INVESTMENT MANAGEMENT TRUST AGREEMENT

                      INVESTMENT MANAGEMENT TRUST AGREEMENT

          This Agreement is made as of _____________, 2005 by and between
Paramount Acquisition Corp. (the "Company") and Continental Stock Transfer &
Trust Company ("Trustee").

          WHEREAS, the Company's registration statement on Form S-1, No.
333-_______ ("Registration Statement"), for its initial public offering of
securities ("IPO") has been declared effective as of the date hereof by the
Securities and Exchange Commission ("Effective Date"); and

          WHEREAS, EarlyBirdCapital, Inc. ("EBC") is acting as the
representative of the underwriters in the IPO; and

          WHEREAS, as described in the Registration Statement, and in accordance
with the Company's Certificate of Incorporation, $45,050,000 of the gross
proceeds of the IPO ($52,164,500 if the underwriters over-allotment option is
exercised in full) will be delivered to the Trustee to be deposited and held in
a trust account for the benefit of the Company and the holders of the Company's
common stock, par value $.0001 per share, issued in the IPO as hereinafter
provided and in the event the Units are registered in Colorado, pursuant to
Section 11-51-302(6) of the Colorado Revised Statutes. A copy of the Colorado
Statute is attached hereto and made a part hereof (the amount to be delivered to
the Trustee will be referred to herein as the "Property"; the stockholders for
whose benefit the Trustee shall hold the Property will be referred to as the
"Public Stockholders," and the Public Stockholders and the Company will be
referred to together as the "Beneficiaries"); and

          WHEREAS, the Company and the Trustee desire to enter into this
Agreement to set forth the terms and conditions pursuant to which the Trustee
shall hold the Property;

          IT IS AGREED:

1. Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants
to:

          (a) Hold the Property in trust for the Beneficiaries in accordance
with the terms of this Agreement, including the terms of Section 11-51-302(6) of
the Colorado Statute, in a segregated trust account ("Trust Account")
established by the Trustee;

          (b) Manage, supervise and administer the Trust Account subject to the
terms and conditions set forth herein;

          (c) In a timely manner, upon the instruction of the Company, to invest
and reinvest the Property in United States "government securities" within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a
maturity of 180 days or less, or in any open ended investment company registered
under the Investment Company Act of 1940 that holds itself out as a money market
fund meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7
promulgated under the Investment Company Act of 1940;

          (d) Collect and receive, when due, all principal and income arising
from the



Property, which shall become part of the "Property," as such term is used
herein;

          (e) Notify the Company of all communications received by it with
respect to any Property requiring action by the Company;

          (f) Supply any necessary information or documents as may be requested
by the Company in connection with the Company's preparation of the tax returns
for the Trust Account;

          (g) Participate in any plan or proceeding for protecting or enforcing
any right or interest arising from the Property if, as and when instructed by
the Company to do so;

          (h) Render to the Company and to EBC, and to such other person as the
Company may instruct, monthly written statements of the activities of and
amounts in the Trust Account reflecting all receipts and disbursements of the
Trust Account; and

          (i) Commence liquidation of the Trust Account only after receipt of
and only in accordance with the terms of a letter ("Termination Letter"), in a
form substantially similar to that attached hereto as either Exhibit A or
Exhibit B, signed on behalf of the Company by its President or Chairman of the
Board and Secretary or Assistant Secretary, and complete the liquidation of the
Trust Account and distribute the Property in the Trust Account only as directed
in the Termination Letter and the other documents referred to therein.

2. Agreements and Covenants of the Company. The Company hereby agrees and
covenants to:

          (a) Give all instructions to the Trustee hereunder in writing, signed
by the Company's President or Chairman of the Board. In addition, except with
respect to its duties under paragraph 1(i) above, the Trustee shall be entitled
to rely on, and shall be protected in relying on, any verbal or telephonic
advice or instruction which it in good faith believes to be given by any one of
the persons authorized above to give written instructions, provided that the
Company shall promptly confirm such instructions in writing;

          (b) Hold the Trustee harmless and indemnify the Trustee from and
against, any and all expenses, including reasonable counsel fees and
disbursements, or loss suffered by the Trustee in connection with any action,
suit or other proceeding brought against the Trustee involving any claim, or in
connection with any claim or demand which in any way arises out of or relates to
this Agreement, the services of the Trustee hereunder, or the Property or any
income earned from investment of the Property, except for expenses and losses
resulting from the Trustee's gross negligence or willful misconduct. Promptly
after the receipt by the Trustee of notice of demand or claim or the
commencement of any action, suit or proceeding, pursuant to which the Trustee
intends to seek indemnification under this paragraph, it shall notify the
Company in writing of such claim (hereinafter referred to as the "Indemnified
Claim"). The Trustee shall have the right to conduct and manage the defense
against such Indemnified Claim, provided, that the Trustee shall obtain the
consent of the Company with respect to the selection of counsel, which consent
shall not


                                       2



be unreasonably withheld. The Trustee may not agree to settle any Indemnified
Claim without the prior written consent of the Company. The Company may
participate in such action with its own counsel; and

          (c) Pay the Trustee an initial acceptance fee of $1,000 and an annual
fee of $3,000 (it being expressly understood that the Property shall not be used
to pay such fee). The Company shall pay the Trustee the initial acceptance fee
and first year's fee at the consummation of the IPO and thereafter on the
anniversary of the Effective Date. The Trustee shall refund to the Company the
fee (on a pro rata basis) with respect to any period after the liquidation of
the Trust Fund. The Company shall not be responsible for any other fees or
charges of the Trustee except as may be provided in paragraph 2(b) hereof (it
being expressly understood that the Property shall not be used to make any
payments to the Trustee under such paragraph).

3. Limitations of Liability. The Trustee shall have no responsibility or
liability to:

          (a) Take any action with respect to the Property, other than as
directed in paragraph 1 hereof and the Trustee shall have no liability to any
party except for liability arising out of its own gross negligence or willful
misconduct;

          (b) Institute any proceeding for the collection of any principal and
income arising from, or institute, appear in or defend any proceeding of any
kind with respect to, any of the Property unless and until it shall have
received instructions from the Company given as provided herein to do so and the
Company shall have advanced or guaranteed to it funds sufficient to pay any
expenses incident thereto;

          (c) Change the investment of any Property, other than in compliance
with paragraph 1(c);

          (d) Refund any depreciation in principal of any Property;

          (e) Assume that the authority of any person designated by the Company
to give instructions hereunder shall not be continuing unless provided otherwise
in such designation, or unless the Company shall have delivered a written
revocation of such authority to the Trustee;

          (f) The other parties hereto or to anyone else for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best judgment, except for its gross
negligence or willful misconduct. The Trustee 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 Trustee), 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
Trustee, in good faith, to be genuine and to be signed or presented by the
proper person or persons. The Trustee shall not be bound by any notice or
demand, or any waiver, modification, termination or rescission of this agreement
or any of the terms hereof, unless evidenced by a written instrument delivered
to the Trustee signed by the proper party or parties and,