Abraxis BioScience (ABII)

The Distribution

The obligations of the parties to effect the proprietary contribution, the cash contribution and the distribution are conditioned upon the receipt of a private letter ruling from the Internal Revenue Service (which private letter ruling was received by Old Abraxis on October 5, 2007) to the effect that the proprietary contribution, the cash contribution, and the distribution qualify as a reorganization under Section 368(a)(1)(D) of the Internal Revenue Code and, subject to the following sentence, the distribution qualifies for nonrecognition treatment under Sections 355(a) and 361(c) of the Internal Revenue Code. The private letter ruling, however, does not address two requirements under Section 355 of the Internal Revenue Code on which the Internal Revenue Service will not rule (namely, that the distribution (a) is motivated, in whole or substantial part, by one or more corporate business purposes, and (b) is not being used principally as a device for the distribution of earnings and profits of New APP, New Abraxis or both). Thus, the obligations of the parties to effect the proprietary contribution, the cash contribution and the distribution also are conditioned upon the receipt of an opinion of Fried, Frank, Harris, Shriver & Jacobson LLP, counsel to Abraxis BioScience, to the effect that these two requirements should be satisfied.

Based upon the foregoing, the material U.S. federal income tax consequences of the proprietary contribution, the cash contribution and the distribution should be as follows:

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The private letter ruling is based, in part, and the opinion described above will be based, in part, on assumptions and representations as to factual matters that have been or will be received from, among others, Old Abraxis, Dr. Soon-Shiong, his wife, and certain Old Abraxis stockholders, as requested by the Internal Revenue Service or counsel. If any of those assumptions or representations is inaccurate as of the effective time of the distribution, the tax consequences of the distribution could differ materially from those described above. The private letter ruling does not address certain material legal issues that could affect its conclusions (including whether the distribution is motivated, in whole or substantial part, by one or more corporate business purposes, whether the distribution is being used principally as a device for the distribution of the earnings and profits of New APP, New Abraxis or both, and whether the distribution and any acquisition or acquisitions are part of a plan or series of related transactions under Section 355(e) of the Internal Revenue Code), and reserves the right of the Internal Revenue Service to raise such issues upon a subsequent audit. Opinions of counsel neither bind the Internal Revenue Service or any court, nor preclude the Internal Revenue Service from adopting a contrary position.

If the distribution does not qualify as a tax-free distribution under Section 355 of the Internal Revenue Code, New APP would recognize taxable gain equal to the excess of the fair market value of the New Abraxis common stock distributed to the New APP stockholders over New APP’s tax basis in the New Abraxis common stock. In addition, each New APP stockholder who receives New Abraxis common stock in the distribution would generally be treated as receiving a taxable distribution in an amount equal to the fair market value of the New Abraxis common stock received.