Lobell
                                                     Chief Executive Officer

                                                     INITIAL STOCKHOLDERS:


                                                     ---------------------------
                                                     Lindsay A. Rosenwald


                                                     LINDSAY A. ROSENWALD 2000
                                                     FAMILY TRUSTS


                                                 By:
                                                     ---------------------------
                                                     Name:
                                                     Title:


                                                     ---------------------------
                                                     J. Jay Lobell


                                                     ---------------------------
                                                     I. Keith Maher


                                                     ---------------------------
                                                     Michael Weiser


                                                     ---------------------------
                                                     Arie Belldegrun


                                        6




                                                     ---------------------------
                                                     Isaac Kier


                                                     CONTINENTAL STOCK TRANSFER
                                                        & TRUST COMPANY


                                                     By:
                                                         -----------------------
                                                         Name:
                                                         Title:


                                        7



                                    EXHIBIT A

<TABLE>

Name and Address of                         Number          Stock              Date of
Initial Stockholder                       of Shares   Certificate Number   Insider Letter
-------------------                       ---------   ------------------   --------------

Lindsay A. Rosenwald                       584,375             1           July 25, 2005
Paramount Acquisition Corp.
787 7th Avenue, 48th Floor
New York, New York 10019

Lindsay A. Rosenwald 2000 Family Trusts    584,375             2           July 25, 2005
c/o Lindsay A. Rosenwald
Paramount Acquisition Corp.
787 7th Avenue, 48th Floor
New York, New York 10019

J. Jay Lobell                              318,750             3           July 25, 2005
Paramount Acquisition Corp.
787 7th Avenue, 48th Floor
New York, New York 10019

I. Keith Maher                             318,750             4           July 25, 2005
Paramount Acquisition Corp.
787 7th Avenue, 48th Floor
New York, New York 10019

Michael Weiser                             106,250             5           July 25, 2005
Paramount Acquisition Corp.
787 7th Avenue, 48th Floor
New York, New York 10019

Arie Belldegrun                            106,250             6           July 25, 2005
10940 Wilshire Blvd., Suite 600
Los Angeles, California 90024

Isaac Kier                                 106,250             7           July 25, 2005
Coqui Capital Partners, L.P.
1775 Broadway, Suite 604
New York, New York 10019
</TABLE>