Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ju9bfXRe50y1mD2W6sJJdpqOD7pB/RdA/ipHqPduPp34jkYE8eVfWEC5Tmg1re0m b2/G3UJBcP3gbsGSk+EtoA== 0000950123-10-053096.txt : 20100526 0000950123-10-053096.hdr.sgml : 20100526 20100526112639 ACCESSION NUMBER: 0000950123-10-053096 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20100526 DATE AS OF CHANGE: 20100526 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Winston Pharmaceuticals, Inc. CENTRAL INDEX KEY: 0001302554 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 300132755 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-82281 FILM NUMBER: 10858772 BUSINESS ADDRESS: STREET 1: 100 N. FAIRWAY DRIVE STREET 2: SUITE 134 CITY: VERNON HILLS STATE: IL ZIP: 60061 BUSINESS PHONE: 847-362-8200 MAIL ADDRESS: STREET 1: 100 N. FAIRWAY DRIVE STREET 2: SUITE 134 CITY: VERNON HILLS STATE: IL ZIP: 60061 FORMER COMPANY: FORMER CONFORMED NAME: GETTING READY CORP DATE OF NAME CHANGE: 20040908 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Pharmaceutical Financial Syndicate, LLC CENTRAL INDEX KEY: 0001492278 IRS NUMBER: 271991180 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 100 FAIRWAY DRIVE STREET 2: SUITE 134 CITY: VERNON HILLS STATE: IL ZIP: 60061 BUSINESS PHONE: 847-362-8200 MAIL ADDRESS: STREET 1: 100 FAIRWAY DRIVE STREET 2: SUITE 134 CITY: VERNON HILLS STATE: IL ZIP: 60061 SC 13D 1 c01754sc13d.htm SCHEDULE 13D Schedule 13D

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

Winston Pharmaceuticals, Inc.

(Name of Issuer)

Common Stock, par value $.001 per share

(Title of Class of Securities)

975657107

(CUSIP Number)

Joel E. Bernstein, M.D.
c/o Pharmaceutical Financial Syndicate, LLC
100 North Fairway Drive, Suite 134
Vernon Hills, IL 60061
(847) 362-8200

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

May 19, 2010

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.		975657107


1	NAMES OF REPORTING PERSONS Pharmaceutical Financial Syndicate, LLC


2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
	(a) o
	(b) o

3	SEC USE ONLY



4	SOURCE OF FUNDS (SEE INSTRUCTIONS)

	PF

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

	o

6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware

		7	SOLE VOTING POWER

NUMBER OF			27,358,246 (1)

SHARES		8	SHARED VOTING POWER
BENEFICIALLY
OWNED BY			—

EACH		9	SOLE DISPOSITIVE POWER
REPORTING
PERSON			27,358,246 (1)

WITH		10	SHARED DISPOSITIVE POWER

			—

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	27,358,246 (1)

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

	o

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	35.34%

14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

	OO

(1) Includes 18,399,271 shares of common stock and 8,958,975 warrants to purchase common stock.


CUSIP No.		975657107

Item 1. Security and Issuer.

This statement relates to shares of common stock, par value $.001 per share, of Winston Pharmaceuticals, Inc., a Delaware corporation (the “Issuer”). The address of the Issuer’s principal executive office is 100 North Fairway Drive, Suite 134, Vernon Hills, IL 60061.

Item 2. Identity and Background.

This statement on Schedule 13D is filed by Pharmaceutical Financial Syndicate, LLC, a Delaware limited liability company (“PFS”).

Dr. Joel E. Bernstein owns a 31% equity interest in PFS and is its manager. The address of Dr. Bernstein is c/o Winston Pharmaceuticals, Inc., 100 North Fairway Drive, Suite 134, Vernon Hills, IL 60061. Dr. Bernstein is a citizen of the United States

During the past five years, neither PFS nor Dr. Bernstein has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors).

During the past five years, neither PFS nor Dr. Bernstein has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding, was or are subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds and Other Consideration.

On May 19, 2010, an aggregate of 18,399,271 outstanding shares of the Issuer’s common stock and warrants to purchase an aggregate of 8,958,975 shares of the Issuer’s common stock (collectively, the “Acquired Securities”) were sold by Frost Gamma Investments Trust (“Frost Gamma”), Subbarao Uppaluri, a director of the Company, Steven D. Rubin and Jane Hsiao (collectively, the “Frost Group”) to Pharmaceutical Financial Syndicate, LLC (“PFS”) pursuant to a Stock Purchase Agreement (the “SPA,” and such transaction, the “Acquisition”).

As consideration for the Acquired Securities, PFS paid the Frost Group an aggregate amount of cash equal to $789,500 and executed non-recourse promissory notes in favor of each of the members of the Frost Group in the aggregate principal amount of $10,263,500 (the “Promissory Notes”). 92.857% of the Acquired Securities (the “Escrowed Securities”) were placed in escrow pursuant to the SPA and an escrow agreement by and among PFS, the Frost Group and an escrow agent (the “Escrow Agreement”) as security for the payment of the Promissory Notes. The Escrowed Securities are subject to release to PFS in proportion to its payment of principal under each of the Promissory Notes. The source of funds for this transaction was the working capital of PFS.

Item 4. Purpose of Transaction.

PFS purchased the Acquired Securities for general investment purposes, and retains the right to change its investment intent.

On May 19, 2010, as provided in the SPA, and simultaneous with the Acquisition, three of the Company’s directors, namely Subbarao Uppaluri, Glenn Halpryn and Curtis Lockshin, resigned as directors of the Company. Upon completion of the Acquisition, as the manager of PFS, Dr. Bernstein is deemed to be the beneficial owner of all of the Acquired Securities. These interests, together with Dr. Bernstein’s other equity interests in the Company, include an aggregate of 53,094,765 shares of common stock, options to purchase 100,000 shares of common stock (including 20,000 vested options), and warrants to purchase 8,958,975 shares of common stock, or approximately 61.5% of the Company. Pursuant to Rule 13d-4, Dr. Bernstein disclaims beneficial ownership of those Acquired Securities in which he does not have a pecuniary interest through PFS, consisting of 12,695,497 shares and 6,181,693 warrants.

Other than as set forth above, PFS does not currently have any plans or proposals, either individually or collectively with another person, which relates to or would result in any event enumerated in items (a) through (j) of Item 4.

Item 5. Interest in Securities of the Company.

(a) The aggregate number and percentage of class of securities identified pursuant to Item 1 beneficially owned by PFS may be found in rows 11 and 13 of the Cover Page of this Schedule 13D, which hereby is incorporated by reference.


CUSIP No.		975657107

Upon completion of the Acquisition, as the manager of PFS, Dr. Bernstein is deemed to be the beneficial owner of all of the Acquired Securities. These interests, together with Dr. Bernstein’s other equity interests in the Company, include an aggregate of 53,114,765 shares of common stock, options to purchase 100,000 shares of common stock (including 20,000 vested options), and warrants to purchase 8,958,975 shares of common stock, or approximately 61.5% of the Company. Pursuant to Rule 13d-4, Dr. Bernstein disclaims beneficial ownership of those Acquired Securities in which he does not have a pecuniary interest through PFS, consisting of 12,695,497 shares and 6,181,693 warrants.

(b) The powers that PFS has relative to the shares of the Issuer’s common stock discussed herein may be found in rows 7 through 10 of the Cover Page of this Schedule 13D, which hereby is incorporated by reference.

The powers that Dr. Bernstein has relative to the shares of the Issuer’s common stock discussed herein may be found in paragraph (a) of Item 5 above, which is hereby incorporated by reference.

(c) On April 7, 2009, Dr. Bernstein was awarded options to purchase 100,000 shares of the Company’s common stock which options vest in five equal annual installments commencing on April 7, 2010. On May 19, 2010, the Acquired Securities consisting of an aggregate of 18,399,271 outstanding shares of the Issuer’s common stock and warrants to purchase an aggregate of 8,958,975 shares of the Issuer’s common stock were sold by the Frost Group to PFS.

(d) None.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

See Item 5(c). Simultaneous with the Acquisition, PFS entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with each of the members of the Frost Group and the Issuer, and Dr. Bernstein and his spouse, Carole Bernstein, entered a Standstill Agreement with the Issuer and the members of the Frost Group (the “Standstill Agreement”). Among other things, the Registration Rights Agreement grants PFS and each of the members of the Frost Group certain piggyback registration rights with respect to the Acquired Securities in the event that the Issuer proposes to register any class of its common stock under the Securities Act of 1933, as amended, for its own account or for the account of any holder of its securities. Among other things, under the Standstill Agreement, Dr. and Mrs. Bernstein have agreed, for so long as any of the Promissory Notes remain outstanding, that they shall not sell, offer to sell, transfer, assign, pledge or hypothecate any securities of the Issuer directly or indirectly owned by them, or deemed to be beneficially owned by them, including any securities of the Issuer obtained after the date of the Standstill Agreement. In the event of Dr. Bernstein’s death, such restrictions shall terminate immediately and Mrs. Bernstein shall be entitled to exercise full dispositive power with respect to any such securities. In addition, under the Standstill Agreement, Dr. and Mrs. Bernstein have agreed not to enter into any agreement with respect to the Issuer’s securities that is inconsistent with or violates the rights granted to the parties to the Standstill Agreement under the SPA or the Escrow Agreement. The foregoing descriptions of the Registration Rights Agreement and the Standstill Agreement are summaries and are qualified in their entirety by the terms and conditions of the Registration Rights Agreement and the Standstill Agreement, copies of which are attached as exhibits to this Schedule 13D.

Item 7. Materials to be Filed as Exhibits.

	1.		Stock Purchase Agreement by and among Pharmaceutical Financial Syndicate, LLC, Frost Gamma Investments Trust, Subbarao Uppaluri, Steven D. Rubin and Jane Hsiao.

	2.		Escrow Agreement by and among Pharmaceutical Financial Syndicate, LLC, Frost Gamma Investments Trust, Subbarao Uppaluri, Steven D. Rubin, Jane Hsiao and Wells Fargo Bank, National Association.

	3.		Promissory Note made by Pharmaceutical Financial Syndicate, LLC in favor of Frost Gamma Investments Trust.

	4.		Promissory Note made by Pharmaceutical Financial Syndicate, LLC in favor of Subbarao Uppaluri.

	5.		Promissory Note made by Pharmaceutical Financial Syndicate, LLC in favor of Steven D. Rubin.

	6.		Promissory Note made by Pharmaceutical Financial Syndicate, LLC in favor of Jane Hsiao.


CUSIP No.		975657107

	7.		Registration Rights Agreement between Pharmaceutical Financial Syndicate, LLC, Frost Gamma Investments Trust, Subbarao Uppaluri, Steven D. Rubin and Jane Hsiao, Ph.D.

	8.		Standstill Agreement between Joel E. Bernstein, Carole Bernstein, Frost Gamma Investments Trust, Subbarao Uppaluri, Steven D. Rubin and Jane Hsiao.

[The remainder of this page is left blank intentionally.]


CUSIP No.		975657107

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.


	PHARMACEUTICAL FINANCIAL SYNDICATE, LLC
Date: May 25, 2010	By:	/s/ Joel E. Bernstein
		Name:	Joel E. Bernstein, M.D.
		Title:	Manager

EX-99.1 2 c01754exv99w1.htm EXHIBIT 1 Exhibit 1

Exhibit 1

EXECUTION COPY

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of the 19th day of May, 2010, is by and among Pharmaceutical Financial Syndicate, LLC, a Delaware limited liability company (“Buyer”), and each of Frost Gamma Investments Trust, Subbarao Uppaluri, Steven D. Rubin and Jane Hsiao (collectively, the “Frost Group Shareholders” and individually, a “Frost Group Shareholder”).

WITNESSETH:

WHEREAS, the Frost Group Shareholders collectively own 18,399,271 shares of common stock, $0.001 par value (“WPI Common Stock”), of Winston Pharmaceuticals, Inc. (“WPI”) and 8,958,975 warrants to purchase shares of WPI Common Stock (the 18,399,271 shares of common stock are referred to as the “Acquired Shares”, the 8,958,975 warrants are referred to as the “Acquired Warrants” and the Acquired Shares and Acquired Warrants are collectively referred to as the “Acquired Securities”); and

WHEREAS, pursuant to a letter dated February 3, 2010 between the parties hereto (the “Letter of Intent”), Buyer desires to purchase, and the Frost Group Shareholders desire to sell, the Acquired Securities;

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

ARTICLE I

SALE OF ACQUIRED SECURITIES

1.1 Sale of Acquired Securities. Subject to the terms and conditions of this Agreement, and on the basis of the representations and warranties hereinafter set forth, at the Closing (as hereinafter defined), each of the Frost Group Shareholders shall sell, assign, transfer and deliver to Buyer, and Buyer shall purchase from each of the Frost Group Shareholders, that number of the Acquired Securities set forth opposite such Frost Group Shareholder’s name on Schedule I hereto, free and clear of all liens, pledges, security interests, options, proxies, voting trusts or agreements and other transfer restrictions, other than (i) restrictions imposed by applicable securities laws and regulations, (ii) those certain Lockup Agreements (the “Lockup Agreements”), between each of the Frost Group Shareholders and WPI pursuant to that certain Merger Agreement and Plan of Reorganization, dated November 13, 2007, as amended, among WPI, Winston Laboratories, Inc., and Winston Acquisition Corp., and (iii) that certain Voting Agreement, dated September 30, 2008, among WPI and the signatories thereto.

1.2 Purchase Consideration. Upon the terms and subject to the conditions of this Agreement and in consideration of the sale of the Acquired Securities, at the Closing, the following consideration (the “Purchase Price”) shall be delivered by Buyer to or for the benefit of the Frost Group Shareholders:

(a) An aggregate amount of cash equal to $789,500 (the “Closing Date Payment”), as allocated among each Frost Group Shareholder in the amounts opposite such Frost Group Shareholder’s name on Schedule I hereto.

(b) Non-recourse promissory notes in the aggregate principal amount of $10,263,500 in the form attached hereto as EXHIBIT 1.2(b) (the “Notes”), with the principal amount of the Note for each Frost Group Shareholder set forth opposite such Frost Group Shareholder’s name on Schedule I hereto.

1.3 Acquired Security Assignment and Escrow Agreement. 7.143% of each Frost Group Shareholder’s Acquired Shares (aggregating 1,314,260 shares) and Acquired Warrants (aggregating 639,940 warrants) will be assigned by separate stock powers to Buyer and delivered to Buyer at the Closing (collectively, the “Closing Date Delivered Securities”). 92.857% of each Frost Group Shareholder’s Acquired Shares (aggregating 17,085,011 shares (the “Escrow Shares”)) and Acquired Warrants (aggregating 8,319,035 warrants (the “Escrow Warrants”)) will be assigned by separate stock powers to Buyer and delivered to the Escrow Agent under and pursuant to the terms of the Escrow Agreement (the “Escrow Agreement”) in the form attached hereto as EXHIBIT 1.3 (collectively, the “Escrow Securities”).

1.4 Time and Place of Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at 10:00 a.m. on May 19, 2010, or at such earlier time as Buyer and the Frost Group Shareholders hereto may mutually agree (the date on which the Closing actually occurs, the “Closing Date”). The place of the Closing shall be at the offices of Levenfeld Pearlstein, 2 North LaSalle Street, Chicago, Illinois, or such other location as may be mutually agreed by the parties.

1.5 Deliveries at Closing.

(a) Deliveries by the Frost Group Shareholders. At the Closing, the Frost Group Shareholders will deliver to Buyer:

(i) stock certificates and warrant agreements representing all of the Acquired Securities, accompanied by separate stock powers assigning the Acquired Securities to Buyer as contemplated by Section 1.3. The Closing Date Delivered Securities shall be delivered to Buyer on Closing and the Escrow Securities shall be delivered to the Escrow Agent on Closing; and

(ii) the resignation of each of Subbarao Uppaluri, Glenn Halpryn and Curtis Lockshin as a director of WPI.

(b) Deliveries by Buyer. At the Closing, Buyer will cause the Purchase Price to be delivered to the Frost Group Shareholders in accordance with Section 1.2 hereof.

(i) the Escrow Agreement;

(ii) the Standstill Agreement between Dr. Joel E. Bernstein and certain members of his immediate family and the Frost Group Shareholders, in the form attached hereto as EXHIBIT 1.5(c)(ii);

(iii) the Registration Rights Agreement between WPI and the Frost Group Shareholders, in the form attached hereto as EXHIBIT 1.5 (c)(iii); and

(iv) the Mutual Release and Non-Disparagement Agreement between WPI, the Frost Group Shareholders and Buyer, in the form attached hereto as EXHIBIT 1.5(c)(iv).

The term “Ancillary Instruments” refers to all documents and agreements delivered in connection with this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE FROST GROUP SHAREHOLDERS

Each of the Frost Group Shareholders hereby severally, with respect to itself only, represents and warrants and covenants and agrees to Buyer, as of the date hereof, as set forth in this Article II.

2.1 Execution, Delivery; Valid and Binding Agreements. This Agreement has been duly executed and delivered by such Frost Group Shareholder, and assuming that this Agreement is the valid and binding agreement of Buyer, this Agreement constitutes the valid and binding obligation of such Frost Group Shareholder, enforceable in accordance with its terms.

2.2 Authority. Subject to WPI’s consent or release under the Lockup Agreements, such Frost Group Shareholder has all requisite power and authority and full legal capacity to execute and deliver this Agreement and to perform his, her or its obligations hereunder, including, without limitation, all right, power, capacity and authority to sell, transfer and convey those of the Acquired Securities set forth opposite his, her or its name on the attached SCHEDULE I as provided by this Agreement.

2.3 Ownership of Acquired Securities. Such Frost Group Shareholder is the record and beneficial owner of the number of Acquired Securities as set forth opposite his, her or its name on the attached SCHEDULE I. To such Frost Group Shareholder’s knowledge, no affiliate or associate of such Frost Group Shareholder or member of such Frost Group Shareholder’s immediate family is a record or beneficial owner of any WPI Common Stock or warrants to purchase shares of WPI Common Stock.

2.4 No Litigation. There are no actions, suits or proceedings pending or, to such Frost Group Shareholder’s knowledge, threatened against such Frost Group Shareholder, at law or in equity, or before or by any court of governmental authority which, if determined adversely to such Frost Group Shareholder, would have an adverse effect on such Frost Group Shareholder’s ability to transfer such Frost Group Shareholder’s Acquired Securities pursuant to this Agreement or otherwise perform its obligations as set forth in this Agreement.

2.5 Brokerage. There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement, based on any arrangement or agreement made by or on behalf of such Frost Group Shareholder.

2.6 No Violation. Except for (i) the consent of WPI under the Lockup Agreements, (ii) the Notice of and Form of Assignment to be delivered to WPI in connection with the transfer of the Acquired Warrants, and (iii) filings required under applicable securities laws and regulations, no consent, authorization or approval of, or declaration, filing or registration with, any governmental, administrative or regulatory body, or any consent, authorization or approval of any other third party, is necessary in order to enable such Frost Group Shareholder to enter into and perform its respective obligations under this Agreement and the Ancillary Instruments and to consummate the transactions contemplated hereby and thereby, and neither the execution and delivery of this Agreement and the Ancillary Instruments nor the consummation of the transactions contemplated herein or therein will result in the creation or imposition of any security interest, lien, charge or other encumbrance upon any of the Acquired Securities under any agreement or commitment, other than those imposed under the Lock up Agreements and applicable securities laws and regulations and any Ancillary Instrument; or conflict with or result in the breach of any writ, injunction or decree of any court or governmental instrumentality to which such Frost Group Shareholder is a party or by which it is bound or violate any statute, law or regulation of any jurisdiction applicable to such Frost Group Shareholder which would prevent the execution by such Frost Group Shareholder of this Agreement or the performance of its obligations hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BUYER

Buyer represents and warrants and covenants and agrees to the Frost Group Shareholders as of the date hereof and as of the Closing Date, as set forth in this Article III:

3.1 Execution, Delivery; Valid and Binding Agreements. This Agreement has been duly executed and delivered by Buyer, and assuming that this Agreement is the valid and binding agreement of each of the Frost Group Shareholders, this Agreement constitutes the valid and binding obligation of Buyer, enforceable in accordance with its terms.

3.2 Authority. Buyer (i) is financially capable of making the Closing Date Payment pursuant to Section 1.2(a) hereof and (ii) has all requisite power and authority and full legal capacity to execute and deliver this Agreement and to perform its obligations hereunder and under the Notes and Ancillary Instruments.

3.3 No Litigation. There are no actions, suits or proceedings pending or, to Buyer’s knowledge, threatened against Buyer, at law or in equity, before or by any court of governmental authority which, if determined adversely to Buyer, would have an adverse effect on Buyer’s ability to perform as set forth in this Agreement.

3.4 Brokerage. There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement, based on any arrangement or agreement made by or on behalf of Buyer.

3.5 No Violation. No consent, authorization or approval of, or declaration, filing or registration with, any governmental, administrative or regulatory body, or any consent, authorization or approval of any other third party, is necessary in order to enable Buyer to enter into and perform its respective obligations under this Agreement and the Ancillary Instruments and to consummate the transactions contemplated hereby and thereby, and neither the execution and delivery of this Agreement and the Ancillary Instruments nor the consummation of the transactions contemplated herein or therein will conflict with or result in the breach of any writ, injunction or decree of any court or governmental instrumentality; or violate any statute, law or regulation of any jurisdiction.

3.6 Suitability of Investment. Buyer represents and warrants that it has (i) the financial ability to bear the economic risk of the investment in the Acquired Securities, (ii) adequate means to provide for its current needs and other contingencies and to withstand the loss of the entire investment in the Acquired Securities and (iii) no need for liquidity with respect to the investment in the Acquired Securities. Buyer has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of a purchase of the Acquired Securities and has determined that the purchase of the Acquired Securities is a suitable investment for itself. Buyer acknowledges that it is making its decision based on publicly available information regarding WPI as it deems sufficient to make an informed investment decision with respect to an investment in the Acquired Securities and has not been provided with any information regarding WPI by any Frost Group Shareholder. Buyer has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisers in connection herewith to the extent it has deemed necessary, and has made its own investment decision and not based upon any view expressed by or on behalf of any Frost Group Shareholder.

3.7 Acquisition for Investment. Buyer represents and warrants that the Acquired Securities to be purchased by Buyer pursuant to the terms of this Agreement shall be acquired by it in good faith for investment for its own account and not with a view to, or for resale in connection with, a

distribution or other disposition of any of such Acquired Securities in violation of the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”) or the securities laws or regulations of any state or other jurisdiction in the United States or any other applicable law.

3.8 Acknowledgements. Buyer acknowledges that no Frost Group Shareholder has made nor does it make any representation or warranty, whether express or implied, with respect to the business, condition (financial or otherwise), properties, prospects or affairs of WPI or with respect to the value of any of the Acquired Securities, and no Frost Group Shareholder has any obligation to Buyer, whether express or implied, including without limitation, fiduciary obligations, except as expressly set forth in this Agreement.

ARTICLE IV

COVENANTS AND AGREEMENTS

4.1 Conditions. All of the parties hereto will use best efforts to cause all of the closing conditions contained in Articles V and VI to be satisfied as soon as possible and to consummate the transactions contemplated hereof promptly (and, in any event, within three days) after satisfaction of such party’s respective closing conditions.

4.2 Exclusive Dealing. During the period from the date of this Agreement through the Closing or the earlier termination of this Agreement pursuant to Section 8.1, each Frost Group Shareholder agrees to not take, directly or indirectly, any action to solicit, encourage, initiate, or engage in discussions or negotiations with, or provide any information to, any person (other than Buyer) relating to or concerning any purchase of any of the Acquired Securities or otherwise sell or offer for sale any Acquired Securities or any rights or options therein.

4.3 Confidentiality. Buyer and the Frost Group Shareholders agree that all confidential and proprietary information and data obtained by any such party or any affiliate thereof (including their representatives and agents) from the other, whether in writing or verbally, shall be kept in strict confidence and not disclosed to any third party for a period of five years from the date of this Agreement, except as reasonably necessary to comply with any applicable law or regulation.

4.4 Escrow Securities.

(a) Buyer shall cause the Escrow Warrants to be exercised (including at Buyer’s option via so-called “cashless” exercise) immediately prior to the earlier of (i) the consummation of a Sale of WPI (as defined in the Notes) or (ii) the date of expiration of such Escrow Warrants by their terms; provided that in each case Buyer shall have no obligation to cause such Escrow Warrants to be exercised if, on the date of such exercise, the per share fair market value of the WPI Common Stock, as determined pursuant to the terms of the Warrant agreement for the Escrow Warrants, is less than the per share exercise price of the Escrow Warrants (i.e., the warrants are not “in the money”); provided further that the provisions of this Section shall not apply in the event that any of the Frost Group Shareholders or their affiliates are in violation of the Standstill Agreement.

(b) In the event of a Sale of WPI (as defined in the Notes), Buyer shall cause all Escrow Shares to be treated in the same manner as all other shares of WPI Common Stock in such Sale transaction.

4.5 Legend. Buyer is aware of and acknowledges that the Acquired Shares have not been registered under the Securities Act or the securities laws of any state or other jurisdiction in the United States and are being sold by the Frost Group Shareholders and acquired by the Buyer in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Buyer will comply

with the applicable securities laws in connection with the purchase of the Acquired Securities hereunder and any further sale or transfer of any of the Acquired Securities in the future. Buyer acknowledges that each certificate representing Acquired Shares sold pursuant to the provisions hereof, bears and, if deemed advisable by WPI, shall bear a legend substantially to the following effect:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF EXEMPTION THEREFROM UNDER SAID ACT OR THE RULES AND REGULATIONS PROMULGATED THEREUNDER.”

ARTICLE V

CONDITIONS PRECEDENT TO
OBLIGATION OF THE BUYER TO CLOSE

The obligation of the Buyer to complete the Closing is subject to the fulfillment on or prior to the Closing Date of the following conditions, any of which may be waived by the Buyer only in writing:

5.1 Representations and Warranties. The representations and warranties of the Frost Group Shareholders contained in this Agreement shall be true and correct in all respects on and as of the Closing Date. The Frost Group Shareholders shall have performed and complied with all covenants and agreements required by this Agreement to be performed or complied with on or prior to the Closing Date.

5.2 Litigation. No action, suit or proceeding before any court or governmental or regulatory body, shall have been commenced, instituted or threatened against any of the Frost Group Shareholders, or Buyer or any of their respective affiliates, to restrain or prevent the carrying out of the transactions contemplated by this Agreement or to seek damages in connection with such transactions.

ARTICLE VI

CONDITIONS PRECEDENT TO
OBLIGATION OF THE SHAREHOLDERS TO CLOSE

The obligation of the Frost Group Shareholders to complete the Closing is subject to the fulfillment, on or prior to the Closing Date, of the following conditions, any of which may be waived by the Frost Group Shareholders:

6.1 Representations and Warranties. The representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date. Buyer shall have performed and complied with all covenants and agreements required by this Agreement to be performed or complied with by Buyer on or prior to the Closing Date.

6.2 Litigation. No action, suit or proceeding before any court or governmental or regulatory body, shall have been commenced, instituted or threatened against any of the Frost Group Shareholders, to restrain or prevent the carrying out of the transactions contemplated by this Agreement or to seek damages in connection with such transactions.

ARTICLE VII

INDEMNIFICATION

If written notice of a claim has been given in good faith prior to the expiration of the applicable representation and warranty in accordance with this Agreement, then the relevant representations and warranties shall survive as to such claim until the claim has been finally resolved. Neither the period of survival nor the liability of a party with respect to the representations and warranties shall be reduced by any investigation made by another party or knowledge of another party. This Article VII is the exclusive monetary remedy for violations or breaches of this Agreement.

7.1 Survival. The representations and warranties contained in this Agreement shall survive the Closing indefinitely or until the statute of limitations applicable to such matter has expired.

7.2 Indemnification by the Frost Group Shareholders. Each of the Frost Group Shareholders, severally, with respect to itself only, shall indemnify, defend, reimburse and hold harmless Buyer (which terms shall include, for purposes of this Article VII, its respective successors, assigns, managers, members, officers, employees and agents) from and against any and all losses, damages, deficiencies, suits, claims, demands, judgments, costs, expenses or other liabilities (including without limitation reasonable attorneys’ fees and expenses) (“Losses”) resulting from, arising from, or relating to (i) any breach of a representation or warranty made by such Frost Group Shareholder and contained in Article II of this Agreement and (ii) any failure by such Frost Group Shareholder to perform or comply with any agreement or obligation of such Frost Group Shareholder contained in this Agreement. Notwithstanding anything to the contrary contained in this Agreement, in no event shall any Frost Group Shareholder have liability for any Losses in excess of the actual amount of cash received from the Buyer under this Agreement.

7.3 Indemnification by Buyer. Buyer shall indemnify, defend, reimburse and hold harmless each of the Frost Group Shareholders (which terms shall include, for purposes of this Article VII, any of their respective successors, assigns, managers, members, officers, employees and agents) from and against any and all Losses resulting from, arising from, or relating to (i) any breach of a representation or warranty of Buyer contained in Article III of this Agreement and (ii) any failure by Buyer to perform or comply with any agreement or obligation contained in this Agreement.

7.4 Procedures.

(a) A party seeking indemnification pursuant to Sections 7.2 or 7.3 (an “Indemnified Party”) shall give prompt notice to the party from whom such indemnification is sought (the “Indemnifying Party”) of the assertion of any claim or assessment, or the commencement of any action, suit, audit or proceeding, by a third party in respect of which indemnity may be sought hereunder (a “Third Party Claim”) and will give the Indemnifying Party such information with respect thereto as the Indemnifying Party may reasonably request, but no failure to give such notice shall relieve the Indemnifying Party of any liability hereunder (except to the extent the Indemnifying Party has suffered actual prejudice thereby). Notice may be given to any Frost Group Shareholder by giving notice to the Representative (defined below). The Indemnifying Party shall have the right, exercisable by written notice (the “Notice”) to the Indemnified Party within fifteen (15) days of receipt of notice from the Indemnified Party of the commencement or assertion of any Third Party Claim, to assume the defense of such Third Party Claim, using counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party. If the Indemnifying Party shall fail to assume the defense of the Third Party Claim within such fifteen (15) day period, the Indemnified Party shall have the right to undertake the defense of such Third Party Claim on behalf of the Indemnifying Party. If the Indemnifying Party elects to assume the defense of any such Third Party Claim, the Indemnified Party shall not admit any liability with respect

to, or settle, compromise or discharge such Third Party Claim without the Indemnifying Party’s prior written consent, which shall not be unreasonably withheld. In the event that the Indemnifying Party does not elect to assume the defense of any such Third Party Claim, the Indemnified Party may do any of the foregoing and/or defend such Third Party Claim, all at the expense and on the account of the Indemnifying Party.

(b) The Indemnifying Party or the Indemnified Party, as the case may be, shall in any event have the right to participate, at its own expense, in the defense of any Third Party Claim which the other is defending.

(c) The Indemnifying Party, if it shall have assumed the defense of any Third Party Claim in accordance with the terms hereof, shall have the right, upon fifteen (15) business days prior written notice to the Indemnified Party, to consent to the entry of judgment with respect to, or otherwise settle such Third Party Claim provided the Indemnifying Party shall be solely obligated to satisfy and discharge such judgment or settlement, unless (i) the Third Party Claim involves equitable or other non-monetary damages or (ii) in the reasonable judgment of the Indemnified Party such settlement would have a continuing material adverse effect on the Indemnified Party, in which case such settlement only may be made with the written consent of the Indemnified Party.

(d) Whether or not the Indemnifying Party chooses to defend or prosecute any claim involving a third party, all the parties hereto shall cooperate in the defense or prosecution thereof and shall furnish records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours afforded to the Indemnifying Party of records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith.

ARTICLE VIII

TERMINATION OF AGREEMENT

8.1 Termination. This Agreement may be terminated prior to the Closing as follows:

(a) at the election of any Frost Group Shareholder, in the event that Buyer shall have materially breached any representation, warranty, covenant or agreement contained in this Agreement or in any document or other paper delivered pursuant to this Agreement;

(b) at the election of Buyer, in the event that any Frost Group Shareholder shall have materially breached any representation, warranty, covenant or agreement contained in this Agreement or in any document or other paper delivered pursuant to this Agreement;

(c) at the election of any Frost Group Shareholder or Buyer, if any legal proceeding is commenced or threatened by any governmental or regulatory body or other person seeking to prevent the Closing or consummation of any transaction contemplated by this Agreement, and either such Frost Group Shareholder or Buyer, as the case may be, reasonably and in good faith deems it impractical or inadvisable to proceed in view of such legal proceeding or threat thereof;

(d) by any Frost Group Shareholder or Buyer, in the event that the Closing has not occurred by May 31, 2010; and

(e) at any time on or prior to the Closing Date, by mutual written consent of the Frost Group Shareholders and Buyer.

8.2 Post-Termination Obligations. A party shall be liable for any violation of representations, warranties, covenants or agreements of such party contained in this Agreement which violation directly or indirectly led to termination hereunder.

ARTICLE IX

MISCELLANEOUS

9.1 Representative. Each of the Frost Group Shareholders, by the execution of this Agreement, hereby irrevocably appoints Frost Gamma Investments Trust, a Florida trust (the “Representative”), as the agent, proxy and attorney-in-fact for such Frost Group Shareholder for purposes of the following actions, decisions and/or exercises of discretion in connection with this Agreement: (i) to authorize the release of, and other actions, decisions and/or exercises of discretion affecting, the Escrow Securities; (ii) to negotiate, settle, compromise and otherwise handle all claims made by Buyer pursuant to this Agreement and the Ancillary Instruments; and (iii) to give and receive after the Closing all notices required to be given and to do each and every act and exercise any and all rights which each Frost Group Shareholder collectively are permitted or required to do or exercise under this Agreement and the Ancillary Instruments. Each of the Frost Group Shareholders agrees that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of the Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Frost Group Shareholder. Each Frost Group Shareholder acknowledges and agrees that upon execution of this Agreement, any delivery by the Representative of any waiver, amendment, agreement, opinion, certificate or other documents executed by the Representative or any decisions made by the Representative pursuant to this Section 9.1, such Frost Group Shareholder shall be bound by such documents or decisions as fully as if such Frost Group Shareholder had executed and delivered such documents or made such decisions. The Buyer shall be entitled to rely upon the actions of Representative.

9.2 Further Action. If, at any time following the Closing, any further action is determined by Buyer to be necessary or desirable to vest in Buyer all right, title and interest in and to the Acquired Securities, each Frost Group Shareholder shall take such action.

9.3 Announcements. None of the parties hereto shall issue any press release, place any advertisement or make any other public statement relating to or in connection with this Agreement or the matters contained herein without obtaining the prior approval of all parties hereto as to the content and manner of presentation and publication thereof, which approval shall not be unreasonably withheld or delayed; provided, however, that disclosures required by law or regulation are permitted without consent.

9.4 Assignment; Parties in Interest. Except as expressly provided herein, the rights and obligations of a party hereunder may not be assigned, transferred or encumbered without the prior written consent of the other parties. The Buyer may assign its rights and obligations hereunder, to any direct or indirect subsidiary or other entity controlled by the Buyer, or to any parent corporation of the Buyer, for purposes of consummating the transactions contemplated herein. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the respective successors and permitted assigns of the parties hereto.

9.5 Law Governing Agreement. This Agreement shall be construed and interpreted according to the internal laws of the State of New York, excluding any choice of law rules that may direct the application of the laws of another jurisdiction.

9.6 Amendment and Modification. The parties may amend, modify and supplement this Agreement in such manner as may be agreed upon in writing among them.

9.7 Notice. Unless otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement will be in writing and will be conclusively deemed to have been duly given (i) when hand delivered to the other parties; (ii) upon receipt, when sent by facsimile to the number set forth below or email to the address set forth below; (iii) five business days after deposit in the U.S. mail, postage prepaid and addressed to the other parties at the address set forth below; or (iv) the next business day after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next business day delivery guaranteed. Each person making a communication hereunder by facsimile or email will promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile or email pursuant hereto but the absence of such confirmation will not affect the validity of any such communication. A party may change or supplement the addresses given below, or designate additional addresses for purposes of this Section 9.7, by giving the other party written notice of the new address in the manner set forth above:

(a)

If to the Buyer, to:

100 Fairway Drive
Suite 134
Vernon Hills, Illinois 60061
Attention: Joel E. Bernstein, M.D.
Facsimile: (847) 362-0794
E-mail: joel@winstonlabs.com

with a copy to:

Levenfeld Pearlstein, LLC
2 North LaSalle Street, Suite 1300
Chicago, Illinois 60602
Attention: Russell I. Shapiro
Facsimile: (312) 346-8434
E-mail: rshapiro@lplegal.com

(b)

If to any Frost Group Shareholders, to the address set forth on Schedule I hereto:

with a copy to:

Steven D. Rubin
4400 Biscayne Boulevard
Miami, Florida 33137
Facsimile: (305) 575-6444
E-mail: sr@thefrostgrp.com

9.8 Expenses. Regardless of whether or not the transactions contemplated hereby are consummated, Buyer shall bear its legal and other expenses and the expenses of its agents in connection with the transactions contemplated hereby, and the Frost Group Shareholders personally shall bear their legal and other expenses and the expenses of each of their agents in connection with the transactions contemplated hereby.

9.9 Entire Agreement. This Agreement, including the Exhibits and Schedules attached hereto (which Exhibits and Schedules are hereby incorporated herein by reference and made a part hereof) and the Ancillary Instruments, embody the entire agreement among the parties with respect to the

transactions contemplated hereby, and supersedes all prior agreements and understandings among the parties with respect thereto including the Letter of Intent.

9.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.11 Headings. The table of contents and article and section headings herein are for convenience of reference only, do not constitute a part of this Agreement, and shall not be deemed to limit or affect any of the provisions hereof.

9.12 Jurisdiction; Service; Jury Waiver. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement shall be brought against any of the parties only in the courts of the State of New York, City of New York, Borough of Manhattan, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. THE PARTIES HERETO WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT.

[Signatures on the following page]

IN WITNESS WHEREOF, the parties hereto have cause their duly authorized representatives to execute this Agreement as of the date first above written.


	BUYER PHARMACEUTICAL FINANCIAL SYNDICATE, LLC
	By:
		Joel E. Bernstein, M.D., Manager


	FROST GROUP SHAREHOLDERS FIRST GAMMA INVESTMENTS TRUST
	By:
		Phillip Frost, M.D., Trustee



	Subbarao Uppaluri, Ph.D.



	Steven D. Rubin



	Jane Hsiao, Ph.D.

	SOLELY WITH RESPECT TO THE PROVISIONS OF SECTION 1.5(a)(ii) OF THIS AGREEMENT:

	Subbarao Uppaluri, Ph.D.



	Glenn Halpryn



	Curtis Lockshin

[Signature page to the Stock Purchase Agreement]

Exhibits and Schedules to Stock Purchase Agreement


Exhibit		Description

1.2(b)		Non-Recourse Promissory Note
1.3		Escrow Agreement
1.5(c)(ii)		Standstill Agreement
1.5(c)(iii)		Registration Rights Agreement
1.5(c)(iv)		Mutual Release and Non-Disparagement Agreement


Schedule

I		Security Holdings

SCHEDULE I

Security Holdings


	Number of		Number of
Security Holder	Shares		Warrants		Cash		Notes

Frost Gamma		17,794,862		8,779,797	$	764,721.37	$	9,941,377.76
Investments Trust pf@thefrostgrp.com

Subbarao Uppaluri		209,449		89,589	$	8,862.82	$	115,216.68
ru@thefrostgrp.com

Steven D. Rubin		209,449		89,589	$	8,862.82	$	115,216.68
sr@thefrostgrp.com

Jane Hsiao		185,511		0	$	7,052.99	$	91,688.87
jh@thefrostgrp.com

The address for each of these shareholders is 4400 Biscayne Boulevard, Suite 1500, Miami, Florida 33137. Facsimile number is (305) 575-6444

EX-99.2 3 c01754exv99w2.htm EXHIBIT 2 Exhibit 2

Exhibit 2

EXECUTION COPY

ESCROW AGREEMENT

This Escrow Agreement, dated as of May 19, 2010 (the “Agreement”), is by and among Pharmaceutical Financial Syndicate, LLC, a Delaware limited liability company (“Buyer”), Frost Gamma Investments Trust, a Florida trust, as a shareholder and as the “Representative” pursuant to this Agreement, Subbarao Uppaluri, Steven D. Rubin and Jane Hsiao (collectively, the “Frost Group Shareholders” and individually, a “Frost Group Shareholder”) (the Frost Group Shareholders and together with Buyer, sometimes referred to individually as “Party” or collectively as the “Parties”) and Wells Fargo Bank, National Association, as escrow agent (“Escrow Agent”). Capitalized terms used in this Agreement but not otherwise defined shall have the respective meanings ascribed to such terms in the Stock Purchase Agreement, dated as of May 19, 2010 (the “Stock Purchase Agreement”), by and among Buyer and the Frost Group Shareholders.

WHEREAS, pursuant to the Stock Purchase Agreement, Buyer will acquire shares of common stock and warrants for shares of common stock of Winston Pharmaceuticals, Inc. (“WPI”) for cash consideration and the issuance of non-recourse promissory notes in the aggregate original principal amount of $10,263,500 (collectively, the “Notes”).

WHEREAS, pursuant to the Stock Purchase Agreement, Buyer will acquire 7.143% of the Acquired Securities outright and 92.857% of the Acquired Securities (consisting of 17,085,011 shares of common stock and 8,319,035 warrants) will be placed in the escrow established by this Agreement. Acquired Securities placed in escrow are referred to as “Escrow Securities” and will be released from escrow against payment (including partial payment) of the Notes as set forth herein.

WHEREAS, Escrow Agent has agreed to accept, hold, administer and disburse the securities and funds deposited with it and the earnings thereon in accordance with the terms of this Agreement.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

Section 1. Definitions

The following terms shall have the following meanings when used in this Agreement:

“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which the Escrow Agent located at the notice address set forth in Section 11 is authorized or required by law or executive order to remain closed.

“Escrow Securities” means common shares and warrants for common shares of WPI deposited with Escrow Agent (initially being 17,085,011 and 8,319,035, respectively) (the “Escrow Deposit”), together with Escrow Income.

“Escrow Income” means any interest, dividends or income or proceeds that may accrue on the Escrow Deposit and the Escrow Funds.

“Escrow Funds” means amounts payable under the Notes.

“Joint Written Direction” means a written direction executed by Representative and an authorized officer of Buyer directing Escrow Agent to take or refrain from taking any action pursuant to this Agreement.

Section 2. Establishment of Escrow Accounts

(a) The Frost Group Shareholders and Buyer hereby appoint Escrow Agent to serve as escrow agent hereunder. Escrow Agent hereby accepts such appointment and, upon receipt of the Escrow Deposit, agrees to hold, invest and disburse the Escrow Securities in accordance with this Agreement.

(b) On the date of this Agreement, each of the Frost Group Shareholders will, in satisfaction of its obligations to the Buyer under the Stock Purchase Agreement, transfer the Escrow Deposit to Escrow Agent by depositing with Escrow Agent certificates for all of the Escrow Securities, with stock powers assigning the Escrow Securities to Buyer.

(c) Escrow Agent shall establish a special escrow account, shall keep such account separate and apart from all other funds and assets held by it, and shall hold the Escrow Securities in escrow and administer the Escrow Securities pursuant to the terms and conditions of this Agreement.

(d) The Escrow Funds shall be deposited by Buyer with Escrow Agent and held in the separate account.

(e) The Escrow Securities and Escrow Funds are referred to herein as the “Escrow”.

(f) Except to the extent that and until Representative (on behalf of the Frost Group Shareholders) or Buyer is or becomes expressly entitled to a distribution of all or a portion of the Escrow pursuant to the terms of this Agreement, the Frost Group Shareholders and Buyer intend, and hereby inform Escrow Agent, that the Escrow shall constitute an escrow account in which neither the Frost Group Shareholders nor Buyer nor their respective creditors have any legal or equitable right, title or interest of any kind whatsoever, except for such rights, title and interests as are expressly conveyed by the terms and conditions of this Agreement.

Section 3. Claims Against the Escrow, Voting and Sale of Escrow Securities

(a) It is agreed that Representative and Buyer shall authorize the Escrow Agent to release all of the Escrow Securities with stock powers to Buyer upon payment of the entire principal balance and all accrued interest under the Notes.

(b) It is agreed that Representative and Buyer shall authorize the Escrow Agent from time to time to release a pro rata portion of the Escrow Securities to Buyer upon payment of a portion, but less than all, of the principal balance of the Notes (together with all accrued interest). The amount of Escrow Securities to be released upon any partial payment shall be calculated by Representative and Buyer as follows: (i) amount of partial principal payment, divided by (ii) the original principal amount, multiplied by (iii) the number of Escrow Securities originally deposited. The Escrow Securities released will be divided between common shares and warrants in the proportion the same where originally deposited into Escrow. All payments under the Notes shall be deposited into Escrow and will be released to the Representative following release to Buyer of the requisite amount of Escrow Securities.

(c) It is agreed that in the event that there is an Event of Default under the Notes (as defined in the Notes), Representative and Buyer shall authorize the Escrow Agent to convey the then remaining Escrow Securities to Representative; said conveyance shall be considered to be in full satisfaction of the outstanding balance of the Notes.

(d) It is agreed that Representative and Buyer shall authorize the Escrow Agent to release all or any portion of the Escrow Securities that Buyer desires be sold (in an underwritten public offering or

otherwise), provided that the price obtained is based on a per share common stock price of at least the per share Purchase Price as set forth in the Stock Purchase Agreement, subject to adjustment in the event of any stock splits or combinations, stock dividends or distributions, or similar transactions involving the Acquired Securities. Additionally, in the event of an underwritten offering of WPI, Representative shall have the right to cause the sale of some or all of the Escrowed Securities in such offering and, in such case, it is agreed that Representative and Buyer shall authorize the Escrow Agent to release such number of Escrowed Securities that the Buyer desires to be sold in the underwritten public offering. In either such event, proceeds of the sale would be used to pay accrued but unpaid interest and then principal under the Notes. All such proceeds would be deposited into Escrow and released to Representative immediately after deposit.

(e) Buyer and Representative agree to promptly authorize the Escrow Agent to take action consistent with paragraphs (a), (b), (c) and (d), above, and the Escrow Agent shall make disbursements upon receipt of:

(1) a Joint Written Direction (not to be unreasonably withheld or delayed by either Party); or

(2) a copy of a final and non-appealable determination or award rendered by an arbitrator, arbitration panel or court with jurisdiction over the matter (an “Award Notice”), stating that the amount referred to in such Award Notice is payable as provided in such determination or award. An Award Notice shall be accompanied by a letter from counsel to the presenting Party that such determination or award is final, non-appealable and issued under competent jurisdiction.

(f) The Parties hereby agree to use reasonable efforts to resolve any disputes or objections relating to a request for a disbursement of any or all of the Escrow Securities and will work in good faith to timely deliver a Joint Written Direction (or resolve any disputes with respect thereto) in connection with a disbursement of any or all or the Escrow Securities.

(g) It is agreed that (i) Buyer shall have the right to vote all of the Escrow Securities on any and all matters and (ii) any dividends payable with respect to the Acquired Securities shall be considered Escrow Income and shall remain in the escrow account until disbursements are made pursuant to this Agreement.

(h) The Escrow Agent’s sole obligation with respect to the Escrow Securities shall be to deliver such Escrow Securities and associated stock powers to the appropriate party (if the entire amount of such Escrow Securities are being released) or to deliver such Escrow Securities and associated stock powers to the WPI along with appropriate instructions to (i) issue new certificates in the name of the person or party in the amount of shares such person or party is entitled to receive and (ii) issue new certificates in the name of Buyer for the balance of such Escrow Securities. The Representative agrees to deposit new associated stock powers in the event of another partial distribution of Escrow Securities. The Escrow Agent shall have no liability in the event of any mistake, delay or failure to act on the part of the stock transfer agent with respect to the Escrow Securities.

(i) Pursuant to Section 4.4(a) of the Stock Purchase Agreement, Buyer shall cause the Escrow Securities consisting of warrants to be exercised (including at Buyer’s option via so-called “cashless” exercise) immediately prior to the earlier of (i) the consummation of a Sale of WPI (as defined in the Notes) or (ii) the date of expiration of such warrants by their terms; provided that in each case Buyer shall have no obligation to cause such warrants to be exercised if, on the date of such exercise, the per share value of WPI common stock, as determined in good faith by the board of directors of WPI, is less than the per share exercise price of such warrants (i.e., the warrants are not “in the money”).

(j) Pursuant to Section 4.4(b) of the Stock Purchase Agreement, in the event of a Sale of WPI (as defined in the Notes), Buyer shall cause all Escrow Securities consisting of shares of common stock to be treated in the same manner as all other shares of WPI Common Stock in such Sale transaction. Upon such a Sale of WPI, Buyer and Representative agree to promptly authorize the Escrow Agent to take action consistent with this paragraph (j).

Section 4. Investment

During the term of this Agreement, any cash portion of the Escrow shall be invested in a money market mutual fund, including without limitation a Wells Fargo Advantage Funds Money Market Fund selected by Buyer and Representative and as set forth in Schedule 1 attached hereto, and as shall be acceptable to the Escrow Agent, based upon prospectuses previously delivered upon request to Buyer and Representative. Written investment instructions from Representative and Buyer, if any, shall specify the type and identity of the investments to be purchased and/or sold. The Escrow Agent is hereby authorized to execute purchases and sales of investments through the facilities of its own trading or capital markets operations or those of any affiliated entity. Representative and Buyer recognize and agree that the Escrow Agent will not provide supervision, recommendations or advice relating to either the investment of moneys held in the Escrow Fund or the purchase, sale, retention or other disposition of any investment described herein. Escrow Agent shall not have any liability for any loss sustained as a result of any investment in an investment made pursuant to the terms of this Agreement or as a result of any liquidation of any investment prior to its maturity or for the failure of Representative and Buyer to give the Escrow Agent instructions to invest or reinvest the Escrow Fund. Escrow Agent shall have the right to liquidate any investments held in order to provide funds necessary to make required payments under this Agreement. All Escrow Income belongs to the Frost Group Shareholders, and shall be disbursed to the Representative on behalf of the Frost Group Shareholders at the written instruction of the Representative.

Section 5. Full Release of Escrow and Representative Responsibilities

(a) When all Escrow Securities and other amounts have been released from Escrow, this Agreement shall automatically terminate; provided that Sections 8 and 9 shall survive the termination of this Agreement.

(b) Representative agrees that it shall be solely responsible for making the appropriate payments to the Frost Group Shareholders and that neither Buyer nor its affiliates shall have any liability whatsoever in connection with any such apportionment or distribution.

Section 6. Escrow Agent

(a) The Escrow Agent shall have only those duties as are specifically and expressly provided herein, which shall be deemed purely ministerial in nature, and no other duties shall be implied. The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any requirements to comply with, the terms and conditions of any other agreement, instrument or document between the Parties, in connection herewith, if any, including without limitation the Stock Purchase Agreement, nor shall the Escrow Agent be required to determine if any person or entity has complied with any such agreements, nor shall any additional obligations of the Escrow Agent be inferred from the terms of such agreements, even though reference thereto may be made in this Agreement. In the event of any conflict between the terms and provisions of this Agreement, those of the Stock Purchase Agreement, any schedule or exhibit attached to the Escrow Agreement, or any other agreement among the Parties, the terms and conditions of this Agreement shall control. The Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon any written notice, document, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the

proper Party or Parties without inquiry and without requiring substantiating evidence of any kind. Concurrent with the execution of this Agreement, the Representative and Buyer shall deliver a Certificate as to Authorized Signers substantially in the form of Schedule 2 to this Agreement to the Escrow Agent, which schedule may be executed in counterparts. The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. The Escrow Agent shall have no duty to solicit any payments which may be due it or the Fund, including, without limitation, the Escrow Deposit.

(b) The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it except to the extent that a final adjudication of a court of competent jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of any loss to any Party. The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through attorneys, and shall be liable only for its gross negligence or willful misconduct (as finally adjudicated in a court of competent jurisdiction) for any action taken or omitted by the Escrow Agent in accordance with the advice of counsel or other professionals retained or consulted by the Escrow Agent. The Escrow Agent may consult with counsel, accountants and other skilled persons to be selected and retained by it. In the event that the Escrow Agent shall be uncertain or believe there is some ambiguity as to its duties or rights hereunder or shall receive instructions, claims or demands from any party hereto which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in Escrow until it shall be given a direction in writing by the Buyer and the Representative which eliminates such ambiguity or uncertainty to the satisfaction of Escrow Agent or by a final and non-appealable order or judgment of a court of competent jurisdiction. Except in the event of willful misconduct or gross negligence of the Escrow Agent, the Parties agree to pursue any redress or recourse in connection with any dispute without making the Escrow Agent a party to the same. ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING, IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE FOR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE OF ANY KIND WHATSOEVER (INCLUDING BUT NOT LIMITED TO LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE AND REGARDLESS OF THE FORM OF ACTION.

Section 7. Succession

(a) The Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving thirty (30) days advance notice in writing of such resignation to the Parties specifying a date when such resignation shall take effect. If the Parties have failed to appoint a successor escrow agent prior to the expiration of thirty (30) days following receipt of the notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto. Escrow Agent’s sole responsibility after such thirty (30) day notice period expires shall be to hold the Escrow (without any obligation to reinvest the same) and to deliver the same to a designated substitute escrow agent, if any, or in accordance with the directions of a final order or judgment of a court of competent jurisdiction, at which time of delivery Escrow Agent’s obligations hereunder shall cease and terminate, subject to the provisions of Sections 8 and 9 hereunder. The Escrow Agent shall have the right to withhold an amount equal to any amount due and owing to the Escrow Agent, plus any costs and expenses the Escrow Agent shall reasonably believe may be incurred by the Escrow Agent in connection with the termination of this Agreement.

(b) Any entity into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any entity to which all or substantially all the escrow business may be

transferred, shall be the Escrow Agent under this Agreement without further act, any provision herein to the contrary notwithstanding.

(c) The Escrow Agent may be removed and discharged from its duties or obligations hereunder at any time whether or not for cause upon mutual agreement by the Parties and by delivery of a joint written notice from the Parties of such removal to the Escrow Agent specifying a date when such removal shall take effect and appointing a successor agent or providing for other appropriate relief. Escrow Agent’s sole responsibility after receipt of such joint written notice shall be to hold the Escrow (without any obligation to reinvest the same) and to deliver the same to a designated substitute escrow agent, if any, or in accordance with the directions of the joint written notice from the Parties, at which time of delivery Escrow Agent’s obligations hereunder shall cease and terminate, subject to the provisions of Sections 8 and 9 hereunder.

Section 8. Compensation and Reimbursement

Buyer and Representative agree to (i) pay the Escrow Agent’s fees in the amounts and on the dates specified in Exhibit A attached hereto, and (ii) pay or reimburse the Escrow Agent upon request for all expenses, disbursements and advances, including, without limitation reasonable attorney’s fees and expenses, incurred or made by it in connection with the preparation, negotiation, execution, performance, delivery, modification and termination of this Agreement. Buyer and Representative agree that the fees and expenses of the Escrow Agent pursuant to this Section 8 shall be borne equally by Buyer and Representative.

Section 9. Indemnity

The Parties shall jointly and severally indemnify, defend and save harmless the Escrow Agent and its affiliates and their respective successors, assigns, directors, officers, managers, attorneys, accountants, experts, agents and employees (the “indemnitees”) from and against any and all losses, damages, claims, liabilities, penalties, judgments, settlements, actions, suits, proceedings, litigation, investigations, costs or expenses (including, without limitation, the reasonable fees and expenses of outside counsel and experts and their staffs and all reasonable expense of document location, duplication and shipment) (collectively “Losses”) arising out of or in connection with (a) the Escrow Agent’s execution and performance of this Agreement, tax reporting or withholding, the enforcement of any rights or remedies under or in connection with this Agreement, or as may arise by reason of any act, omission or error of the indemnitee, except in the case of any indemnitee to the extent that such Losses are finally adjudicated by a court of competent jurisdiction to have been primarily caused by the gross negligence or willful misconduct of such indemnitee, or (b) its following any instructions or other directions, whether joint or singular, from the Parties, except to the extent that its following any such instruction or direction is expressly forbidden by the terms hereof. The Parties hereto acknowledge that the foregoing indemnities shall survive the resignation, replacement or removal of the Escrow Agent or the termination of this Agreement. The Parties hereby grant the Escrow Agent a lien on, right of set-off against and security interest in, the Fund for the payment of any claim for indemnification, fees, expenses and amounts due hereunder. In furtherance of the foregoing, the Escrow Agent is expressly authorized and directed, but shall not be obligated, to charge against and withdraw from the Escrow for its own account or for the account of an indemnitee any amounts finally determined to be due to the Escrow Agent or to an indemnitee under this Section 9. The obligations contained in this Section 9 shall survive the termination of this Agreement and the resignation, replacement or removal of the Escrow Agent.

Section 10. Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting

(a) Patriot Act Disclosure. Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires the Escrow Agent to implement reasonable procedures to verify the identity of any person that opens a new account with it. Accordingly, the Parties acknowledge that Section 326 of the USA PATRIOT Act and the Escrow Agent’s identity verification procedures require the Escrow Agent to obtain information which may be used to confirm the Parties identity including without limitation name, address and organizational documents (“identifying information”). The Parties agree to provide the Escrow Agent with and consent to the Escrow Agent obtaining from third parties any such identifying information required as a condition of opening an account with or using any service provided by the Escrow Agent.

(b) Taxpayer Identification Numbers (“TINs”). The Parties have provided the Escrow Agent with their respective fully executed Internal Revenue Service (“IRS”) W-9 and/or other required documentation.

(c) Tax Reporting. All cash Escrow Income or other cash income earned under this Agreement shall be allocated to the Frost Group Shareholders and all other Escrow Income earned under this Agreement shall be allocated to the Buyer and, in each case, reported, as and to the extent required by law, by the Escrow Agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned from the Escrow Income by the Frost Group Shareholders or Buyer, as the case may be, whether or not said income has been distributed during such year. Any income allocated to or reported as earnings against the Frost Group Shareholders shall be allocated and reported in accordance with Schedule 3 to this Agreement. Any other tax returns required to be filed with respect to the Escrow Income will be prepared and filed by Representative and/or Buyer with the IRS and any other taxing authority as required by law, including but not limited to any applicable reporting or withholding pursuant to the Foreign Investment in Real Property Tax Act (“FIRPTA”). Representative and Buyer acknowledge and agree that Escrow Agent shall have no responsibility for the preparation and/or filing of any tax return or any applicable FIRPTA reporting or withholding with respect to the Escrow Deposit or Escrow Income. In the absence of written direction from the Representative and Buyer, all proceeds of the Escrow Income shall be retained in the Escrow Income and reinvested from time to time by the Escrow Agent as provided in this Agreement. Escrow Agent shall withhold any taxes it deems appropriate, including but not limited to required withholding in the absence of proper tax documentation, and shall remit such taxes to the appropriate authorities.

Section 11. Notices

Unless otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement will be in writing and will be conclusively deemed to have been duly given (i) when hand delivered to the other parties; (ii) upon written confirmation of receipt, when sent by facsimile to the number set forth below or email to the address set forth below; (iii) five Business Days (as hereafter defined) after deposit in the U.S. mail, postage prepaid and addressed to the other parties at the address set forth below; or (iv) the next Business Day after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next Business Day delivery guaranteed. Each person making a communication hereunder by facsimile or email will promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile or email pursuant hereto but the absence of such confirmation will not affect the validity of any such communication. A party may change or supplement the addresses given below, or designate additional addresses for purposes of this Section 11, by giving the other parties written notice of the new address in the manner set forth above.


		If to Representative:		Frost Gamma Investments Trust
				4400 Biscayne Boulevard
				Miami, Florida 33137
				Facsimile: (305) 575-6444
				E-mail: pf@thefrostgrp.com

		With a copy to:		Steven D. Rubin
				4400 Biscayne Boulevard
				Miami, Florida 33137
				Facsimile: (305) 575-6444
				E-mail: sr@thefrostgrp.com

		If to Buyer:		Pharmaceutical Financial Syndicate, LLC
				100 Fairway Drive, Suite 134
				Vernon Hills, Illinois 60061
				Attn.: Joel E. Bernstein, M.D.
				Facsimile: (847) 362-0794
				E-mail: joel@winstonlabs.com

		With a copy to:		Levenfeld Pearlstein, LLC
				2 North La Salle Street, Suite 1300
				Chicago, Illinois 60602
				Attn: Russell Shapiro, Esq.
				Facsimile: (312) 346-8434
				E-mail: rshapiro@lplegal.com

		If to the Escrow Agent:		Wells Fargo Bank, National Association
				230 West Monroe, Suite 2900
				Chicago, IL 60606
				Attn.: Sara Bergthold, Corporate Trust Services
				Facsimile: (312) 726-2158
				E-mail: sara.e.bergthold@wellsfargo.com

In the event that the Escrow Agent, in its sole discretion, shall determine that an emergency exists, the Escrow Agent may use such other means of communication as the Escrow Agent deems appropriate.

Section 12. Compliance with Court Orders

In the event that any escrow property shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the property deposited under this Agreement, the Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that the Escrow Agent obeys or complies with any such writ, order or decree it shall not be liable to any of the parties hereto or to any other person, entity, firm or corporation, by reason of such compliance notwithstanding such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.

Section 13. Representative

Each of the Frost Group Shareholders, by the execution of this Agreement, hereby irrevocably appoints the Representative as the agent, proxy and attorney-in-fact for such Frost Group Shareholder for all purposes of this Agreement and the execution and performance hereof and thereof. Without limitation of the generality of the foregoing, Representative shall have the right, power and authority on behalf of each Frost Group Shareholder (a) to disburse any funds received to each Frost Group Shareholder; (b) to execute and deliver on behalf of each Frost Group Shareholder any amendment or waiver hereto; (c) to take all other actions to be taken by or on behalf of each Frost Group Shareholder in connection herewith, including authorizing the release of Escrow Securities; and (d) to give and receive all notices required to be given and to do each and every act and exercise any and all rights which each Frost Group Shareholder collectively are permitted or required to do or exercise under this Agreement. Each of the Frost Group Shareholders agrees that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of the Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Frost Group Shareholder. Each Frost Group Shareholder acknowledges and agrees that upon execution of this Agreement, any delivery by the Representative of any waiver, amendment, agreement, opinion, certificate or other documents executed by the Representative or any decisions made by the Representative pursuant to this Section 13, such Frost Group Shareholder shall be bound by such documents or decisions as fully as if such Frost Group Shareholder had executed and delivered such documents or made such decisions. The Buyer and the Escrow Agent shall be entitled to rely upon the actions of Representative.

Section 14. Miscellaneous

The provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by the Escrow Agent and the Parties. Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by the Escrow Agent or any Party, except as provided in Section 7, without the prior consent of the Escrow Agent and the other Parties. Buyer may, without the consent of the Escrow Agent or Representative, assign its rights hereunder, in whole or in part, to one or more Affiliates of Buyer which shall assume Buyer’s obligations and liabilities hereunder; provided, that Buyer provides written notice of such assignment to the Escrow Agent and Buyer’s assignee submits the required identifying information pursuant to the USA PATRIOT Act. This Agreement shall be construed and interpreted according to the internal laws of the State of New York, excluding any choice of law rules that may direct the application of the laws of another jurisdiction. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement shall be brought against any of the parties only in the courts of the State of New York, City of New York, Borough of Manhattan, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. THE PARTIES HERETO WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT. No party to this Agreement is liable to any other party for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of, acts of God, fire, war, terrorism, floods, strikes, electrical outages, equipment or transmission failure, or other causes reasonably beyond its control. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the parties to this Agreement may be transmitted by facsimile, and such facsimile will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces, and will be binding upon such party. If any provision of this Agreement is determined to be prohibited or unenforceable by reason of any applicable law of a jurisdiction, then such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without

invalidating the remaining provisions thereof, and any such prohibition or unenforceability in such jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. A person who is not a party to this Agreement shall have no right to enforce any term of this Agreement. The Parties represent, warrant and covenant that each document, notice, instruction or request provided by such Party to Escrow Agent shall comply with applicable laws and regulations. Where, however, the conflicting provisions of any such applicable law may be waived, they are hereby irrevocably waived by the parties hereto to the fullest extent permitted by law, to the end that this Agreement shall be enforced as written. Except as expressly provided in Section 9 above, nothing in this Agreement, whether express or implied, shall be construed to give to any person or entity other than the Escrow Agent and the Parties any legal or equitable right, remedy, interest or claim under or in respect of this Agreement or any funds escrowed hereunder.

[The next page is the signature page]

IN WITNESS WHEREOF, the parties have been duly executed this Agreement as of the date first above written.


	Pharmaceutical Financial Syndicate, LLC
	By
		Its


	Frost Gamma Investments Trust, a Florida trust
	By:
		Phillip Frost, M.D., Trustee


	Wells Fargo Bank, National Association, as Escrow Agent
	By
		Its


	Frost Group Shareholders:

	Subbarao Uppaluri




	Steven D. Rubin




	Jane Hsiao

[Signature page to the Escrow Agreement]

Schedule 1

Agency and Custody Account Direction
For Cash Balances

Direction to use Wells Fargo Advantage Funds for Cash Balances for the escrow account or accounts (the “Account”) established under the Agreement to which this Schedule 1 is attached.

The Escrow Agent is hereby directed to invest, as indicated below or as the undersigned shall direct further from time to time, all cash in the Account in the following money market portfolio of Wells Fargo Advantage Funds (the “Fund”) or another permitted investment of my choice (Check One):

o		Wells Fargo Advantage Funds, 100% Treasury Money Market Fund

o		Wells Fargo Advantage Funds, Government Money Market Fund

o		Wells Fargo Advantage Funds, Cash Investment Money Market Fund

o		Wells Fargo Advantage Funds, Prime Investment Money Market Fund

o		Wells Fargo Advantage Funds, Treasury Plus Money Market Fund

o		Wells Fargo Advantage Funds, Heritage Money Market Fund

o		Wells Fargo Advantage Funds, National Tax-Free Money Market Fund

The undersigned acknowledge that they have received, at their request, and reviewed the Fund’s prospectus and have determined that the Fund is an appropriate investment for the Account.

The undersigned understand from reading the Fund’s prospectus that Wells Fargo Funds Management, LLC (“Wells Fargo Funds Management”), a wholly-owned subsidiary of Wells Fargo & Company, provides investment advisory and other administrative services for the Wells Fargo Advantage Funds. Other affiliates of Wells Fargo & Company provide sub-advisory and other services for the Funds. Boston Financial Data Services serves as transfer agent for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member NASD/SIPC, an affiliate of Wells Fargo & Company. The undersigned also understand that Wells Fargo & Company will be paid, and its bank affiliates may be paid, fees for services to the Funds and that those fees may include Processing Organization fees as described in the Fund’s prospectus.

The undersigned understand that the Escrow Agent will not exclude amounts invested in the Fund from Account assets subject to fees under the Account agreement between us.

The undersigned understand that investments in the Fund are not obligations of, or endorsed or guaranteed by, Wells Fargo Bank or its affiliates and are not insured by the Federal Deposit Insurance Corporation.

The undersigned acknowledge that they have full power to direct investments of the Account.

The undersigned understand that they may change this direction at any time and that it shall continue in effect until revoked or modified by joint written notice of the undersigned to the Escrow Agent.

Representative and Buyer understand that if they choose to communicate this investment direction solely via facsimile, then the investment direction will be understood to be enforceable and binding.





Pharmaceutical Financial Syndicate, LLC				Frost Gamma Investments Trust



Date				Date

Schedule 2

Certificate as to Authorized Signatures

If to Buyer

The specimen signatures shown below are the specimen signatures of the individuals who have been designated as authorized representatives of Buyer and are authorized to initiate and approve transactions of all types for the escrow account or accounts established under the Agreement to which this Schedule 2 is attached, on behalf of Buyer.


	Name	Title	Signature

1.


2.


3.

If to Representative

The specimen signatures shown below are the specimen signatures of the individuals who have been designated as authorized representatives of Representative and are authorized to initiate and approve transactions of all types for the escrow account or accounts established under the Agreement to which this Schedule 2 is attached, on behalf of the Frost Group Shareholders.


	Name	Title	Signature

1.


2.


3.

Schedule 3

Frost Group Shareholders’ Pro-Rata Share of the Escrow


Name	TIN	Pro-Rata Share

Frost Gamma Investments Trust			96.86147766	%


Subbarao Uppaluri			1.12258664	%


Steven D. Rubin			1.12258664	%


Jane Hsiao			0.89334896	%

The address for each Frost Group Shareholder is:

4400 Biscayne Boulevard
Suite 1500
Miami, Florida 33137

Exhibit A

Escrow Agent’s Fees

ESCROW AGENT FEES


Acceptance and Initial Account Set-up Fee:		$	1,500

Initial Fees as they relate to Wells Fargo Bank acting in the capacity of Escrow Agent — includes examination of the document, acceptance of appointment; setting up of Account(s) and accounting records; coordination of receipt of funds for deposit to the Account(s); and due diligence performed on all parties to the agreements.


Annual Administration Fee:		$	3,500

For ordinary administration services as Escrow Agent and when funded — includes daily routine account management; investment transactions; cash transaction processing (including wires and check processing); monitoring claim notices pursuant to the agreement; disbursement of the funds in accordance with the agreement; and mailing of trust account statements to all applicable parties. Tax reporting is included for up to one (1) entity.

The Annual Administration Fee is payable annually in advance, with the first installment due at the time of Agreement execution. Except in the event of the resignation of the Escrow Agent, the Annual Administration Fee will not be prorated in case of early termination.


Out-of-Pocket Expenses:		Billable at Cost

We only charge for out-of-pocket expenses in response to specific tasks assigned by the client. Therefore, we cannot anticipate what specific out-of-pocket items will be needed or what corresponding expenses will be incurred. Possible expenses would be, but are not limited to, express mail and messenger charges, travel expenses to attend closing or other meetings. There are no charges for indirect out-of-pocket expenses.

EX-99.3 4 c01754exv99w3.htm EXHIBIT 3 Exhibit 3

Exhibit 3

EXECUTION COPY

NON-RECOURSE PROMISSORY NOTE (“Note”)



$9,941,377.76		May 19, 2010
		Chicago, Illinois

FOR VALUE RECEIVED, the undersigned, Pharmaceutical Financial Syndicate, LLC, a Delaware limited liability company (“Maker”), hereby promises to pay for the account of Frost Gamma Investments Trust, a Florida trust (the “Holder”), the principal sum of Nine Million, Nine Hundred Forty-One Thousand, Three Hundred Seventy-Seven and 76/100 Dollars ($9,941,377.76), together with interest, all as hereinafter set forth.

This Note is given pursuant to Section 1.2 of the Stock Purchase Agreement, dated May 19, 2010, between Maker, Holder and other parties (the “Stock Purchase Agreement”).

1. Interest. This Note shall bear interest at the rate of 2.82% per annum, compounded annually. Interest shall accrue and be payable on the Maturity Date.

2. Payments. Except as provided in Sections 3 and 5 hereof, the principal amount hereof and all accrued but unpaid interest shall be paid on the Maturity Date. The “Maturity Date” shall be the date of the first to occur of the following: (a) the date that is six months after sales commence in the United States of the Civamide Patch for PHN; (b) the date that is six months after sales commence in the United States of the Civamide Capsule for Crohn’s disease; (c) the date of consummation of any transaction pursuant to which one or more third parties acquires (i) fifty percent (50%) or more of the then outstanding voting securities of Winston Pharmaceuticals, Inc. or it successors and assigns (“WPI”) (whether by merger, stock sale or otherwise) or (ii) all or substantially all of the assets of WPI (any transaction described in (i) or (ii), a “Sale”), but in any case only if the aggregate proceeds from such Sale are equal to or greater than $80,000,000 in cash or freely-tradable securities of a publicly-traded issuer (any such transaction, a “Qualified Sale”) or (d) the date which is six years after the date of this Note.

3. Payment Prior to Maturity Date. The principal amount of this Note may be prepaid in whole or in part at any time during the term hereof, provided that any such prepayment shall include all accrued but unpaid interest on the amount prepaid. Holder shall not charge Maker any fee, premium or penalty for any such prepayment.

4. Escrow Securities and Payments into Escrow. Pursuant to the Stock Purchase Agreement, Escrow Securities (as defined in the Stock Purchase Agreement) have been put into escrow pursuant to the Escrow Agreement dated May 19, 2010 between Maker, Holder and Wells Fargo Bank, N.A. (the “Escrow Agreement”) to secure the payment of this Note. All payments under this Note shall be made into escrow and then released to Holder against release of Escrow Securities as provided in the Escrow Agreement.

5. Default Remedies. Any one of the following occurrences shall constitute an “Event of Default” under this Note:

(a) Failure by the Maker to make any payment of principal or interest within ten (10) days after the date such payment becomes due and payable.

(b) If Maker shall make an assignment for the benefit of its creditors, or shall seek a composition, readjustment, arrangement, liquidation, dissolution or insolvency proceeding under any present or future statute or law; or shall file a petition under the Federal Bankruptcy Code; or shall in any involuntary bankruptcy case commenced against it, file an answer admitting insolvency or inability to pay its debts as they become due, or shall fail to obtain a dismissal of such involuntary case within 60 days after its commencement; or be the subject of an order for relief in such bankruptcy case; or be adjudged a bankrupt or insolvent; or shall have a custodian, trustee or receiver appointed for, or have any court take jurisdiction of its property, or any part thereof in any proceeding for the purpose of reorganization, arrangement, dissolution or liquidation, and such custodian, trustee, liquidator or receiver shall not be discharged, or such jurisdiction shall not be relinquished, vacated or stayed within 60 days of the appointment.

(d) If there shall be a breach by any of Dr. Joel E. Bernstein, Carole Bernstein or WPI of their obligations under that certain Standstill Agreement, dated as of the date hereof, between Dr. Joel E. Bernstein, Carole Bernstein, WPI and the Frost Group Shareholders (the “Standstill Agreement”).

Upon the occurrence of any Event of Default hereunder, the entire outstanding principal balance and any unpaid interest or penalties then accrued under this Note, shall, at the option of Holder hereof, immediately become and be due and payable in full. IN SUCH EVENT, ALL ESCROW SECURITIES AND ESCROW FUNDS THEN REMAINING IN ESCROW SHALL BE RELEASED TO HOLDER IN FULL AND COMPLETE SATISFACTION OF THIS NOTE.

6. Application of Payments. Payments hereunder shall be applied first to interest, then to principal and then to any other amounts payable hereunder.

7. Captions. Any headings or captions in this Note are inserted for convenience of reference only. Such headings or captions shall not be deemed to constitute a part hereof, nor shall they be used to construe or interpret the provisions of this Note.

8. Waiver. No delay in the exercise of any right or remedy hereunder by Holder shall be deemed to be a waiver of such right or remedy, nor shall the exercise of any right or remedy hereunder by Holder be deemed an election of remedies or a waiver of any other right or remedy. No waiver or limitation of any right or remedy hereunder by Holder shall be effective unless (and any such waiver or limitation shall be effective only to the extent) expressly set forth in a writing, signed and delivered by Holder to Maker. No notice to or demand on Maker in any case shall entitle Maker to any other notice or demand in similar or other circumstances, nor shall such notice or demand constitute a waiver of any rights or remedy of Holder to any other or further actions.

9. Notices. Unless otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Note will be in writing and will be conclusively deemed to have been duly given (i) when hand delivered to the other party; (ii) upon receipt, when sent by facsimile to the number set forth below or email to the address set forth below; (iii) five business days after deposit in the U.S. mail, postage prepaid and addressed to the other party at the address set forth below; or (iv) the next business day after deposit with a national overnight delivery service, postage prepaid, addressed to the parties as set forth below with next business day delivery guaranteed. Each person making a communication hereunder by facsimile or email will promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by facsimile or email pursuant hereto but the absence of such confirmation will not affect the validity of any such communication. A party may change or supplement the addresses given below, or designate additional addresses for

purposes of this Section 9, by giving the other party written notice of the new address in the manner set forth above.


If to Maker:		Pharmaceutical Financial Syndicate, LLC 100 Fairway Drive Suite 134 Vernon Hills, Illinois 60061 Attn: Joel E. Bernstein, M.D. Facsimile: (847) 362-0794 E-mail: joel@winstonlabs.com

with a copy to:		Levenfeld Pearlstein, LLC 2 North LaSalle Street, Suite 1300 Chicago, Illinois 60602 Attn: Russell I. Shapiro Facsimile: (312) 346-8434 E-mail: rshapiro@lplegal.com

Holder:		Frost Gamma Investments Trust 4400 Biscayne Boulevard Suite 1500 Miami, Florida 33137 Facsimile: (305) 575-6444

with a copy to:		Steven D. Rubin 4400 Biscayne Boulevard Suite 1500 Miami, Florida 33137 Facsimile: (305) 575-6444 E-mail: sr@thefrostgrp.com

10. Time of the Essence. Time is hereby declared to be of the essence of this Note and of every part hereof.

11. Governing Law and Jurisdiction. This Note shall be construed and interpreted according to the internal laws of the State of New York, excluding any choice of law rules that may direct the application of the laws of another jurisdiction. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Note shall be brought against any of the parties only in the courts of the State of New York, City of New York, Borough of Manhattan, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. THE PARTIES HERETO WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS NOTE.

12. Severability. In the event any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event any one or more of the provisions of this Note operate or would prospectively operate to invalidate this Note, then, and in either of such events, such provision or provisions only shall be deemed null and void

and shall not affect any other provision of this Note and the retaining provisions of this Note shall remain operative and in full force and effect.

13. No Set-off. No act of commission or omission of any kind or at any time upon the part of the Holder in respect of any matter whatsoever shall in any way affect or impair the rights of the Holder to enforce any right, power or benefit under this Note, and no set-off, claim, reduction or diminution of any obligation or any defense of any kind or nature that Maker has or may have against the Holder shall affect the Holder’s right to enforce any right, power or benefit under this Note.

14. Non-Recourse. The Holder, by accepting this Note, acknowledges and agrees that this Note is solely an obligation of Maker and that the sole recourse of Holder to collect payment of this Note from and after the Maturity Date or following an Event of Default and the continuation thereof shall be limited to the Escrow Securities at the time remaining in and properly held in the escrow account in accordance with the Escrow Agreement, and Holder shall be entitled to seek specific performance of the Escrow Agreement in connection with such sole recourse. It is expressly declared that nothing herein shall create any personal obligation on the part or any member, manager, officer or agent of Maker, all such liability being expressly waived.

[Signatures begin on next page]

IN WITNESS WHEREOF, the Maker has executed this Note on the day and year first written above.


	MAKER: PHARMACEUTICAL FINANCIAL SYNDICATE, LLC, a Delaware limited liability company
	By:
		Joel E. Bernstein, M.D., Manager

ACCEPTED:

HOLDER


FROST GAMMA INVESTMENTS TRUST
By:
	Phillip Frost, M.D., Trustee

[Signature page to the Frost Gamma Investments Trust Promissory Note]

EX-99.4 5 c01754exv99w4.htm EXHIBIT 4 Exhibit 4

Exhibit 4

EXECUTION COPY

NON-RECOURSE PROMISSORY NOTE (“Note”)


$115,216.68		May 19, 2010
		Chicago, Illinois

FOR VALUE RECEIVED, the undersigned, Pharmaceutical Financial Syndicate, LLC, a Delaware limited liability company (“Maker”), hereby promises to pay for the account of Subbarao Uppaluri, an individual (the “Holder”), the principal sum of One Hundred Fifteen Thousand, Two Hundred Sixteen and 68/100 Dollars ($115,216.68), together with interest, all as hereinafter set forth.

This Note is given pursuant to Section 1.2 of the Stock Purchase Agreement, dated May 19, 2010, between Maker, Holder and other parties (the “Stock Purchase Agreement”).

1. Interest. This Note shall bear interest at the rate of 2.82% per annum, compounded annually. Interest shall accrue and be payable on the Maturity Date.

5. Default Remedies. Any one of the following occurrences shall constitute an “Event of Default” under this Note:

(a) Failure by the Maker to make any payment of principal or interest within ten (10) days after the date such payment becomes due and payable.

(b) If Maker shall make an assignment for the benefit of its creditors, or shall seek a composition, readjustment, arrangement, liquidation, dissolution or insolvency proceeding under any

present or future statute or law; or shall file a petition under the Federal Bankruptcy Code; or shall in any involuntary bankruptcy case commenced against it, file an answer admitting insolvency or inability to pay its debts as they become due, or shall fail to obtain a dismissal of such involuntary case within 60 days after its commencement; or be the subject of an order for relief in such bankruptcy case; or be adjudged a bankrupt or insolvent; or shall have a custodian, trustee or receiver appointed for, or have any court take jurisdiction of its property, or any part thereof in any proceeding for the purpose of reorganization, arrangement, dissolution or liquidation, and such custodian, trustee, liquidator or receiver shall not be discharged, or such jurisdiction shall not be relinquished, vacated or stayed within 60 days of the appointment.

6. Application of Payments. Payments hereunder shall be applied first to interest, then to principal and then to any other amounts payable hereunder.


If to Maker:		Pharmaceutical Financial Syndicate, LLC
		100 Fairway Drive
		Suite 134
		Vernon Hills, Illinois 60061
		Attn: Joel E. Bernstein, M.D.
		Facsimile: (847) 362-0794
		E-mail: joel@winstonlabs.com

with a copy to:		Levenfeld Pearlstein, LLC
		2 North LaSalle Street, Suite 1300
		Chicago, Illinois 60602
		Attn: Russell I. Shapiro
		Facsimile: (312) 346-8434
		E-mail: rshapiro@lplegal.com

Holder:		Subbarao Uppaluri
		4400 Biscayne Boulevard
		Suite 1500
		Miami, Florida 33137
		Facsimile: (305) 575-6444

with a copy to:		Steven D. Rubin
		4400 Biscayne Boulevard
		Suite 1500
		Miami, Florida 33137
		Facsimile: (305) 575-6444
		E-mail: sr@thefrostgrp.com

10. Time of the Essence. Time is hereby declared to be of the essence of this Note and of every part hereof.

[Signatures begin on next page]

IN WITNESS WHEREOF, the Maker has executed this Note on the day and year first written above.


	MAKER: PHARMACEUTICAL FINANCIAL SYNDICATE, LLC, a Delaware limited liability company
	By:
		Joel E. Bernstein, M.D., Manager

ACCEPTED:

HOLDER

Subbarao Uppaluri, Ph.D.

[Signature page to the Uppaluri Promissory Note]

EX-99.5 6 c01754exv99w5.htm EXHIBIT 5 Exhibit 5

Exhibit 5

EXECUTION COPY

NON-RECOURSE PROMISSORY NOTE (“Note”)


$115,216.68		May 19, 2010
		Chicago, Illinois

FOR VALUE RECEIVED, the undersigned, Pharmaceutical Financial Syndicate, LLC, a Delaware limited liability company (“Maker”), hereby promises to pay for the account of Steven D. Rubin, an individual (the “Holder”), the principal sum of One Hundred Fifteen Thousand, Two Hundred Sixteen and 68/100 Dollars ($115,216.68), together with interest, all as hereinafter set forth.

This Note is given pursuant to Section 1.2 of the Stock Purchase Agreement, dated May 19, 2010, between Maker, Holder and other parties (the “Stock Purchase Agreement”).

1. Interest. This Note shall bear interest at the rate of 2.82% per annum, compounded annually. Interest shall accrue and be payable on the Maturity Date.

5. Default Remedies. Any one of the following occurrences shall constitute an “Event of Default” under this Note:

(a) Failure by the Maker to make any payment of principal or interest within ten (10) days after the date such payment becomes due and payable.

(b) If Maker shall make an assignment for the benefit of its creditors, or shall seek a composition, readjustment, arrangement, liquidation, dissolution or insolvency proceeding under any

6. Application of Payments. Payments hereunder shall be applied first to interest, then to principal and then to any other amounts payable hereunder.


If to Maker:		Pharmaceutical Financial Syndicate, LLC
		100 Fairway Drive
		Suite 134
		Vernon Hills, Illinois 60061
		Attn: Joel E. Bernstein, M.D.
		Facsimile: (847) 362-0794
		E-mail: joel@winstonlabs.com

with a copy to:		Levenfeld Pearlstein, LLC
		2 North LaSalle Street, Suite 1300
		Chicago, Illinois 60602 Attn: Russell I. Shapiro
		Facsimile: (312) 346-8434 E-mail: rshapiro@lplegal.com

Holder:		Steven D. Rubin
		4400 Biscayne Boulevard
		Suite 1500
		Miami, Florida 33137
		Facsimile: (305) 575-6444
		E-mail: sr@thefrostgrp.com

10. Time of the Essence. Time is hereby declared to be of the essence of this Note and of every part hereof.

[Signatures begin on next page]

IN WITNESS WHEREOF, the Maker has executed this Note on the day and year first written above.


	MAKER: PHARMACEUTICAL FINANCIAL SYNDICATE, LLC, a Delaware limited liability company
	By:
		Joel E. Bernstein, M.D., Manager


ACCEPTED: HOLDER

Steven D. Rubin

[Signature page to the Rubin Promissory Note]

EX-99.6 7 c01754exv99w6.htm EXHIBIT 6 Exhibit 6

Exhibit 6

EXECUTION COPY

NON-RECOURSE PROMISSORY NOTE (“Note”)


$91,688.87		May 19, 2010 Chicago, Illinois

FOR VALUE RECEIVED, the undersigned, Pharmaceutical Financial Syndicate, LLC, a Delaware limited liability company (“Maker”), hereby promises to pay for the account of Jane Hsiao, an individual (the “Holder”), the principal sum of Ninety-One Thousand, Six Hundred Eighty-Eight and 87/100 Dollars ($91,688.87), together with interest, all as hereinafter set forth.

This Note is given pursuant to Section 1.2 of the Stock Purchase Agreement, dated May 19, 2010, between Maker, Holder and other parties (the “Stock Purchase Agreement”).

1. Interest. This Note shall bear interest at the rate of 2.82% per annum, compounded annually. Interest shall accrue and be payable on the Maturity Date.

5. Default Remedies. Any one of the following occurrences shall constitute an “Event of Default” under this Note:

(a) Failure by the Maker to make any payment of principal or interest within ten (10) days after the date such payment becomes due and payable.

(b) If Maker shall make an assignment for the benefit of its creditors, or shall seek a composition, readjustment, arrangement, liquidation, dissolution or insolvency proceeding under any

6. Application of Payments. Payments hereunder shall be applied first to interest, then to principal and then to any other amounts payable hereunder.


If to Maker:		Pharmaceutical Financial Syndicate, LLC 100 Fairway Drive Suite 134 Vernon Hills, Illinois 60061 Attn: Joel E. Bernstein, M.D. Facsimile: (847) 362-0794 E-mail: joel@winstonlabs.com

with a copy to:		Levenfeld Pearlstein, LLC 2 North LaSalle Street, Suite 1300 Chicago, Illinois 60602 Attn: Russell I. Shapiro Facsimile: (312) 346-8434 E-mail: rshapiro@lplegal.com

Holder:		Jane Hsiao 4400 Biscayne Boulevard Suite 1500 Miami, Florida 33137 Facsimile: (305) 575-6444

with a copy to:		Steven D. Rubin 4400 Biscayne Boulevard Suite 1500 Miami, Florida 33137 Facsimile: (305) 575-6444 E-mail: sr@thefrostgrp.com

10. Time of the Essence. Time is hereby declared to be of the essence of this Note and of every part hereof.

[Signatures begin on next page]

IN WITNESS WHEREOF, the Maker has executed this Note on the day and year first written above.


	MAKER: PHARMACEUTICAL FINANCIAL SYNDICATE, LLC, a Delaware limited liability company
	By:
		Joel E. Bernstein, M.D., Manager


ACCEPTED: HOLDER

Jane Hsiao, Ph.D.

[Signature page to the Hsiao Promissory Note]

EX-99.7 8 c01754exv99w7.htm EXHIBIT 7 Exhibit 7

Exhibit 7

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made effective as of May 19, 2010 by and among Winston Pharmaceuticals, Inc., a Delaware corporation (the “Company”), Pharmaceutical Financial Syndicate, LLC, a Delaware limited liability company (“PFS”), and each of Frost Gamma Investments Trust, Subbarao Uppaluri, Steven D. Rubin and Jane Hsiao (collectively, the “Frost Group Shareholders” and individually, a “Frost Group Shareholder”).

RECITALS

A. Simultaneous with the execution and delivery of this Agreement, PFS and the Frost Group Shareholders have entered into a Stock Purchase Agreement (the “SPA”) and Escrow Agreement (the “Escrow Agreement”) each dated as of May 19, 2010 pursuant to which PFS shall purchase from the Frost Group Shareholders an aggregate of 18,399,271 shares of the Company’s common stock (the “Covered Shares”) and warrants to purchase 8,958,975 shares of the Company’s common stock (the “Covered Warrants,” and together with the Covered Shares, the “Covered Securities”). For purposes of this Agreement, Covered Shares shall include any shares of the Company’s common stock acquired upon the exercise of any Covered Warrants and any shares of common stock issued in connection with a dividend, stock split, reclassification, recapitalization or other distribution with respect to, or in exchange for or in replacement of, any Covered Shares.

B. As partial consideration for the Covered Securities and pursuant to Section 1.2 of the SPA, PFS has executed non-recourse promissory notes in favor of the Frost Group Shareholders in the aggregate original principal amount of $10,263,500 (collectively, the “Notes”).

C. In order to secure satisfaction and payment of the obligations of PFS under the Notes, 92.857% of each of the Covered Shares and the Covered Warrants have been placed in Escrow and shall be subject to release in proportion to payment of principal payments under the Notes in accordance with the terms and conditions of the Escrow Agreement.

D. In order to facilitate the performance of the parties of their respective obligations under the SPA, the Escrow Agreement and the Notes, and in consideration of $25,000 in cash to be paid by PFS to the Company simultaneously with the purchase by PFS of the Covered Securities and the payment by PFS of the Company’s out-of-pocket expenses (including reasonably legal fees) in connection with this Agreement, the Company has agreed to grant certain registration rights with respect to the Covered Shares on the terms and conditions set forth herein.

Now, therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the undersigned parties, the undersigned parties hereto agree as follows:

1. Piggyback Registrations.

(a) Right to Piggyback. From and after the effective date of this Agreement until such time as none of the Covered Securities remain subject to the provisions of the Escrow Agreement, whenever the Company proposes to register any class of its common stock for sale under the Securities Act of 1933, as amended, for its own account or for the account of any holder of its securities (a “Piggyback Registration”), the Company shall give prompt written notice to PFS and each of the Frost Group Shareholders of its intention to effect such a registration and will provide the Frost Group Shareholders and PFS the opportunity to include in such registration up to one-half of the class of Covered Shares subject to the Escrow Agreement at the time of such Piggyback Registration, subject to the provisions of paragraph (c) below. If PFS or any Frost Group Shareholder desires to include in any such registration statement all or part of the Covered Shares in accordance with the provisions of Section 3 of the Escrow Agreement, he shall, within 20 days after receipt of the above-described notice from the Company, so notify the Company in writing (the “Election Notice”); provided, however, that PFS shall not have the right to include any

Covered Shares in a registration statement unless the price at which the Covered Shares are being offered obtained is at least the Purchase Price per share as set forth in the SPA, subject to adjustment in the event of any stock splits or combinations, stock dividends or distributions, or similar transactions involving the Covered Shares. Such Election Notice shall state the number of Covered Shares which such Frost Group Shareholder or PFS requests to be included in such registration. If PFS or any Frost Group Shareholder decides not to include all or any part of his Covered Shares in any registration statement filed by the Company, he shall nevertheless continue to have the right to include any Covered Shares in any subsequent registration statement or registration statements as may be filed by the Company, all upon the terms and conditions set forth herein.

(b) Piggyback Expenses. The Company shall pay all Registration Expenses (as such term is defined in Section 3 hereof) in all Piggyback Registrations.

(c) Priority on Primary Registration. If a Piggyback Registration is an underwritten registration of securities for the account of the Company, and the managing underwriters advise the Company in writing that, in their opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the Company, the Company shall include in such registration (i) first, the securities the Company proposes to sell, (ii) second, the Covered Shares to be included in such registration, and (iii) third, the securities of other stockholders that are not Covered Shares requested to be included in such registration, pro rata among the respective holders thereof on the basis of the amount of securities owned by each such holder.

(d) Priority on Secondary Registration. If a Piggyback Registration is an underwritten registration of securities for the account of holders of the Company’s securities, and the managing underwriters advise the Company in writing that, in their opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within the price range of the offering, the Company shall include in such registration (i) first, the Covered Shares to be included in such registration, and (ii) second, the securities of other stockholders that are not Covered Shares requested to be included in such registration, pro rata among the holders of such securities on the basis of the number of shares owned by each such holder.

(e) Selection of Underwriters. If any Piggyback Registration is an underwritten offering, the selection of investment banker(s) and manager(s) for the offering shall be made by the Company.

2. Registration Procedures.

(a) In connection with any Piggyback Registration, the Company shall use all reasonable commercially reasonable efforts to effect the sale of such Covered Shares to be offered in accordance with the intended method of disposition thereof. The registration statement filed in connection therewith shall (i) be available for the sale of the Covered Shares in accordance with the intended method or methods of distribution described therein, and (ii) comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be included therein or if permitted by the rules and forms of the SEC, incorporate such financial statements therein by reference. Before filing a registration statement or prospectus or any amendments or supplements thereto relating to a Piggyback Registration, the Company shall furnish to the parties to this Agreement copies of all such documents proposed to be filed, which documents shall be subject to the reasonable review and comment of such parties.

Additionally, the Company shall, as expeditiously as possible:

(b) notify the parties hereto of the effectiveness of each registration statement filed with the SEC in which PFS or the Frost Group Shareholders may be entitled to participate pursuant to this Agreement and (i) prepare and file with the SEC such amendments to any registration statement as may be necessary to keep any such registration statement effective for a period of time necessary to effect the distribution of the securities contemplated by such registration statement; (ii) cause the prospectus to such registration statement to be amended or supplemented as required and to be filed as required by Rule 424 or any similar

rule that may be adopted under the Securities Act; (iii) respond as promptly as practicable to any comments received from the SEC with respect to the registration statement or any amendment thereto; and (iv) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during the applicable period in accordance with the intended method or methods of distribution described therein.

(c) use all commercially reasonable efforts to register or qualify such Covered Shares, and to keep such registration or qualification effective during the period such registration statement is to be kept effective, under such other securities or blue sky laws or such jurisdictions as any underwriter requests and do any and all other acts and things which may be reasonably necessary or advisable to enable the disposition of the Covered Shares in such jurisdictions (provided that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 2(c), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction).

(d) promptly notify each party to this Agreement (i) when any amendment or supplement to the prospectus relating to a registration statement relating to Covered Shares has been filed with the SEC, (ii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of the registration statement or any part thereof or the initiation of any proceedings for that purpose, (iii) if the Company receives any notification with respect to the suspension of the qualification of the Covered Shares for offer or sale in any jurisdiction or the initiation of any proceeding for such purpose, and (iv) of the happening of any event during the period the registration statement is effective as a result of which (A) such registration statement contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading or (B) such prospectus as then amended or supplemented contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; and, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Covered Shares, such registration statement or prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading;

(e) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions reasonably requested by any underwriter in order to expedite or facilitate the disposition of such Covered Shares (including effecting a stock split or a combination of shares);

(f) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Covered Shares included in such registration statement for sale in any jurisdiction, the Company shall use all commercially reasonable efforts promptly to obtain the withdrawal of such order; and

(g) use all commercially reasonable efforts to obtain all legal opinions, auditors consents and comfort letters and experts cooperation as may be required, including furnishing to each underwriter of Covered Shares on the date the registration statement with respect to such Covered Shares becomes effective, (i) an opinion, dated as of the such date, of counsel for the Company and (ii) a “cold comfort” letter, dated as of such date, signed by the independent public accountants of the Company, in each case in form and substance as is customarily given to underwriters in an underwritten public offering.

3. Registration Expenses.

Expenses incident to the Company’s performance of or compliance with this Agreement, including all registration and filing fees, expenses and fees of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, fees and disbursements of custodians, and fees and disbursements of counsel for the Company and all independent certified public accounts, underwriters (excluding discounts and commissions) and other persons retained by the Company (all such expenses being herein called “Registration Expenses”), shall be borne by the Company, and the Company shall, in

any event, pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed. PFS and the Frost Group Shareholders shall be responsible for their own individual expenses with respect to a Piggyback Registration, including without limitation legal, accounting, investment banking or other professional management or advisory fees related to any advisors or counsel engaged by PFS or any Frost Group Shareholder and any discount or underwriting fees or commissions attendant to the Covered Shares.

4. Participation Requirements. In connection with any Piggyback Registration, each of PFS, the Frost Group Shareholders, and their respective affiliates must (i) agree to the sale of Covered Shares in such registration on the basis provided in any underwriting arrangements approved by the Company, and (ii) complete and execute all questionnaires, powers of attorney, lock-up agreements, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements; provided that neither PFS nor any Frost Group Shareholder shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding title to and consent to sell the Covered Shares) or to undertake any indemnification obligations to the Company or the underwriters with respect thereto. Additionally, if PFS or any of the Frost Group Shareholders disapproves of the terms of any such underwriting arrangements, it may elect to withdraw therefrom by written notice to the Company and the underwriters at least ten (10) business days prior to the date the registration statement with respect to the Covered Shares becomes effective.

5. Indemnification; Contribution.

(a) The Company agrees to indemnify, defend and hold harmless each Frost Group Shareholder and PPS (each such person being referred to as a “Holder” for purposes of this Section 5) and each person who controls any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (each, a “Holder Indemnified Party”), from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which such Holder Indemnified Party may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in any registration statement or in any amendment or supplement thereto or necessary to make the statements therein not misleading, or arises out of or is based upon any omission or alleged omission to state a material fact necessary in order to make the statements made in any prospectus or in any amendment or supplement thereto or in any preliminary prospectus, in the light of the circumstances under which they were made, not misleading, except insofar as any such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or omission or alleged untrue statement or omission of a material fact contained in, or omitted from, and in conformity with information furnished in writing by or on behalf of any Holder to the Company expressly for use therein, provided, however, that the Company shall not be required to provide any indemnify pursuant to this Section 5(a) in any such case insofar as any such loss, damage, expense, liability, claim or action arises out of or is based upon any untrue statement or omission or alleged untrue statement or omission of a material fact contained in, or omitted from, and in conformity with written information pertaining to a Holder furnished by or on behalf of such Holder to the Company expressly for use in, any registration statement or any prospectus.

(b) Each Holder, severally and not jointly, agrees to indemnify, defend and hold harmless the Company, its directors, officers and any person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a “Company Indemnified Party”) from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which such Company Indemnified Party may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in information furnished in writing by or on behalf of such Holder to the Company expressly for use in any registration statement or prospectus

or in any amendment or supplement thereto or in any preliminary prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in any registration statement or in any amendment or supplement thereto or necessary to make the statements therein not misleading, or arises out of or is based upon any omission or alleged omission to state a material fact necessary in order to make the statements in any prospectus or in any amendment or supplement thereto or in any preliminary prospectus, in the light of the circumstances under which they were made, not misleading, in connection with such information. In no event shall the liability of any selling Holder of Covered Shares hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Covered Shares pursuant to the registration statement giving rise to such indemnification obligation.

(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against any person in respect of which indemnity may be sought pursuant to either subsection (a) or (b) of this Section 5, such person (the “Indemnified Party”) shall promptly notify the person against whom such indemnity may be sought (the “Indemnifying Party”) in writing of the institution of such Proceeding and the Indemnifying Party shall assume the defense of such Proceeding. Such Indemnified Party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless the employment of such counsel shall have been authorized in writing by such Indemnifying Party in connection with the defense of such Proceeding or such Indemnifying Party shall not have employed counsel to have charge of the defense of such Proceeding within 30 days of the receipt of notice thereof or such Indemnified Party shall have reasonably concluded upon the written advice of counsel that there may be one or more defenses available to it that are different from, additional to or in conflict with those available to such Indemnifying Party (in which case such Indemnifying Party shall not have the right to direct that portion of the defense of such Proceeding on behalf of the Indemnified Party, but such Indemnifying Party may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of such Indemnifying Party), in any of which events such reasonable fees and expenses shall be borne by such Indemnifying Party and paid as incurred (it being understood, however, that such Indemnifying Party shall not be liable for the expenses of more than one separate counsel in any one Proceeding or series of related Proceedings together with reasonably necessary local counsel representing the Indemnified Parties who are parties to such action). An Indemnifying Party shall not be liable for any settlement of such Proceeding effected without the written consent of such Indemnifying Party, but if settled with the written consent of such Indemnifying Party, such Indemnifying Party agrees to indemnify and hold harmless an Indemnified Party from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an Indemnified Party shall have requested an Indemnifying Party to reimburse such Indemnified Party for fees and expenses of counsel as contemplated by the second sentence of this paragraph, then such Indemnifying Party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by such Indemnifying Party of the aforesaid request, (ii) such Indemnifying Party shall not have reimbursed such Indemnified Party in accordance with such request prior to the date of such settlement and (iii) such Indemnified Party shall have given such Indemnifying Party at least 30 days’ prior notice of its intention to settle. No Indemnifying Party shall, without the prior written consent of any Indemnified Party, effect any settlement of any pending or threatened Proceeding in respect of which such Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such Indemnified Party.

(d) If the indemnification provided for in this Section 5 is unavailable to an Indemnified Party under subsections (a) and (b) of this Section 5 in respect of any losses, damages, expenses, liabilities or claims referred to therein, then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, damages, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Holders on the other hand from the offering of the Covered Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in

clause (i) above but also the relative fault of the Company on the one hand and of the Holders on the other in connection with the statements or omissions which resulted in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Holders on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company or by the Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, damages, expenses, liabilities and claims referred to above shall be deemed to include any reasonable legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any Proceeding.

(e) The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in subsection 0 above. Notwithstanding the provisions of this Section 5, no Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Covered Shares sold by it were offered to the public exceeds the amount of any damages which it has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ respective obligations to contribute pursuant to this Section 5 are several in proportion to the respective amount of Covered Shares they have sold pursuant to a registration statement, and not joint. The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at law or in equity.

(f) The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder or any person controlling any Holder, or the Company, or the Company’s officers or directors or any person controlling the Company and (iii) the sale of any Covered Shares by any Holder.

6. General Provisions; Termination

(a) No Inconsistent Agreements. Without the written consent of the parties hereto, the Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates or limits the rights granted to the holders of Covered Shares in this Agreement, including without limitation with respect to priority on cutback in an underwritten public offering as specified in Section 3.

(b) Adjustments Affecting Covered Securities. The Company shall not take any action, or permit any change to occur, with respect to its securities which would materially adversely affect its ability to include the Covered Securities in a registration undertaken pursuant to this Agreement.

(c) Remedies. Any person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement.

(d) Amendment and Waivers. Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of all of the parties hereto.

(e) Successors and Assigns. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the

parties hereto whether so expressed or not. In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of purchasers or holders of Covered Shares are also for the benefit of, and enforceable by, any subsequent holder of Covered Shares.

(f) Severability. If any provision of this Agreement is held to be prohibited by or invalid, illegal or unenforceable in any respect under applicable law by the SEC or by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition, invalidity, illegality or unenforceability without invalidating the remainder of this Agreement.

(g) Counterparts. This Agreement may be executed simultaneously in one or more counterparts (any one of which may be by facsimile), any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

(h) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

(i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

(j) Jurisdiction; Service; Jury Waiver. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement shall be brought against any of the parties only in the courts of the State of New York, City of New York, Borough of Manhattan, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. THE PARTIES HERETO WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT.

(k) Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient or one day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications shall be sent to PFS and each of the Frost Group Shareholders at the addresses set forth in Schedule A attached hereto, and to the Company at the address and to the attention of such person indicated below:

Winston Pharmaceuticals, Inc.
100 Fairway Drive
Suite 134
Vernon Hills, Illinois 60061
Attention: Joel E. Bernstein, M.D.
Facsimile: (847) 362-0794

With a copy to:

Seyfarth Shaw LLP
131 South Dearborn Street
Suite 2400
Chicago, IL 60603
Attention: Michel J. Feldman, Esq.
Facsimile: (312) 460-7613

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

(l) Entire Agreement. This Agreement and the instruments referred to herein embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

(m) Termination. The terms and conditions of this Agreement shall terminate on the earlier to occur of (i) the 6th year anniversary of the effective date of this Agreement, or (ii) the date that all Covered Shares have been released from escrow in accordance with the Escrow Agreement.

[Signature pages follow.]

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.


	WINSTON PHARMACEUTICALS, INC.
	By:
		David Starr
		Chief Financial Officer

	PHARMACEUTICAL FINANCIAL SYNDICATE, LLC
	By:
		Joel E. Bernstein, M.D.
		Manager

	FROST GAMMA INVESTMENTS TRUST
	By:
		Phillip Frost, M.D.
		Trustee



	Subbarao Uppaluri, Ph.D.




	Steven D. Rubin




	Jane Hsiao, Ph.D.

[Signature page to the Registration Rights Agreement]

Schedule A

Frost Group Shareholders Notice Addresses

4400 Biscayne Boulevard, Miami, Florida 33137 for all of the Frost Group Shareholders

EX-99.8 9 c01754exv99w8.htm EXHIBIT 8 Exhibit 8

Exhibit 8

EXECUTION COPY

STANDSTILL AGREEMENT

THIS STANDSTILL AGREEMENT (this “Agreement”) is made effective as of May 19, 2010 by and among each of Frost Gamma Investments Trust, Subbarao Uppaluri, Steven D. Rubin and Jane Hsiao (collectively, the “Frost Group Shareholders” and individually, a “Frost Group Shareholder”) and Joel E. Bernstein, M.D. and Carole Bernstein, and solely with respect to paragraph (c) of Section 2 and paragraph (a) of Section 3 of this Agreement, Winston Pharmaceuticals, Inc., a Delaware corporation (the “Company”).

RECITALS

A. Simultaneous with the execution and delivery of this Agreement, Pharmaceutical Financial Syndicate, LLC, (“PFS”) a Delaware limited liability company whose manager is Dr. Bernstein, and the Frost Group Shareholders have entered into a Stock Purchase Agreement (the “SPA”) and Escrow Agreement (the “Escrow Agreement”) pursuant to which PFS shall purchase from the Frost Group Shareholders an aggregate of 18,399,271 shares of the Company’s common stock (the “Covered Shares”) and warrants to purchase 8,958,975 shares of the Company’s common stock (the “Covered Warrants,” and together with the Acquired Shares, the “Covered Securities”).

C. In order to induce their respective counterparties to enter into the SPA and Escrow Agreement and the transactions contemplated thereby, Dr. Bernstein and each of the Frost Group Shareholders desire to enter into this Agreement restricting their respectively abilities to engage in certain transactions in the Company’s securities.

Now, therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the undersigned parties, the undersigned parties hereto agree as follows:

1. Representations and Warranties. The Frost Group Shareholders hereby represent and warrant to Dr. Bernstein, and Dr. Bernstein and Mrs. Bernstein hereby represent and warrant to the Frost Group Shareholders as follows:

(a) each party has previously disclosed to all other parties to this Agreement, through filings made under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and/or other means: (i) the name of any affiliate, associate, immediate family member (as such term is defined in Regulation S-K under the Exchange Act) or group member of each such party who beneficially owns any securities of the Company within the meaning of Rule 13d-3 or Rule 16a-1(a)(2) under the Exchange Act), (ii) the number of securities of the Company so beneficially owned by such persons, and (iii) for any such shares so beneficially owned that are held of record in a different name (such as “Cede & Co.” or another “street name”), the name of such record holder.

(b) all schedules, statements or other reports previously filed by any one or more of the parties to this Agreement any affiliate, associate, immediate family member (as such term is defined in Regulation S-K under the Exchange Act) or group member of each such party under Section 13 or 16 of the Exchange Act contain all of the disclosures and information required under the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and such disclosures and information was, as of the date of the filing thereof with the SEC and the delivery thereof to the Company, true, correct and complete in all material respects.

(c) the representations, warranties, covenants and agreements of the parties hereunder are a material inducement to their respective counterparties entering into of this Agreement, the SPA, the Escrow Agreement, and the transactions contemplated hereby and thereby.

2. Standstill

(a) The Frost Group Shareholders hereby covenant and agree that during the five year period commencing on the date hereof and expiring on the 5th year anniversary of the effective date of this Agreement, each Frost Group Shareholder shall not, and shall not permit or cause any affiliate, associate, immediate family member (as such term is defined in Regulation S-K under the Exchange Act) or group member to, directly or indirectly:

(i) engage in any transactions in any class of securities of the Company, including any derivative;

(ii) solicit proxies with respect to any securities of the Company;

(iii) actively oppose any action approved by a majority of the board of directors of the Company, or become a “participant” in any “election contest” relating to the election of directors of the Company (as such terms are used in rule 14a-11 of Regulation 14A promulgated under the Exchange Act (or any comparable or successor rule));

(iv) propose, make or initiate, or solicit stockholders of the Company for the approval of, one or more stockholder proposals;

(v) propose, or make, initiate or solicit any proposals from, or provide any information or participate in any discussions or negotiations with, or otherwise cooperate in any way with or assist, any person concerning any merger, consolidation, other business combination, tender or exchange offer, recapitalization, liquidation or dissolution or any purchase or other acquisition or sale or other disposition of assets (other than in the ordinary course of business) or shares of capital stock of the Company or any of its subsidiaries or divisions or any similar transaction involving the Company or any subsidiary or division of the Company;

(vi) take any other action for the purpose of or with the effect of changing or influencing the control of the Company, or in connection with or as a participant in any transaction having that purpose or effect;

(vii) form, join or in any way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act or Rule 13d-5(b)(i) promulgated under the Exchange Act) with respect to any securities of the Company; or

(viii) induce, attempt to induce, encourage or solicit, or cooperate with, any other Person to do any of the foregoing.

(b) Dr. Bernstein and Mrs. Bernstein hereby covenant and agree that for so long as any of the Notes remain outstanding, they shall not sell, offer to sell, transfer, assign, pledge or hypothecate any securities of the Company directly or indirectly owned by them or deemed to be beneficially owned by them within the meaning of Rule 13d-3 of the Exchange Act, including any securities of the Company obtained after the date of this Agreement; provided, however, that in the event of Dr. Bernstein’s death, the restrictions arising under this paragraph (b) shall terminate immediately and Mrs. Bernstein shall be entitled to exercise full dispositive power with respect to any such securities.

(c) The Company hereby covenants and agrees that it shall not elect, appoint or nominate any of the adult children of Dr. Bernstein to serve on the board of directors of the Company so long as any of the Notes remain outstanding unless and until such person executes and delivers to the Frost Group Shareholders or their counsel a counterpart signature page to this Agreement pursuant to which such person agrees to be bound by the terms and conditions of paragraph (b) of this Section 2 as if such person were a party hereto.

(d) No provisions of Section 2(a) shall apply at any time that there has occurred and remains uncured a breach by PFS of any of its material duties or obligations under the SPA, the Escrow Agreement or the Notes, or a breach by Dr. or Mrs. Bernstein of their covenants and agreements under this Agreement. No provisions of Section 2(a) are intended to prevent the Frost Group Shareholders from exercising rights under the SPA, the Escrow Agreement or the Notes, and to the extent of any conflict with Section 2(a), the provisions of the SPA, the Escrow Agreement or the Notes shall control.

3. General Provisions; Termination

(a) No Inconsistent Agreements. Without the written consent of the parties hereto, neither the Company nor Dr. Bernstein or Mrs. Bernstein shall hereafter enter into any agreement with respect to its securities which is inconsistent with or violates or limits the rights granted to the parties to this Agreement under the SPA or Escrow Agreement.

(b) Remedies. Any person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement.

(c) Amendment and Waivers. Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of all of the parties hereto.

(d) Successors and Assigns. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not.

(e) Severability. If any provision of this Agreement is held to be prohibited by or invalid, illegal or unenforceable in any respect under applicable law by the SEC or by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition, invalidity, illegality or unenforceability without invalidating the remainder of this Agreement.

(f) Counterparts. This Agreement may be executed simultaneously in one or more counterparts (any one of which may be by facsimile), any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

(g) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

(h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

(i) Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient or one day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications shall be sent to each of the Frost Group Shareholders at the addresses set forth in Schedule A attached hereto, and to Dr. Bernstein, Carole Bernstein or the Company at the as follows:

Joel E. Bernstein
100 Fairway Drive
Suite 134
Vernon Hills, Illinois 60061
Facsimile: (847) 362-0794

With a copy to:

Seyfarth Shaw LLP
131 South Dearborn Street
Suite 2400

Chicago, IL 60603
Attention: Michel J. Feldman, Esq.
Facsimile: (312) 460-7613

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

(j) Entire Agreement. This Agreement and the instruments referred to herein embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

(i) Jurisdiction; Service; Jury Waiver. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement shall be brought against any of the parties only in the courts of the State of New York, City of New York, Borough of Manhattan, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. THE PARTIES HERETO WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT.

[Signature pages follow.]

IN WITNESS WHEREOF, the parties have executed this Standstill Agreement as of the date first written above.




	Joel E. Bernstein, M.D.



	Carole Bernstein

	FROST GAMMA INVESTMENTS TRUST
	By:
		Phillip Frost, M.D.
		Trustee



	Subbarao Uppaluri, Ph.D.



	Steven D. Rubin



	Jane Hsiao, Ph.D.

	SOLELY WITH RESPECT TO PARAGRAPH (C) OF SECTION 2 AND PARAGRAPH (a) OF SECTION 3: WINSTON PHARMACEUTICALS, INC.
	By:
		David Starr
		Chief Financial Officer

[Signature page to the Standstill Agreement]

Schedule A

4400 Biscayne Boulevard, Miami, Florida 33137 for all Frost Group Shareholders

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