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PARAMOUNT ACQUISITION CORP.
  787 7th Avenue
  New York, NY 10019    
    

June 15,
2007 

Mr. Michael
Segal

c/o B.J.K. Inc.

750 Park Place

Long Beach, NY 11561 

Dear
Mr. Segal: 

        Paramount
Acquisition Corp., a Delaware corporation ("Paramount"), and B.J.K. Inc., a New York corporation d/b/a Chem Rx
("Chem Rx"), are parties to a Stock Purchase Agreement, dated as of June 1, 2007 (the "Purchase
Agreement"). Pursuant to the Purchase Agreement, Paramount will acquire 100% of the Capital Stock of Chem Rx and ChemRx New Jersey, LLC ("ChemRx
NJ"). This Employment Letter sets forth the terms and conditions of your employment with Paramount and its subsidiaries and affiliates from time to time, including, without
limitation, Chem Rx and ChemRx NJ (collectively, the "Group"). 

        1.    Employment.    Unless your employment is terminated in accordance with Section 6 below, you agree to be
employed, and Paramount agrees to employ you, during the period commencing upon the closing date of the transactions contemplated by the Purchase Agreement (the "Effective
Date") and ending on December 31, 2010. Such period is referred to as the "Term". The portion of the Term during which
you are actually employed by Paramount is referred to as the "Employment Period". Should the Purchase Agreement be terminated pursuant to
Section 10.1 thereof, this Employment Letter shall be null and void and of no further force and effect. Each party to this Employment Letter agrees that it has no claims, rights or obligations
against any other party by virtue of this Employment Letter unless and until the closing of the transactions contemplated by the Purchase Agreement occurs. 

        2.    Position; Duties.    

        (a)   You
will be employed by Paramount as its Vice President—New Jersey Operations. In such capacity, you will report to the Chief Executive Officer of Paramount,
and shall have such authority and perform such duties customary for a vice president of a Delaware corporation or as may be assigned by the Chief Executive Officer of Paramount consistent with your
position as Vice President—New Jersey Operations. You agree to comply with such lawful policies of Paramount as may be adopted from time to time. During the Employment Period, your
principal place of employment will be at the Group's facility in South Plainfield, New Jersey. 

        (b)   You
agree to use your best efforts, and devote substantially all of your working time, to perform such duties faithfully, and while you remain employed, not to engage in
any other business activity that is in conflict with your duties and obligations to the Group. 

        Notwithstanding
the foregoing, you may engage in the activities of (i) serving as an officer or director of, or otherwise participating in, non-profit educational,
welfare, social, religious and civil organizations, and (ii) managing personal and family investments, provided that such activities set forth in clauses (i) and (ii) do not
materially interfere with the performance and fulfillment of your duties and responsibilities hereunder. 

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        3.    Base Salary; Bonus.    

        (a)   During
the Employment Period, Paramount will pay you a base salary ("Base Salary") at an annual rate of $250,000, which
will be reviewed and subject to upward adjustment based on the recommendation of the Board of Directors of Paramount (the "Board of Directors") (or a
committee
thereof) and the review and approval of the members of the Board of Directors, and payable in accordance with Paramount's normal payroll practices. 

        (b)   For
each calendar year that ends during the Employment Period beginning with the 2008 calendar year, you will have the opportunity to earn a bonus (a
"Bonus") of up to $125,000. The amount of your Bonus, if any, for any calendar year, shall be determined in the sole discretion of the Board of
Directors or a committee thereof. Except as set forth in Section 6, to receive a Bonus, you must be employed on the last day of the calendar year for which a Bonus is awarded. Each Bonus shall
be paid 90 days after the end of the applicable calendar year. 

        4.    Benefits; Reimbursement of Expenses.    

        (a)    Benefits.    You shall participate in all medical, dental, pension and other benefit plans available to other
senior executives of Paramount generally, as the Board of Directors shall adopt consistent with industry practice as of the Effective Date or as soon thereafter as the Board of Directors may determine
in its reasonable discretion, provided that until such time as medical and dental insurance is in place, Paramount agrees to reimburse or pay on your behalf premiums for "COBRA" coverage to which you
may be entitled. Nothing in this Employment Letter shall restrict Paramount's ability to change or terminate any or all of its benefit plans and programs from time to time; nor shall anything in this
Employment Letter prevent any such change from affecting you. If you die during the Employment Period, Paramount will pay the COBRA premiums for the continuation of medical insurance coverage for your
spouse for a period of 12 months following the date of death or such shorter period as your spouse may be eligible for COBRA coverage (it being understood that to the extent such payment would
constitute a taxable benefit, Paramount may make applicable withholding with respect to such taxable benefit from any amounts otherwise payable to your estate upon your death). 

        (b)    Reimbursement of Expenses.    Paramount shall pay or reimburse you for all reasonable
out-of-pocket expenses incurred by you during the Employment Period. You shall submit proof of expenses (including, in the case of reimbursement, proof of payment) in
conformity with the regular policies and practices of Paramount for its executive employees, but in no event shall you be permitted to submit a claim for reimbursement more than three years after your
separation from service with the Group. 

        5.    Vacation.    You shall be entitled to such reasonable paid vacation time as may be compatible with your
positions with Paramount and determined by the Board of Directors from time to time, giving due regard to the preservation of your health and also to the reasonable scheduling needs of Paramount in
connection with your employment. 

        6.    Termination of Employment.    

        (a)    Death.    Your employment will terminate upon your death. Your beneficiaries will be entitled to (i) any
earned but unpaid Base Salary, (ii) any Bonus earned with respect to a completed period but not yet paid, (iii) unreimbursed business expenses submitted in accordance with
paragraph 4(b), and (iv) any amounts accrued and payable under the terms of any of the Group's benefit plans (collectively the "Accrued
Obligations"). In addition, your beneficiaries will be entitled to the Prorated Bonus. For purposes of this Employment Letter, "Prorated
Bonus" means the Bonus to which you would have been entitled had you remained employed until the end of the calendar year in which such termination occurs, multiplied by a
fraction, the numerator of which is the number of days that you were employed during such calendar year, and the 

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denominator
of which is 365. Any payments under this provision shall be made 30 days after the date of your death, except that payment of the Prorated Bonus, if any, shall be made
90 days after the end of the calendar year in which termination occurs and amounts payable under any of the Group's benefit plans shall be paid in accordance with the terms of such plans. 

        (b)    Disability.    Paramount may terminate your employment by reason of your Disability.
"Disability" means your inability to perform your essential job functions by reason of a physical or mental impairment for a period of 120 consecutive
days (or an aggregate of 180 days) within a period of 365 consecutive days as determined by an independent physician reasonably approved by you (or your representative) and Paramount. Upon such
termination, you will be entitled to the Accrued Obligations and the Prorated Bonus. Any payments to you under this provision shall be made 30 days after the date on which your employment is
terminated, except that payment of the Prorated Bonus, if any, shall be made 90 days after the end of the calendar year in which termination occurs and amounts payable under any of the Group's
benefit plans shall be paid in accordance with the terms of such plans. Payment of the Prorated Bonus shall be conditional upon your continuing compliance, other than any isolated, insubstantial and
inadvertent failure to comply that is not in bad faith, with the restrictive covenants contained in Section 7, as well as your execution, delivery and nonrevocation of release of claims in
favor of Paramount, in substantially the form attached as Exhibit A (the "Release"). If you fail to comply with the restrictive covenants set
forth in Section 7 or to timely deliver the Release so that the Revocation Period (as such term is defined in the Release) has expired before the date that the Prorated Bonus would otherwise be
paid under this Section 6(b), you will not be entitled to receive the Prorated Bonus. 

        (c)    Termination for Cause.    Paramount may terminate your employment during the Term for Cause.
"Cause" means your (i) commission of an act that constitutes common law fraud or a felony, commission of any other crime involving moral
turpitude, or commission of any other tortious or unlawful act causing material harm to the business, standing or reputation of the Group without the good faith belief that such conduct was in the
best interests of Paramount, (ii) material breach of this Employment Letter, after Paramount has given you 10 days written notice and an opportunity to cure such breach to the extent
curable, (iii) your willful failure or refusal to perform your material duties or obligations under this Employment Letter, including, without limitation, willful refusal to abide by the
directions of the Board of Directors or any reasonable policy adopted by the Board of Directors, in each case after Paramount has given you 10 days written notice and an opportunity to cure
such failure or refusal to the extent curable, (iv) willful misconduct or gross negligence in the performance of your duties under this Employment Letter and (v) material
misappropriation or embezzlement of any
property of the Group. Paramount shall not characterize any termination of your employment as a termination for Cause unless (i) you are given written notice of the conduct that constitutes
Cause and (ii) you are given an opportunity to be heard before the Board of Directors with counsel of your choosing. If your employment is terminated for Cause, you will only be entitled to the
Accrued Obligations. 

        (d)    Termination by Paramount without Cause.    Paramount may terminate your employment during the Term for any or
no reason. If such termination is not by the Company for Cause or by reason of your death or Disability or if your employment is terminated without Cause upon expiration of the Term, then, in addition
to the Accrued Obligations, and in lieu of any other severance benefits otherwise payable under any Paramount policy or otherwise, subject to the limitations set forth below, the Company shall pay or
provide you: (1) an amount equal to the product of two multiplied by your annual Base Salary, payable over the one year period following termination of your employment in equal monthly
installments paid on the first of each month beginning with the second month following the date of termination; (2) the Prorated Bonus, which shall be paid on the 90th day after the end of the
year in which your termination occurs; and 

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(3) two
years of continued medical, dental and other benefits that may be in effect on the date of termination of your employment, provided that if Paramount's plans do not permit you to
participate on this basis, Paramount will provide such benefits outside of the plans and provided that if you become employed during this period and are eligible for comparable coverage from your new
employer, Paramount shall cease providing such benefits. Your right to the payments and benefits set forth in clauses (1) through (3) above (collectively the
"Severance Benefits") shall be conditional upon your continuing compliance, other than any insubstantial failure to comply that is not in bad faith,
with the restrictive covenants contained in Section 7, as well as your execution, delivery and nonrevocation of the Release. If you fail to comply with the restrictive covenants set forth in
Section 7 or to timely deliver the Release so that the Revocation Period (as such term is defined in the Release) has expired before the earliest date that the applicable Severance Benefits
would otherwise be paid under this Section 6(d), you will forfeit all Severance Benefits (including the provision of benefits under clause (3) above). If you are eligible for cash
payments under clause (1) and you are a "specified employee" under Section 409A of the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder (collectively,
the "Code"), any portion of the payments that either do not qualify under the "short-term deferral rule" or exceed two times the lesser of
(A) your "annualized compensation" for the calendar year preceding your termination of employment (in each case, as those terms are defined under Section 409A of the Code), or
(B) the maximum amount that may be taken into account under Section 401(a)(17) of the Code for the year in which you terminate employment, shall be delayed until the first day of the
seventh month following your termination of employment, or if earlier, your death. If you are eligible for cash payments under clauses (2) and/or (3), such payments shall be made at the times
as set forth above under clauses (2) and/or (3), respectively, except that, to the extent necessary to avoid adverse consequences to you under Section 409A of the Code, any such payments
shall be delayed, if later than the payment dates set forth in clauses (2) and (3) above, until the first day of the seventh month following your termination of employment, or if
earlier, your death. Furthermore, the Company shall not be required to make, and you shall not be required to receive, any severance or other payment or benefit under Section 6 hereof at such
time as the making of such payment or the provision of such benefit or the receipt thereof shall result in a tax to you arising under Section 409A of the Code. The parties agree that for
purposes of Code Section 409A and Treasury Regulation 1.409A-2(b)(2)(iii), amounts payable under clause (1) shall be treated as a right to a series of separate
payments. 

        (e)    Termination by You for Good Reason.    You may terminate your employment during the Term for Good Reason.
"Good Reason" means (i) any material breach by Paramount of its obligations under this Employment Letter, (ii) any material diminution of
your duties, reporting lines or authority or (iii) a relocation of your principal place of employment more than 50 miles from its location in South Plainfield, New Jersey as of the date hereof.
However, none of the foregoing events or conditions will constitute Good Reason unless (w) you provide the Company with a written objection of the event or condition within 30 days
following the initial existence of the condition, (x) Paramount does not reverse or otherwise cure the event or condition to the extent curable within 30 days of receiving that written
objection, (y) you resign your employment within 30 days following the expiration of that cure period, and (z) your termination of employment occurs within two years following the
initial existence of one or more of the conditions described in the previous sentence. If you terminate your employment for Good Reason, you shall be treated as if your employment were terminated by
Paramount without Cause during the Term pursuant to Section 6(d) above. Your right to such Severance Benefits shall be subject to the same conditions as set forth in Section 6(d)
regarding compliance with the restrictive covenants and execution, delivery and nonrevocation of the Release. 

        (f)    Termination by You without Good Reason.    You may terminate your employment during the Term for any or no
reason. If such termination is without Good Reason, you must first provide 

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Paramount
advance written notice of at least 90 days. Upon such termination, you will only be entitled to the Accrued Obligations. 

        7.    Restrictive Covenants.    

        (a)    Executive's Importance to the Group and the Effect of this Section 7.    You acknowledge that in the
course of your ownership and operation of ChemRx NJ and your involvement in the Group's activities, you have had and will continue to have access to Trade Secrets or other Confidential Information and
that you have profited and will continue to profit from the goodwill associated with the Group. In view of your access to the Trade Secrets or other Confidential Information and your importance to the
Group, if you compete with the Group either during or for a period of time following the Term, the Group will likely suffer significant harm. In return for the benefits you will receive from Paramount
under this Agreement and to induce Paramount to enter into this Employment Letter and the Purchase Agreement and consummate transactions contemplated thereby, and in light of the potential harm that
you could cause to the Group, you agree to the provisions of this Section 7. You also acknowledge that Paramount would not have entered into the Purchase Agreement or this Employment Letter, if
you did not agree to this Section 7. This Section 7 limits your ability to earn a livelihood in a Competitive Enterprise (as defined below). You acknowledge, however, that complying with
this Section 7 will not result in severe economic hardship for you or your family. 

        (b)    Non-Competition.    During the period commencing on the Effective Date and ending on the second
anniversary following the termination of your employment for any reason (whether during or upon expiration of the Term) (the "Restricted Period"), you
will not (except as an officer, director, stockholder, member, manager, employee, agent or consultant of Paramount) directly or indirectly, own, manage, operate, join, or have a financial interest in,
control or participate in the ownership, management, operation or control of, or be employed as an employee, agent or consultant, or in any other individual or representative capacity whatsoever, or
use or permit your name to be used in connection with, or be otherwise connected in any manner with any business or enterprise engaged in the institutional pharmacy business in any state in the United
States in which the Group is then engaged or planning to engage in the institutional pharmacy business (any such business or enterprise, a "Competitive
Enterprise"); provided that the foregoing restriction shall not be construed to prohibit the ownership by you together with your affiliates and associates, as the case may be,
of not more than two percent (2%) of any class of securities of any corporation that is engaged in any of the foregoing businesses, having a class of securities registered pursuant to the Securities
Exchange Act of 1934, as amended, which securities are publicly owned and regularly traded on any national exchange or in the over-the-counter market,  provided further, that such ownership represents a
passive investment and that you together with your affiliates and associates, either directly or
indirectly, do not manage or exercise control of any such corporation, guarantee any of its financial obligations, otherwise take part in its business other than exercising your rights as a
shareholder, or seek to do any of the foregoing; and provided further, that if any Severance Benefits due to you are not paid when due, your obligations under this paragraph 7(b) shall
terminate upon failure of the Company to cure such non-payment after thirty (30) days' prior written notice. Notwithstanding anything to the contrary in this Agreement or any other
document or instrument, except as expressly set forth in the preceding sentence, no breach or failure to perform on the part of the Paramount or any of its affiliates shall relieve you of your
obligations under this Section 7. 

        (c)    Non-Solicitation.    During the period commencing on the Effective Date and ending on the third
anniversary following the termination of your employment for any reason (whether during or upon expiration of the Term), you agree to refrain from (i) contacting any of the Group's clients or
customers, or any prospective client or customer that was or became known to you prior to or during your employment by the Group, for the purpose of soliciting such client or customer 

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to
transact business with a Competitive Enterprise or reduce or refrain from doing any business with the Group, (ii) transacting business with any such client or customer that would cause you
to be engaged in a Competitive Enterprise or to cause such client or customer to reduce or refrain from doing any business with the Group or (iii) interfering with or damaging any relationship
between the Group and any such client or customer. You further agree that during the Restricted Period, you shall not, directly or indirectly, (x) solicit or influence any individual who is an
employee or consultant of the Group or was an employee or consultant of the Group during the Employment Period or within 12 months before the date of termination of the Employment Period to
terminate his or her employment or consulting relationship with the Group or to apply for or accept employment with a Competitive Enterprise or (y) employ or retain any such individual. 

        (d)    Trade Secrets and Confidential Information.    You recognize that it is in the legitimate business interest of
Paramount to restrict your disclosure or use of Trade Secrets or other Confidential Information (as defined below) relating to the Group for any purpose other than in connection with your performance
of your duties to the Group, and to limit any potential appropriation of such Trade Secrets or other Confidential Information. You therefore agree that all Trade Secrets or other Confidential
Information relating to Paramount, Chem Rx or ChemRx NJ, or any of their respective subsidiaries or businesses heretofore or in the future obtained by you shall be considered confidential and
the proprietary information of Paramount. You shall not use or disclose, or authorize any other person or entity to use or disclose, any Trade Secrets or other Confidential Information. The term
"Trade Secrets or other Confidential Information" shall mean all secret, confidential or proprietary information (whether or not reduced to writing and
whether or not patentable or subject to protection by copyright and including, without limitation, any information conceived, originated, discovered or developed by you) about the Group and its
businesses, and its methods, processes, products and services, past, present or contemplated, including, without limitation: any and all information concerning strategies, sales, sales volume, sales
methods, sales proposals, pricing, customers and prospective customers, identity of key personnel in the employ of customers, customer lists, and prospective customers, trade secrets,
know-how, computer programs, system documentation, system hardware, product hardware, software systems, related software development, manuals, formulae, processes, methods, machines,
compositions, ideas, improvements, inventions, studies, policies, procedures or, information received by the Group from third parties in confidence and other confidential or proprietary information
belonging to the Group or relating to the affairs of the Group. Trade Secrets or other Confidential Information shall also include buying habits and preferences and other non-public
information concerning customers and prospective customers of the Group. Notwithstanding the foregoing, if you are compelled to disclose Trade Secrets or other Confidential Information by court order
or other legal process, to the extent permitted by applicable law, you shall promptly so notify the Group so that it may seek a protective order or other assurance that confidential treatment of such
Trade Secrets or other Confidential Information shall be afforded, and you shall reasonably cooperate with the Group in connection therewith. 

        (e)    Discoveries and Works.    All Discoveries and Works initiated, made or conceived by you, during your employment
by Paramount or any other member of the Group, whether alone or in conjunction with others and whether prior to or following the date hereof, that relate to the activities of the Group shall be owned
exclusively by Paramount, and you hereby assign to Paramount all right, title and interest you may have or acquire in all such Discoveries and Works. The term "Discoveries and
Works" includes, by way of example but without limitation, Trade Secrets or other Confidential Information, patents and patent applications, trademarks and trademark
registrations and applications, service marks and service mark registrations and applications, trade names, copyrights and copyright registrations and applications. You shall (a) promptly
notify and make full disclosure to Paramount of any Discoveries and Works, and execute and deliver any documents requested by Paramount to evidence or better assure title to 

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Discoveries
and Works in Paramount, as so requested, (b) renounce any and all claims, including but not limited to claims of ownership and royalty, with respect to all Discoveries and Works and
all other property owned or licensed by the Group, (c) assist Paramount in obtaining, maintaining and enforcing for itself at its own expense United States and foreign patents, copyrights,
trade secret protection or other protection of or rights in any and all Discoveries and Works and (d) promptly execute, whether during the Employment Period or thereafter, all applications or
other endorsements necessary or appropriate to maintain patents and other rights for Paramount and to protect the title of Paramount, including but not limited to assignments of such patents and other
rights. You acknowledge that all Discoveries and Works shall be deemed "works made for hire" under the Copyright Act of 1976, as amended, 17 U.S.C. § 101. 

        (f)    No Public Statements or Disparagement.    You agree that you will not make any public statements regarding your
employment or the termination of your employment (for whatever reason) that are not agreed to by Paramount. You agree that, except as required by applicable law or regulation, you will not knowingly
make any public statement that would libel, slander or disparage the Group or any of their respective past or present officers, directors, employees or agents. Paramount agrees that, except as
required by applicable law or regulation, it will not, and it will cause the other members of the Group not to, knowingly make any public statement that would libel, slander or disparage you.
Notwithstanding this Section, nothing contained herein shall limit or impair your or the Group's ability to provide truthful testimony in response to any validly issued subpoena. 

        (g)    Remedies.    You agree that Paramount's remedies at law for any breach or threat of breach by you of any of the
provisions of this Section 7 will be inadequate, and that, in addition to any other remedy to which Paramount may be entitled at law or in equity, Paramount shall be entitled to a temporary or
permanent injunction or injunctions or temporary restraining order or orders to prevent breaches of the provisions of this Section 7 and to enforce specifically the terms and provisions hereof,
in each case without the need to post any security or bond and without the requirement to prove that monetary damages would be difficult to calculate and that remedies at law would be inadequate.
Nothing herein contained shall be construed as prohibiting Paramount from pursuing, in addition, any other remedies available to the Group for such breach or threatened breach. 

        (h)    Enforceability.    It is expressly understood and agreed that although the parties consider the restrictions
contained in this Section 7 hereof to be reasonable for the purpose of preserving the goodwill, proprietary rights and going concern value of the Group, if a final determination is made by an
arbitrator or court, as the case may be, having jurisdiction that the time or territory or any other restriction contained in this Section 7 is an unenforceable restriction on your activities,
the provisions of this Section 7 shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such other extent as such arbitrator or court, as
the case may be, may determine or indicate to be reasonable. Alternatively, if the arbitrator or court, as the case may be, referred to above finds that any restriction contained in this
Section 7 or any remedy provided herein is unenforceable, and such restriction or remedy cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any
of the other restrictions contained therein or the availability of any other remedy. 

        8.    Indemnification.    Paramount shall indemnify and hold you harmless from and against any and all losses, costs,
damages or expenses (including reasonable attorneys' fees) arising out of any claim or legal action brought against you, whether or not ultimately defensible under the applicable "Business Judgment
Rule," relating in any way to the services performed by you as an officer, director or manager for Paramount or any of its subsidiaries, whether arising during or after the Employment Period. This
indemnification provision is intended to be broadly interpreted and to provide for indemnification to the full extent permitted by applicable law. 

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        9.    Withholding.    Paramount shall have the right to withhold from any amount payable to you hereunder an amount
necessary in order for Paramount to satisfy any withholding tax obligation it may have under applicable law. Notwithstanding the foregoing, you are solely responsible for paying all required taxes on
any payments or other compensation provided under this Employment Letter. 

        10.    Governing Law.    The terms of this Employment Letter, and any action arising hereunder, shall be governed by
and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within the State. 

        11.    Waiver.    This Employment Letter may not be released, changed or modified in any manner, except by an
instrument in writing signed by you and Paramount. The failure of either party to enforce any of the provisions of this Employment Letter shall in no way be construed to be a waiver of any such
provision. No waiver of any breach of this Employment Letter shall be held to be a waiver of any other or subsequent breach. 

        12.    Assignment.    This Employment Letter is personal to you. You shall not assign this Employment Letter or any of
your rights and/or obligations under this Employment Letter to any other person. Paramount may, without your consent, assign this Employment Letter to any successor to its business. 

        13.    Dispute Resolution.    To benefit mutually from the time and cost savings of arbitration over the delay and
expense of the use of the federal and state court systems, all disputes involving this Employment Letter (except, at the election of Paramount, for injunctive relief with respect to disputes arising
out of an alleged breach or threatened breach of the restrictive covenants contained in Section 7), including claims of violations of federal or state discrimination statutes or public policy,
shall be resolved pursuant to binding arbitration in New York, New York administered by the American Arbitration Association under its Employment Dispute Resolution Rules then in effect. In the event
of a dispute, a written request for arbitration shall be submitted to the New York, New York office of the American Arbitration Association. The award of the arbitrators shall be final and binding and
judgment upon the award may be entered in any court having jurisdiction thereof. Except as otherwise provided above, this procedure shall be the exclusive means of settling any disputes that may arise
under this Employment Letter. For the purpose of any judicial proceeding to enforce such award or incidental to such arbitration or to compel arbitration and for purposes of Section 7 hereof,
the parties hereby submit to the non-exclusive jurisdiction of the Supreme Court of the State of New York, New York County, or the United States District Court for the Southern District of
New York, and agree that service of process in such arbitration or court proceedings shall be satisfactorily made upon it if sent by registered mail addressed to it at the address referred to below in
Section 17. All fees and expenses of the arbitrators and all other expenses of the arbitration, except for attorneys' fees and witness expenses which shall be borne by each party, shall be
shared equally by you and Paramount. However, if in any arbitration proceeding or injunctive action, an award or decision is made in your favor on any material claim, Paramount shall reimburse all of
your costs, including reasonable attorneys' fees, that you incurred in connection with such proceeding or action. You and Paramount agree that there will be no punitive damages payable as a result of
any dispute involving this Employment Letter or otherwise involving your employment and agree not to request punitive damages. 

        14.    No Conflicts.    You represent and warrant to Paramount that your acceptance of employment and the performance
of your duties for the Group will not conflict with or result in a violation or breach of, or constitute a default under any contract, agreement or understanding to which you are or were a party or of
which you are aware and that there are no restrictions, covenants, agreements or limitations on your right or ability to enter into and perform the terms of this Employment Letter. 

        15.    Entire Agreement.    Upon the Effective Date, this Employment Letter supersedes all previous and
contemporaneous communications, agreements and understandings between you Paramount, 

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Chem Rx
, Chem Rx NJ or any other member of the Group, and constitutes the sole and entire agreement among you and the Group pertaining to the subject matter hereof. 

        16.    Counterparts.    This Employment Letter may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become a binding agreement when one or more counterparts have been signed by each party and delivered to the other party. 

        17.    Notices.    All notices, requests, demands and other communications under this Employment Letter must be in
writing and will be deemed given (i) on the business day sent, when delivered by hand or facsimile transmission (with confirmation) during normal business hours, (ii) on the business day
after the business day sent, if delivered by a nationally recognized overnight courier or (iii) on the third business day after the business day sent if delivered by registered or certified
mail, return receipt requested, in each case to the following address or number (or to such other addresses or numbers as may be specified by notice that conforms to this Section 17): 

	If to you, to your address then on file with Paramount's payroll department.
	

If to Paramount, to:
	

 	
 	

Paramount Acquisition Corp.

750 Park Place

Long Beach, NY 11561

Attention: Corporate Secretary
	

 	
 	

with a copy to:
	

 	
 	

Paramount Acquisition Corp.

c/o Paramount BioSciences, LLC

787 7th Avenue

48th Floor

New York, NY 10019

Attention: J. Jay Lobell

Facsimile: (212) 580-0801
	

 	
 	

and
	

 	
 	

Covington & Burling LLP

The New York Times Building

620 Eighth Avenue

New York, NY 10018

Attention: Stephen A. Infante, Esq.

Facsimile: (212) 841-1010

[SIGNATURE
PAGE FOLLOWS] 

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        If the foregoing is acceptable to you, kindly sign and return to us one copy of this letter. 

	

 	
 	

Sincerely yours,
	

 	
 	

PARAMOUNT ACQUISITION CORP.
	

 	
 	

By:	
 	

/s/  J. JAY LOBELL      

	 	 	 	 	Name:	J. Jay Lobell
	 	 	 	 	Title:	Chief Executive Officer
	

AGREED TO AND ACCEPTED BY:	
 	

 	
 	

 	

 
	

/s/  MICHAEL SEGAL      
 Michael Segal	
 	

 	
 	

 	

 

[Signature
Page to Employment Letter] 

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Exhibit A
  
  RELEASE OF EMPLOYMENT CLAIMS    
    

        Michael
Segal ("Executive"), for and in consideration of the payments and benefits that Executive shall receive under the Employment Agreement between the Executive and Paramount
Acquisition Corp. ("Paramount") dated June 15, 2007 (the "Employment Agreement"), hereby executes the following General Release
("Release") and agrees as follows: 

        1.     Executive,
on behalf of Executive and Executive's agents, assignees, attorneys, successors, assigns, heirs, administrators and executors, does hereby fully and completely
forever release Paramount and its subsidiaries, affiliates, predecessors and successors and all of its past and/or present officers, directors, partners, members, managing members, managers,
executives, agents, representatives, administrators, attorneys, insurers and fiduciaries in their individual and/or representative capacities (hereinafter collectively referred to as the
"Releasees"), from any and all causes of action, suits, agreements, promises, damages, disputes, controversies, contentions, differences, judgments,
claims, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, variances, trespasses, extents, executions and demands of any kind whatsoever, which
Executive or Executive's heirs, executors, administrators, successors and assigns ever had, now have or may have against the Releasees or any of them, in law, admiralty or equity, whether known or
unknown to Executive, for, upon, or by reason of, any matter, action, omission, course or thing whatsoever occurring up to the date this Release is signed by Executive that arises from, in connection
with or in relationship to Executive's employment or other service relationship with Paramount or its affiliates, the termination of any such employment or service relationship and any applicable
employment, compensatory or equity arrangement with Paramount or its affiliates; provided that such released claims shall not include any claims (i) to entitlements under Section 6 of
the Employment Agreement or (ii) for indemnification under Section 12 of the Employment Agreement or the certificate of incorporation, by-laws or other similar organizational
documents of Paramount with regard to Executive's service as an officer of Paramount (such released claims are collectively referred to herein as the "Released
Claims"). 

        2.     Notwithstanding
the generality of paragraph (1) above, the Released Claims include, without limitation, (a) any and all claims under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Civil Rights Act of 1971, the Civil Rights Act of 1991, the Fair Labor Standards Act, the Executive Retirement Income Security
Act of 1974, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, and any and all other federal, state or local laws, statutes, rules and regulations pertaining to employment
or otherwise, and (b) any claims for wrongful discharge, breach of contract, fraud, misrepresentation or any compensation claims, or any other claims under any statute, rule, regulation or
under the common law, including compensatory damages, punitive damages, attorney's fees, costs, expenses and all claims for any other type of damage or relief. 

        3.     By
signing this Release, the Executive waives any right that the Executive has or may have had to bring a lawsuit or make any claim against the Releasees based on any
acts or omissions of the Releasees up to the date of the signing of this Release. 

        4.     Executive
represents that he has read carefully and fully understands the terms of this Release, and that Executive has been advised to consult with an attorney and has
had the opportunity to consult with an attorney prior to signing this Release. Executive acknowledges that he is executing this Release voluntarily and knowingly and that he has not relied on any
representations, promises or agreements of any kind made to Executive in connection with Executive's decision to accept the terms of this Release, other than those set forth in this Release. Executive
acknowledges that Executive has been given at least twenty-one (21) days to consider whether Executive wants to sign this Release and 

11

 

that
the Age Discrimination in Employment Act gives Executive the right to revoke this Release within seven (7) days after it is signed, and Executive understands that he will not receive any
payments due him under the Employment Agreement until such seven (7) day revocation period (the "Revocation Period") has passed and then, only if
Executive has not revoked this Release. Upon such revocation, this Release and the severance provisions of the Employment Agreement shall be null and void and of no further force and effect. To the
extent Executive has executed this Release within less than twenty-one (21) days after its delivery to Executive, Executive hereby acknowledges that his decision to execute this
Release prior to the expiration of such twenty-one (21) day period was entirely voluntary. 

	

 	

 Executive

12

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AGREEMENT AND PLAN OF MERGER

by and among

PARAMOUNT ACQUISITION CORP.,

PARAMOUNT MERGER SUB (NJ), INC.,

CHEMRX NEW JERSEY, LLC,

B.J.K. INC. and

THE MEMBERS OF CHEMRX NEW JERSEY, LLC

dated as of

June 15, 2007 

 

 
 

AGREEMENT AND PLAN OF MERGER    
    

        AGREEMENT AND PLAN OF MERGER, dated as of June 15, 2007 (this "Agreement"), by and among Paramount
Acquisition Corp., a Delaware corporation ("Parent"), Paramount Merger Sub (NJ), Inc., a Delaware corporation and a wholly owned subsidiary of
Parent ("Merger Sub"), ChemRx New Jersey, LLC, a New Jersey limited liability company (the "Company"),
B.J.K. Inc., a New York corporation ("Chem Rx"), Jerry Silva ("Jerry"), Steven Silva
("Steven") and Michael Segal ("Michael") (collectively Jerry, Steven and Michael, the
"Members"). 

WITNESSETH:  

        WHEREAS, Parent, Chem Rx, and the stockholders of Chem Rx are parties to a Stock Purchase Agreement, dated as of June1, 2007 (the "Stock
Purchase Agreement") and the consummation of the transactions contemplated by this Agreement are a condition to the closing under the Stock Purchase Agreement; 

        WHEREAS,
the respective Boards of Directors of Parent and Merger Sub, the Members, and Jerry as Managing Member of the Company have each approved the merger of the Merger Sub with and
into the Company (the "Merger"), upon the terms and subject to the conditions set forth in this Agreement; 

        WHEREAS,
for United States federal income tax purposes, the parties hereto intend that the Merger will qualify as a "reorganization" and that this Agreement will constitute a "plan of
reorganization," each within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the
"Code"); and 

        WHEREAS,
all capitalized terms used in this Agreement without definition in Article I hereof shall have the meanings ascribed to such terms in the Stock Purchase Agreement. 

        NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained and intending to be legally bound hereby, Parent, Merger Sub, Company, Chem Rx
and the Members hereby agree as follows: 

ARTICLE I

DEFINITIONS AND INTERPRETATION  

        Section 1.1    Definitions.    For all purposes of this Agreement, except as otherwise expressly provided or
unless the context clearly requires otherwise: 

        "Affiliate" of a Person shall mean a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first mentioned Person. 

        "Business Day" shall mean a day other than Saturday, Sunday or any day on which banks located in the State of New York are authorized or
obligated to close. 

        "Code" shall have the meaning set forth in the second recital above. 

        "Encumbrances" shall mean any and all liens, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or
agreements, obligations, understandings or arrangements or other restrictions on title or transfer of any nature whatsoever. 

        "Governmental Entity" shall mean a court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory
authority or agency. 

        "Material Adverse Effect" shall mean any change or changes, effect or effects, event or events, or circumstance or circumstances, that
individually or in the aggregate are or may reasonably be expected to be materially adverse to (i) the assets, properties, business, operations, income or condition (financial or otherwise) of
the Company, or (ii) the ability of the Company to perform its obligations under this Agreement. 

        "Merger Consideration" shall have the meaning set forth in Section 2.7 of this Agreement. 

        "Parent Common Stock" means the common stock of Parent, par value $0.0001 per share. 

 

        "Party" or "Parties" shall mean individually and collectively each of Parent, Merger Sub,
the Company, Chem Rx and the Members. 

        "Person" shall mean a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Entity or other entity or organization. 

        "Representative" shall mean any officer, director, employee, agent, advisor or consultant of a Person. 

        "Subsidiary" shall mean, with respect to any Person, any corporation or other organization, whether incorporated or unincorporated, of
which (a) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries or (b) such Person or any other Subsidiary of such Person is a general partner (excluding any such partnership where such Person or any Subsidiary of such Party does
not have a majority of the voting interest in such partnership). 

        "Third Party" shall mean any Person other than the Company, Chem Rx, Parent, Merger Sub or any of their respective Affiliates. 

        "Transactions" shall mean all the transactions provided for or contemplated by this Agreement, including the Merger. 

        "Transfer" shall have the meaning set forth in Section 5.1 herein. 

        Section 1.2    Interpretation.    

        (a)   When
a reference is made in this Agreement to a Section or Article, such reference shall be to a Section or Article of this Agreement unless otherwise clearly indicated
to the contrary. 

        (b)   Whenever
the words "include," "includes" or "including" are used in this Agreement they shall be deemed to be followed by the words "without limitation." 

        (c)   The
words "hereof," "herein" and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified. 

        (d)   The
meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting any gender shall
include all genders. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning. 

        (e)   A
reference to any Party to this Agreement or any other agreement or document shall include such Party's successors and permitted assigns. 

        (f)    A
reference to any legislation or to any provision of any legislation shall include any amendment to, and any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory instruments issued thereunder or pursuant thereto. 

ARTICLE II

THE MERGER  

        Section 2.1    The Merger.    Upon the terms and subject to the conditions set forth in Article VII
hereof, and in accordance with Section 264 of the General Corporation Law of the State of Delaware (the "DGCL") and
Section 42:2B-20 of the New Jersey Limited Liability Company Act (the "NJLLCA"), at the Effective Time (as defined below), the Merger
Sub shall be merged with and into the Company, and as a result of the Merger, the separate corporate existence of the Merger Sub shall 

2

 

cease
and the Company shall continue as the Surviving Company (the "Surviving Company") of the Merger. 

        Section 2.2    Closing; Effective Time.    A closing (the
"Closing") will be held at the offices of Covington & Burling LLP, 620 Eighth Avenue, New York, New York, at 10:00 a.m. (or such other
place as the parties may agree) as soon as practicable, and in any event not later than the date on which all of the conditions precedent in Article VII hereof (other than those conditions
which by their terms are to be satisfied at the Closing) are fulfilled or waived, or on such other date as the parties may agree. The date on which the Closing is actually held is referred to herein
as the "Closing Date." On the Closing Date, Parent, Merger Sub and the Company shall cause the Merger to be consummated by filing a certificate of
merger with the Delaware Secretary of State and a certificate of merger/consolidation with the New Jersey State Treasurer (the "Certificates of
Merger"), executed in accordance with the relevant provisions of the DGCL and the NJLLCA. The Merger shall become effective at such time as the Certificates of Merger are duly
filed with the Delaware Secretary of State and the New Jersey State Treasurer, or at such other time as Merger Sub and the Company shall agree should be specified in the Certificates of Merger,
provided that such time is on the Closing Date (the time the Merger becomes effective being hereinafter referred to as the "Effective Time"). 

        Section 2.3    Effect of the Merger.    At the Effective Time, the effect of the Merger shall be as provided in
the Certificate of Merger and the applicable provisions of the DGCL and the NJLLCA. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all of the property,
rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Company, and all debts, liabilities, obligations, restrictions, disabilities and duties of each of
the Company and Merger Sub shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Company. 

        Section 2.4    Limited Liability Company Agreement.    The Limited Liability Company Agreement of the Company,
as in effect immediately prior to the Effective Time, shall be amended, immediately following the Closing, to reflect (i) Parent as the sole member of the Company and (ii) the deletion
of all references to any of the Members. 

        Section 2.5    Managing Member.    The Managing Member of the Surviving Company shall initially be Parent, and
each officer of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Company, each to hold office in accordance with the Operating Agreement of the
Surviving Company. 

        Section 2.6    Effect on Capital Stock.    At the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Merger Sub, the Company or the Members: 

        (a)    Merger Sub Common Stock.    The shares of common stock, par value $01 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and become a one hundred per cent (100%) interest in the Company. 

        (b)    Company Equity.    The equity of the Company as a whole shall be converted into the right to receive the Merger
Consideration pro rata based on the percentage interest in the Company of the Members. As of the Effective Time, all such equity of the Company shall no longer be outstanding and shall automatically
be canceled and shall cease to exist, and the holder of such equity of Company shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration to be issued in
consideration therefor in accordance with the terms of this Agreement. Payment of the Merger Consideration will be as set forth in Section 2.7 hereof. 

        Section 2.7    Payment of Merger Consideration.    At the Effective Time, subject to the terms and conditions
of this Agreement, Parent shall pay the Merger Consideration by issuing to the Members the number of shares of Parent Common Stock set forth opposite each Member's name under the caption "Merger
Consideration Shares" on Exhibit A hereto (the "Merger Consideration Shares"). 

3

 
ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY AND THE MEMBERS  

        The Company and the Members represent and warrant to Parent that all of the statements contained in this Article III are true and complete as of the date
of this Agreement and as of the Closing Date (or, if made as of a specified date, as of such date). 

        Section 3.1    Organization; Qualification.    The Company (i) is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of New Jersey, (ii)has full limited liability company power and authority to carry on its business as now being conducted and
to own the properties and assets it now owns, and (iii) is duly qualified or licensed to do business as a foreign limited liability company in good standing in every jurisdiction in which such
qualification is required. 

        Section 3.2    Subsidiaries.    The Company does not have any Subsidiaries. 

        Section 3.3    Authorization; Validity of Agreement.    The Company has full limited liability company power
and authority to execute and deliver this Agreement and to consummate the Transactions. The execution, delivery and performance by the Company of this Agreement and the consummation by it of the
Transactions have been duly authorized by the Members, and no other action on the part of the Company is necessary to authorize the execution and delivery by the Company of this Agreement or the
consummation by it of the Transactions. This Agreement has been duly executed and delivered by the Company and, assuming due and valid authorization, execution and delivery thereof by Parent and
Merger Sub, this Agreement is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding
therefor may be brought. 

        Section 3.4    Consents and Approvals; No Violations.    None of the execution, delivery or performance of this
Agreement by the Company, the consummation by the Company of any of the Transactions or compliance by the Company with any of the provisions hereof will (i) conflict with or result in any
breach of any provision of the certificate of formation, the limited liability company agreement or similar organizational documents of the Company, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity or other Person (including consents from parties to loans, contracts, leases and other agreements to which the Company is a party),
(iii) require any consent, approval or notice under, or result in a violation or breach of, or constitute (with or without due notice or the passage of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any contract, agreement, arrangement or understanding to which the Company is a
party, or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, or any of their properties or assets, excluding from the foregoing clauses
(ii), (iii) and (iv) such violations, breaches or defaults which would not, individually or in the aggregate, have a Material Adverse Effect. 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF PARENT AND MERGER SUB  

        Parent and Merger Sub represent and warrant to the Company and the Members that all of the statements contained in this Article IV are true and complete as
of the date of this Agreement and as of the Closing Date (or, if made as of a specified date, as of such date). 

4

 

        Section 4.1    Organization.    Each of Parent and Merger Sub is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate or other power and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as now being conducted, except where the failure to be so organized, existing and in good standing or to have such power, authority, and governmental
approvals would not have, individually or in the aggregate, a material adverse effect on Parent's or Merger Sub's ability to consummate the Transactions. 

        Section 4.2    Capital Structure.    As of the date of this Agreement, the authorized capital stock of Parent
consists of 40,000,000 shares of Parent Common Stock and 1,000,000 share of preferred stock, par value $0.0001 per share, of Parent (collectively, the "Parent Capital
Stock"). All issued and outstanding shares of shares of Parent Capital Stock are duly authorized, validly issued, fully paid and nonassessable, and no class of Parent Capital
Stock is entitled to preemptive rights. 

        (a)   The
authorized capital stock of Merger Sub consists of 100 shares of common stock, par value $0.01 per share. All of the issued and outstanding capital stock of Merger
Sub is, and at the Effective Time will be, owned by Parent, and there are (i) no other outstanding shares of capital stock or voting securities of Merger Sub, (ii) no securities of
Merger Sub convertible into or exchangeable for shares of capital stock or voting securities of Merger Sub and (iii) no options or other rights to acquire from Merger Sub, and no obligations of
Merger Sub to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Merger Sub. 

        (b)   As
of the date of this Agreement, no bonds, debentures, notes or other indebtedness of Parent or any Parent Subsidiary having the right to vote on any matters on which
stockholders may vote, are issued or outstanding. 

        Section 4.3    Authorization; Validity of Agreement.    Parent and Merger Sub each have full corporate power
and authority to execute and deliver this Agreement and to consummate the Transactions as part of the transactions contemplated by the Stock Purchase Agreement. The execution, delivery and performance
by each of Parent and Merger Sub of this Agreement and the consummation of the Transactions have been authorized by the Board of Directors of Parent and Merger Sub. No other corporate action on the
part of Parent or Merger Sub is necessary to authorize the execution and delivery by Parent or Merger Sub of this Agreement or the consummation of the Transactions. This Agreement has been duly
executed and delivered by each of Parent and Merger Sub and, assuming due and valid authorization, execution and delivery hereof by the Company, is a valid and binding obligation of Parent and Merger
Sub, enforceable against each of Parent and Merger Sub in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. 

        Section4.4    Consents and Approvals; No Violations.    Except for the filings, permits, authorizations, consents and
approvals as have already been made and are in effect or will be made at the Effective Time, none of the execution, delivery or performance of this Agreement by Parent or Merger Sub, the consummation
by Parent or Merger Sub of the Transactions or compliance by Parent or Merger Sub with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the
certificate of incorporation or by-laws of Parent or Merger Sub, (ii) require any filing with, or permit, authorization, consent or approval of, any Governmental Entity,
(iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which Parent or any of its
Subsidiaries (including Merger Sub) is a party or by which any of them or any of their respective properties or assets may be bound, or (iv) violate any order, writ, injunction, 

5

 

decree,
statute, rule or regulation applicable to Parent or Merger Sub, any of its Subsidiaries (including Merger Sub) or any of their properties or assets, excluding from the foregoing clauses (ii),
(iii) and (iv) such violations, breaches or defaults which would not, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation by
Paramount of the transactions contemplated by this Agreement. 

        Section 4.5    No Business Activities.    Merger Sub has not conducted any activities other than in connection
with the organization of Merger Sub, the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. Merger Sub has no Subsidiaries. 

        Section 4.6    Authorization of Stock.    The shares of Parent Common Stock which may be issued to the Members
pursuant to Section 2.7 will be duly and validly issued, fully paid and nonassessable and will not be subject to or issued in violation of any purchase option, call option, right of first
refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Paramount Charter, the Paramount Bylaws or any Contract to which Parent is a party. 

ARTICLE V

COVENANTS  

        Section 5.1    Lock-Up Period for Shares.    During the 180-day period following the
Closing Date, no Member may, directly or indirectly, (i) offer, sell, contract to sell, lend, encumber, pledge, donate or otherwise dispose of or Transfer any shares of Parent Common Stock
issued to such Member pursuant to this Agreement or any securities received as a distribution thereon or otherwise
with respect thereto, whether now owned or hereafter acquired by such Member or with respect to which such Member has or hereafter acquires the power of disposition (collectively,
"Restricted Securities") or (ii) enter into any swap or any other agreement or transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Restricted Securities, whether any such swap or transaction described in (i) or (ii) above is to be settled by the delivery of
shares of Parent Common Stock or other securities, in cash or otherwise (any of the foregoing, a "Transfer"). During the period beginning
180 days following the Closing Date (the "Lock-Up Release Date") and ending (i) 90days following the Lock-Up
Release Date, no Member may, directly or indirectly, Transfer in excess of 50% of the total number of Restricted Securities held by such Member on the Lock-Up Release Date, (ii) on
the first anniversary of the Closing Date, no Member may, directly or indirectly, Transfer in excess of 75% of the total number of Restricted Securities held by such Member on the Lock-Up
Release Date. Following the first anniversary of the Closing Date all or any portion of the Restricted Securities may be Transferred by a Member without restriction under this Section 5.1. 

        Section 5.2    Contribution by Parent.    Promptly upon completion of the Merger, Parent shall contribute all
of its equity interest as the sole member of the Company to Chem Rx with the result that the Company will be a wholly-owned subsidiary of the Chem Rx. 

ARTICLE VI

CONDITIONS  

        Section 6.1    Conditions to Each Party's Obligation to Effect the Merger.    The respective obligations of the
Company, Parent and Merger Sub to effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions: 

        (a)    Statutes; Court Orders.    No statute, rule or regulation shall have been enacted or promulgated by any
Governmental Entity which prohibits the consummation of the Merger; and there shall be no order or injunction of a court of competent jurisdiction in effect precluding consummation of the Merger; 

6

  

        (b)    Stock Purchase Agreement.    The conditions set forth in Section 8.1 of the Stock Purchase Agreement
shall have been satisfied or validly waived (to the extent permitted under the Stock Purchase Agreement and applicable law). 

        Section 6.2    Conditions to Obligations of Parent and Merger Sub to Effect the Merger.    The obligations of
Parent and Merger Sub to consummate the Merger shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions: 

        (a)    Representations and Warranties.    All of the representations and warranties of the Members and the Company set
forth in this Agreement shall be true and complete in all material respects as of the date of this Agreement, other than representations and warranties that are qualified by their terms as to
materiality or "Material Adverse Effect," which representations and warranties as so qualified shall be true in all respects. 

        (b)    Stock Purchase Agreement.    The conditions set forth in Section 8.2 of the Stock Purchase Agreement
shall have been satisfied or validly waived (to the extent permitted under the Stock Purchase Agreement and applicable law). 

        The
foregoing conditions are for the sole benefit of Parent and Merger Sub and may be waived by Parent and Merger Sub, in whole or in part, at any time and from time to time in their
sole discretion. 

        Section 6.3    Conditions to Obligations of the Company and Members to Effect the Merger.    The obligations of
the Company and Members to consummate the Merger shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions: 

        (a)    Representations and Warranties.    All of the representations and warranties of Parent and Merger Sub set forth
in this Agreement shall be true and complete in all material respects as of the date of this Agreement, other than representations and warranties that are qualified by their terms as to materiality or
"material adverse effect," which representations and warranties as so qualified shall be true in all respects. 

        (b)    Stock Purchase Agreement.    The conditions set forth in Section 8.3 of the Stock Purchase Agreement
shall have been satisfied or validly waived (to the extent permitted under the Stock Purchase Agreement and applicable law). 

        The
foregoing conditions are for the sole benefit of the Company and Members and may be waived by the Company and Members, in whole or in part, at any time and from time to time in its
sole discretion. 

 
 

ARTICLE VII    
    
    MISCELLANEOUS    
    

        Section 7.1    Amendment and Modification.    This Agreement may be amended, modified and supplemented in any
and all respects, but only by a written instrument signed by all of the parties hereto expressly stating that such instrument is intended to amend, modify or supplement this Agreement. 

        Section 7.2    Notices.    All notices and other communications hereunder shall be in writing and shall be
deemed given when mailed, delivered personally, telecopied (which is confirmed) or sent by an 

7

 

overnight
courier service, such as Federal Express, to the parties at the following addresses (or at such other address for a Party as shall be specified by such Party by like notice): 

        if
to Parent or Merger Sub, to: 

Paramount
Acquisition Corp.

787 7th Avenue, 48th Floor

New York, NY 10019

Attention: J. Jay Lobell

Telecopy: (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

Telecopy: (212) 841-1010 

        if
to the Company or Chem Rx: 

c/o
Chem Rx

750 Park Place

Long Beach, NY 11561

Attention: Mr. Jerry Silva and Mr. Steven Silva

Telecopy: (516) 889-8321 

        with
a copy to: 

Troutman
Sanders LLP

The Chrysler Building

405 Lexington Avenue

New York, NY 10174

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

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

        If
to the Members, at the address listed for such Member on Exhibit A attached hereto (as amended by written notice from time to time). 

        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 7.3    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 two or more counterparts have been signed by each of the parties and delivered to the other parties. Copies of executed
counterparts transmitted by telecopy or other electronic transmission service shall be considered original executed counterparts, provided receipt of such counterparts is confirmed. 

        Section 7.4    Entire Agreement; No Third Party Beneficiaries.    This Agreement (a) constitutes the
entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (b) is not intended to confer any
rights or remedies upon any Person other than the parties hereto. 

8

 

        Section 7.5    Severability.    Any term or provision of this Agreement that is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof
or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction or other authority
declares that any term or provision hereof is invalid, void or unenforceable, the parties agree that the court making such determination shall have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable
and that comes closest to expressing the intention of the invalid or unenforceable term or provision. 

        Section 7.6    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws
of the State of New York without giving effect to the principles of conflicts of law thereof. 

        Section 7.7    Enforcement; Venue.    The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of New
York or in New York State court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself
to the personal jurisdiction of any Federal court located in the State of New York or any New York State court in the event any dispute arises out of this Agreement or any of the Transactions,
(b) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that it shall not bring any
action relating to this Agreement or any of the Transactions in any court other than a Federal or state court sitting in the State of New York. 

        Section 7.8    Waiver.    Any agreement on the part of a Party to any extension or waiver of compliance by the
other Parties with any of the agreements or conditions contained in this Agreement shall be valid only if set forth in an instrument in writing signed on behalf of such Party. The failure of any Party
to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. 

        Section 7.9    Election of Remedies.    Neither giving nor failing to give notice of a claim under this
Agreement will constitute an election of remedies or limit any Party in any manner in the enforcement of any other remedies that may be available to any of them, whether at law or in equity. 

        Section 7.10    Assignment.    Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other Parties. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 

        Section 7.11    No Claim Against Trust Fund.    The Members, Chem Rx and the Company each acknowledge that it
has read the final prospectus included in Parent's Registration Statement on Form S-1 (File No. 333-127149) and understand that Parent has established the Trust
Account for the benefit of Parent's public stockholders and that Parent may disburse monies from the Trust Account only (i) to its public stockholders in the event they elect to convert their
IPO Shares, (ii) to its public stockholders upon the liquidation of Parent if it fails to consummate a Business Combination (as defined in the Paramount Charter) or (iii) to Parent
after, or concurrently with, the consummation of a Business Combination. For and in consideration of Parent agreeing to evaluate the Company for purposes of consummating a Business Combination with
it, each of the Members, Chem Rx and the Company agree that it does not have any right, title, interest or claim of any kind in or to any monies 

9

 

in
the Trust Account and waives any claim it may have against the Trust Account in the future as a result of, or arising out of, any negotiations, contracts or agreements with Parent and will not seek
recourse against the Trust Account for any reason whatsoever. 

        Section 7.12    Termination.    In the event of termination of the Stock Purchase Agreement as provided in
Section 10.1 thereof, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Parent, Chem Rx, the Members or the Company other than
Section 7.11, and except to the extent that such termination results from a breach by a party of any representation, warranty or covenant set forth in this Agreement. 

        Section 7.13    Further Assurances.    Each of the parties shall use reasonable commercial efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by
this Agreement. 

        Section 7.14    Stock Purchase Agreement Controls.    To the extent of any conflict between the Stock Purchase
Agreement and this Agreement, the Stock Purchase Agreement shall control. 

        IN
WITNESS WHEREOF, Parent, Merger Sub, the Company, Chem Rx and the Members have executed this Agreement or caused this Agreement to be executed by their respective officers thereunto
duly authorized as of the date first written above. 

	 
	 	 
	 	 

	 	 	PARAMOUNT ACQUISITION CORP.
	

 	
 	

By:	
 	

/s/  J. JAY LOBELL      

	 	 	Name:	 	J. Jay Lobell
	 	 	Title:	 	Chief Executive Officer
	

 	
 	

PARAMOUNT MERGER SUB (NJ), INC.
	

 	
 	

By:	
 	

/s/  J. JAY LOBELL      

	 	 	Name:	 	J. Jay Lobell
	 	 	Title:	 	President
	

 	
 	

B.J.K. INC.
	

 	
 	

By:	
 	

/s/  JERRY SILVA      

	 	 	Name:	 	Jerry Silva
	 	 	Title:	 	Chief Executive Officer
	

 	
 	

CHEMRX NEW JERSEY, LLC
	

 	
 	

By:	
 	

/s/  JERRY SILVA      

	 	 	Name:	 	Jerry Silva
	 	 	Title:	 	Managing Member
	

 	
 	

/s/  JERRY SILVA      
 Jerry Silva
	

 	
 	

/s/  STEVEN SILVA      
 Steven Silva
	

 	
 	

/s/  MICHAEL SEGAL      
 Michael Segal

[SIGNATURE
PAGE TO AGREEMENT AND PLAN OF MERGER] 

10

  

 
 

EXHIBIT A
  
    MEMBER INFORMATION    
    

	Name and Address of

Members
 
	 	Number of Merger

Consideration Shares

	Jerry Silva

2594 Norton Place

Bellmore, NY 11710	 	450,000
	

Steven Silva

2589 Glenn Drive

Bellmore, NY 11710	
 	

450,000
	

Michael Segal

791 John Street

Teaneck, NJ 07666	
 	

100,000

11

QuickLinks

AGREEMENT AND PLAN OF MERGER

ARTICLE VII MISCELLANEOUS

EXHIBIT A MEMBER INFORMATION

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