Abraxis BioScience (ABII)

We may be required to indemnify New APP and may not be able to collect on indemnification rights from New APP.

Under the terms of the separation and distribution agreement, we have agreed to indemnify New APP from and after the distribution with respect to all liabilities of Old Abraxis not related to its hospital-based products business and the use by New APP of any trademarks or other source identifiers owned by us. Similarly, New APP has agreed to indemnify us from and after the distribution with respect to all liabilities of Old Abraxis related to its hospital-based products business and the use by us of any trademarks or other source identifiers owned by New APP. Under the terms of the tax allocation agreement, we have agreed to indemnify New APP against all tax liabilities to the extent they relate to the proprietary products business, and New APP has agreed to indemnify us against all liabilities to the extent they relate to the hospital-based products business. In addition, we have agreed to indemnify New APP for any taxes resulting from a failure of the distribution to qualify as a tax-free distribution under Section 355 and Section 368(a)(1)(D) of the Internal Revenue Code, unless such failure results solely from specified acts of New APP after the distribution. Under the terms of the manufacturing agreement, we have agreed to indemnify New APP from any damages resulting from a third-party claim caused by or alleged to be caused by (i) our failure to perform our obligations under the manufacturing agreement; (ii) any product liability claim arising from the negligence, fraud or intentional misconduct of us or any of our affiliates or any product liability claim arising from our manufacturing obligations (or any failure or deficiency in our manufacturing obligations) under the manufacturing agreement; (iii) any claim that the manufacture, use or sale of Abraxane^® or our pipeline products infringes a patent or any other proprietary right of a third party; or (iv) any recall, product liability claim or other third-party claim not arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by New APP, by reason of the $100 million limitation of liability described below. We have also agreed to indemnify New APP for liabilities that it becomes subject to as a result of its activities under the manufacturing agreement and for which it is not responsible under the terms of the manufacturing agreement. New APP has agreed to indemnify us from any damages resulting from a third-party claim caused by or alleged to be caused by (i) New APP’s gross negligence, bad faith, intentional misconduct or intentional failure to perform its obligations under the manufacturing agreement; or (ii) any product liability claim arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by New APP. New APP generally will not have any liability for monetary damages to us

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or third parties in connection with the manufacturing agreement for damages in excess of $100 million in the aggregate. There are no time limits on when an indemnification claim must be brought and no other monetary limits on the amount of indemnification that may be provided. These indemnification obligations could be significant. Our ability to satisfy any of these indemnification obligations will depend upon the future financial strength of our company. We cannot determine whether we will have to indemnify New APP for any substantial obligations. We also cannot assure you that, if New APP becomes obligated to indemnify us for any substantial obligations, New APP will have the ability to satisfy those obligations. Any indemnification payment by us, or any failure by New APP to satisfy its indemnification obligations, could have a material adverse effect on our business.

We may be required to indemnify New APP and may not be able to collect on indemnification rights from New APP.

Under the terms of the separation and distribution agreement, we have agreed to indemnify New APP from and after the distribution with respect to all liabilities of Old Abraxis not related to its hospital-based products business and the use by New APP of any trademarks or other source identifiers owned by us. Similarly, New APP has agreed to indemnify us from and after the distribution with respect to all liabilities of Old Abraxis related to its hospital-based products business and the use by us of any trademarks or other source identifiers owned by New APP. Under the terms of the tax allocation agreement, we have agreed to indemnify New APP against all tax liabilities to the extent they relate to the proprietary products business, and New APP has agreed to indemnify us against all liabilities to the extent they relate to the hospital-based products business. In addition, we have agreed to indemnify New APP for any taxes resulting from a failure of the distribution to qualify as a tax-free distribution under Section 355 and Section 368(a)(1)(D) of the Internal Revenue Code, unless such failure results solely from specified acts of New APP after the distribution. Under the terms of the manufacturing agreement, we have agreed to indemnify New APP from any damages resulting from a third-party claim caused by or alleged to be caused by (i) our failure to perform our obligations under the manufacturing agreement; (ii) any product liability claim arising from the negligence, fraud or intentional misconduct of us or any of our affiliates or any product liability claim arising from our manufacturing obligations (or any failure or deficiency in

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our manufacturing obligations) under the manufacturing agreement; (iii) any claim that the manufacture, use or sale of Abraxane^® or our pipeline products infringes a patent or any other proprietary right of a third party; or (iv) any recall, product liability claim or other third-party claim not arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by New APP, by reason of the $100 million limitation of liability described below. We have also agreed to indemnify New APP for liabilities that it becomes subject to as a result of its activities under the manufacturing agreement and for which it is not responsible under the terms of the manufacturing agreement. New APP has agreed to indemnify us from any damages resulting from a third-party claim caused by or alleged to be caused by (i) New APP’s gross negligence, bad faith, intentional misconduct or intentional failure to perform its obligations under the manufacturing agreement; or (ii) any product liability claim arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by New APP. New APP generally will not have any liability for monetary damages to us or third parties in connection with the manufacturing agreement for damages in excess of $100 million in the aggregate. There are no time limits on when an indemnification claim must be brought and no other monetary limits on the amount of indemnification that may be provided. These indemnification obligations could be significant. Our ability to satisfy any of these indemnification obligations will depend upon the future financial strength of our company. We cannot determine whether we will have to indemnify New APP for any substantial obligations. We also cannot assure you that, if New APP becomes obligated to indemnify us for any substantial obligations, New APP will have the ability to satisfy those obligations. Any indemnification payment by us, or any failure by New APP to satisfy its indemnification obligations, could have a material adverse effect on our business.

We may be required to indemnify New APP and may not be able to collect on
indemnification rights from New APP.

Under the terms of the separation and distribution agreement, we have agreed to indemnify New APP
from and after the distribution with respect to all liabilities of Old Abraxis not related to its hospital-based products business and the use by New APP of any trademarks or other source identifiers owned by us. Similarly, New APP has agreed to
indemnify us from and after the distribution with respect to all liabilities of Old Abraxis related to its hospital-based products business and the use by us of any trademarks or other source identifiers owned by New APP. Under the terms of the tax
allocation agreement, we have agreed to indemnify New APP against all tax liabilities to the extent they relate to the proprietary products business, and New APP has agreed to indemnify us against all liabilities to the extent they relate to the
hospital-based products business. In addition, we have agreed to indemnify New APP for any taxes resulting from a failure of the distribution to qualify as a tax-free distribution under Section 355 and Section 368(a)(1)(D) of the Internal
Revenue Code, unless such failure results solely from specified acts of New APP after the distribution. Under the terms of the manufacturing agreement, we have agreed to indemnify New APP from any damages resulting from a third-party claim caused by
or alleged to be caused by (i) our failure to perform our obligations under the manufacturing agreement; (ii) any product liability claim arising from the negligence, fraud or intentional misconduct of us or any of our affiliates or any
product liability claim arising from our manufacturing obligations (or any failure or deficiency in

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our manufacturing obligations) under the manufacturing agreement; (iii) any claim that the manufacture, use or sale of AbraxaneFACE="Times New Roman" SIZE="1">^® or our pipeline products infringes a patent or any other proprietary right of a third party; or (iv) any recall, product liability claim or other third-party claim not arising from the
gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by New APP, by reason of the $100 million limitation of liability described below. We have also agreed to indemnify New APP for
liabilities that it becomes subject to as a result of its activities under the manufacturing agreement and for which it is not responsible under the terms of the manufacturing agreement. New APP has agreed to indemnify us from any damages resulting
from a third-party claim caused by or alleged to be caused by (i) New APP’s gross negligence, bad faith, intentional misconduct or intentional failure to perform its obligations under the manufacturing agreement; or (ii) any product
liability claim arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by New APP. New APP generally will not have any liability for monetary damages to us or third parties
in connection with the manufacturing agreement for damages in excess of $100 million in the aggregate. There are no time limits on when an indemnification claim must be brought and no other monetary limits on the amount of indemnification that may
be provided. These indemnification obligations could be significant. Our ability to satisfy any of these indemnification obligations will depend upon the future financial strength of our company. We cannot determine whether we will have to indemnify
New APP for any substantial obligations. We also cannot assure you that, if New APP becomes obligated to indemnify us for any substantial obligations, New APP will have the ability to satisfy those obligations. Any indemnification payment by us, or
any failure by New APP to satisfy its indemnification obligations, could have a material adverse effect on our business.

FACE="Times New Roman" SIZE="2">We will be dependent upon New APP to manufacture Abraxane^® for a term of four or five years, and the manufacture of pharmaceutical products is highly
regulated.

In connection with the separation and distribution agreement, we
entered into a manufacturing agreement with New APP for the manufacture of Abraxane^® and our pipeline products whereby New APP agreed to undertake certain of the tasks necessary to
manufacture Abraxane^® and our pipeline products until December 31, 2011, with this agreement automatically extended by one year if either New APP elects to exercise its option to
extend the lease on our Melrose Park manufacturing facility or we elect to exercise our option to extend the lease on New APP’s Grand Island manufacturing facility. Accordingly, we will be dependent upon New APP to manufacture our products. The
amount and timing of resources that New APP devotes to the manufacture of our products is not within our direct control. Further, in the event of capacity constraints at the manufacturing facilities, the manufacturing agreement provides that the
available capacity will be prorated between us and New APP according to the parties’ then current use of manufacturing capacity at the relevant facilities. Any loss in manufacturing capacity pursuant to these proration provisions could be
detrimental to our business and operating results. While the manufacturing agreement allows us to override these proration provisions, we may only do so by paying New APP additional fees under the manufacturing agreement. If we are forced to pay New
APP additional fees to retain our capacity rights under the manufacturing agreement, it could be detrimental to our operating results.

The
manufacture of pharmaceutical products is highly exacting and complex, due in part to strict regulatory requirements and standards which govern both the manufacture of a particular product and the manufacture of these types of products in general.
Problems may arise during their manufacture due to a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures and environmental factors. If problems arise during the production of a batch of product,
that batch of product may have to be discarded. This could, among other things, lead to loss of the cost of raw materials and components used and lost revenue. If such problems are not discovered before the product is released to the market, recall
costs may also be incurred. Under the terms of the manufacturing agreement, we have the final responsibility for release of the products manufactured pursuant to the manufacturing agreement and will bear all expenses in connection with any recall of
products, unless the recall is a result of New APP’s gross negligence, bad faith, intentional misconduct or intentional breach, in which case New APP would bear all costs and expenses related to such product recall, subject to the $100 million
limit on liability under the manufacturing agreement. To the extent New APP

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encounters difficulties or problems with respect to the manufacture of our pharmaceutical products, including AbraxaneSIZE="1">^®, this may be detrimental to our business, operating results and reputation.

We may be required to indemnify New APP and may not be able to collect on indemnification rights from New APP.

Under the terms of the separation and distribution agreement, we will agree to indemnify New APP from and after the distribution with respect to all liabilities of Abraxis BioScience not related to its hospital-based products business and the use by New APP of any trademarks or other source identifiers owned by us. Similarly, New APP will agree to indemnify us from and after the distribution with respect to all liabilities of Abraxis BioScience related to its hospital-based products business and the use by us of any trademarks or other source identifiers owned by New APP. Under the terms of the tax allocation agreement, we will agree to indemnify New APP against all tax liabilities to the extent they relate to the proprietary products business, and New APP will agree to indemnify us against all liabilities to the extent they relate to the hospital-based products business. In addition, we will agree to indemnify New APP for any taxes resulting from a failure of the distribution to qualify as a tax-free distribution under Section 355 and Section 368(a)(1)(D) of the Internal Revenue Code, unless such failure results solely from specified acts of New APP after the distribution. Under the terms of the manufacturing agreement, we will indemnify New APP from any damages resulting from a third-party claim caused by or alleged to be caused by (i) our failure to perform our obligations under the manufacturing agreement; (ii) any product liability claim arising from the negligence, fraud or intentional misconduct of us or any of our affiliates or any product liability claim arising from our manufacturing obligations (or any failure or deficiency in our manufacturing obligations) under the manufacturing agreement; (iii) any claim that the manufacture, use or sale of Abraxane^® or our pipeline products infringes a patent or any other proprietary right of a third party; or (iv) any recall, product liability claim or other third-party claim not arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by, New APP by reason of the $100 million limitation of liability described below. We will also indemnify New APP for liabilities that it becomes subject to as a result of its activities under the manufacturing agreement and for which it is not responsible under the terms of the manufacturing agreement. New APP will indemnify us from any damages resulting from a third-party claim caused by or alleged to be caused by (i) New APP’s gross negligence, bad faith, intentional misconduct or intentional failure to perform its obligations under the manufacturing agreement; or (ii) any product liability claim arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by, New APP. New APP generally will not have any liability for monetary damages to us or third parties in connection with the manufacturing agreement for damages in excess of $100 million in the aggregate. There are no time limits on when an indemnification claim must be brought and no other monetary limits on the amount of indemnification that may be provided. Please see “Relationship Between New APP and Us After the Separation and Distribution—Separation and Distribution Agreement—Mutual Release; Indemnification,” “—Tax Allocation Agreement” and “—Manufacturing Agreement” for additional information regarding these indemnification obligations. These indemnification obligations could be significant. Our ability to satisfy any of these indemnification obligations will depend upon the future financial strength of our company. We cannot determine whether we will have to indemnify New APP for any substantial obligations after the separation. We also cannot assure you that, if New APP becomes obligated to indemnify us for any substantial obligations, New APP will have the ability to satisfy those obligations. Any indemnification payment by us, or any failure by New APP to satisfy its indemnification obligations, could have a material adverse effect on our business.

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